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Martin Pibworth: Good morning, everyone, and thank you for joining us today as we set out our transformational fully funded investment plan to deliver high-quality capital and earnings growth. As I give my first presentation as Chief Executive, I am delighted to say that before us lies the most exciting period of growth I have seen in my near 3 decades at SSE. And by leaning into the U.K. networks opportunity, we are underlining our position as a top-tier European energy player. Over the course of the next 30 minutes, we will outline how we have been ramping up delivery of game-changing infrastructure, provide a brief update on our financial performance. and finally, lay out the detail behind a bold new plan that faces into the paradigm shift underway in our sector. Before I hand over to our Chief Financial Officer, Barry O'regan, to run through our results for the half year, I want to briefly set the context for how our integrated strategy optimizes growth and creates long-term sustainable value. SSE's position at the heart of the energy transition in our core U.K. and island markets has created a once-in-a-generation opportunity for the group to significantly increase our investments in homegrown, secure and clean energy infrastructure. We have great options across networks, renewables and flexibility, but within that, the single biggest opportunity is in transmission, and that's our focus this morning. Under this plan, we will be investing GBP 33 billion, of which 80% will be in networks growing the regulatory asset base by a compound annual growth rate of around 25% to 2030 and positioning SSE as one of the fastest-growing electricity network companies in the world. This will drive increased levels of high-quality index-linked earnings with clear visibility to achieve between 225p to 250p earnings per share by 2030 after adjusting for the equity placing we have announced today. We are also able to extend our sustainable and progressive dividend policy over the same period. And it is important to emphasize that this is a fully funded plan with a firm commitment to maintaining a strong balance sheet. Around 90% of this will be self-funded through strong operational cash flows or by steady increases in our levels of net debt and hybrid capital. The remaining 10% will be achieved through a combination of today's equity placing as well as targeted disposals. This is a hugely exciting investment plan, which will deliver significant long-term value creation over the course of this decade and beyond. Our confidence is underpinned by SSE's track record of delivery. The roll call of SSE-built additions to the energy system in recent years is impressive and includes the delivery of complex projects like the Shetland HVDC connection, Viking Wind Farm, Seagreen, the Northeast 400 kV scheme, Slough Multifuel and KB2, and the relentless delivery continues with the headway we have made on construction and planning milestones over the past 6 months. In Networks, construction is now well underway on 4 of the 11 major transmission projects with all major consents submitted and supply chain secured for the remainder. In Renewables, we are making strong progress on our 2.5 gigawatt construction program, including Dogger Bank, where 88 out of 95 turbines are now installed with the projects remaining on track with the guidance we issued over a year ago. In addition, Yellow River is fully commissioned and Berwick Bank is consented and on track for participation in upcoming auction rounds. And Flexibility completes the picture as we progress construction on 2 vital new thermal generation projects in Ireland. As we'll set out today, networks are the growing core of our investment plans, but they continue to be complemented by selective and disciplined growth projects across our other businesses. And of course, it is critical that in making this progress, we put our people first. Everything we will talk about today is underpinned by the hard work and dedication of our employees and contract partners. So keeping them safe and well will always be SSE's primary concern. It is, therefore, pleasing to report continued strength in our safety performance through a period of increased construction activity over the past 6 months. And with investment set to accelerate, it will be critical to maintain our focus on looking after those who work for and on behalf of SSE. I'll now hand over to Barry for an overview of performance in the first half of the year before we turn to our exciting plans for the next 5-year period.
Barry O'regan: Thank you, Martin, and good morning, everyone. I'm sure you'll be keen to see further detail of our new investment plan. However, it is important to briefly cover financial performance in the first half and our reaffirmed outlook. The GBP 655 million adjusted operating profit delivered by the group over the past 6 months was in line with usual seasonal averages and, therefore, keeps us on track to deliver on our full year expectations. The first half saw a step change in transmission investment and earnings. So it's worth pausing to highlight the continued evolution of the latter. Around 2/3 of earnings were generated by regulated networks, an increase relative to the comparative period and in line with the continued upweighting of investment in that area. The increase in high-quality regulated earnings is a trend that is set to continue as we deliver on our investment program. Turning to the bottom line. The group delivered adjusted EPS of 36.1p, in line with our expectations for the period. In our combined networks businesses, adjusted operating profit fell by GBP 84 million over the first 6 months. Profits almost doubled for transmission, driven by the continued increase in investment as we make substantial progress on our large capital projects. Turning to Distribution. Profits were lower as expected given the nonrecurring inflation adjustment in the prior period, with operational performance remaining strong. Overall, we continue to be pleased with the underlying financial and strategic performance achieved by our regulated businesses, which sets them up well for their future growth. In SSE Renewables, strong progress continues to be made on Dogger Bank construction, and we were delighted to announce full completion of Yellow River in October. Whilst increased capacity largely offset unfavorable weather conditions, the 20% decrease in hedge prices that we flagged in May meant that adjusted operating profits have reduced this period. With the usual seasonality, meaning that over 2/3 of operating profit for this business is generated in the second half of the year, we remain confident that earnings will be higher on a year-on-year basis. Turning to flexibility. Adjusted operating profits have fallen since the previous period. This movement was mainly due to the customers business, where a bad debt release in the comparative period is combined with lower volumes in the first half. We expect a greater proportion of profits to be recognized in the second half for this business. Below the line, net finance charges were stable, reflecting a combination of capitalization effects and use of hybrid debt with coupons expected to increase in FY '27. Our tax rate continues to decline with the full expensing capital allowances available on our increasing investment program. As you know, our dividend policy is to deliver 5% to 10% growth across the year. And as set out in May, our planned approach means that we today declare an interim dividend of 21.4p, being 1/3 of our FY '25 dividend. Turning now to the financial outlook for FY '26 and FY '27. We are pleased to reconfirm the detailed segmental guidance we gave in May. With half year results within the normal ranges of seasonality, we see the strong performance noted today continuing through the key winter months, subject to the usual variables around weather, market conditions and plant availability. And consistent with the approach in prior years, we will provide specific EPS guidance later in the financial year. Looking further ahead, the strategic execution that Martin highlighted earlier means we remain confident in delivering against our FY '27 earnings projection. With the first half financial performance now covered, I'll pass you back to Martin for more detail on our transformational investment plans.
Martin Pibworth: Thank you, Barry. It's important to set the scene for why a huge acceleration of investments in infrastructure will be needed in any realistic energy transition scenario. Regardless of shifting political priorities, electrification of the global economy is unstoppable and accelerating. As you can see from the slide, there is a dramatic ramping up of electricity demand from 2030 out to 2050. That is a staggering amount of growth for the system to accommodate, particularly against the backdrop of an aging gas generation fleet, nuclear closures and a reliance on imports from jurisdictions going through similar uncertain transitions. It is also worth emphasizing that the surge in energy demand is unlikely to be smooth or linear. We will need a system that can accommodate uncertainty. These projections have a number of important implications. First, the need for a much more strategic centralized approach to system planning to ensure the right infrastructure is built in the right places at the right time. We are seeing this materialize through the Clean Power Plan, the development of the Strategic Spatial Energy Plan, which will follow and ambitious planning reform. Second, it requires a clear focus on the cost of capital and crowding investments in electricity infrastructure because this is what will deliver in the long-term interest of customers. This was a key factor in the government's welcome decision to rule out zonal pricing in the summer and remains the driving force behind policy and regulatory decisions that are adding momentum to our strategy for value-enhancing growth. Meeting the needs of an electrifying economy requires 4 things: rapid expansion and reinforcement of the transmission network, strategic local distribution upgrades and modernization, a doubling or even tripling of homegrown energy generation supply and a greater focus on storage and flexibility to keep it all in balance. All of these drivers underline the multi-decade organic growth opportunity in front of SSE's carefully selected business mix. The need to alleviate system constraints and rewire Scotland underpins the huge projects, Transmission has well underway. This is investment that the grid needs today, and it will lay the foundation for development of smart grids and a digital economy in the future. In distribution, the next price control will mark a shift in pace as we deliver increasingly strategic plans that accelerate electrification for consumers. Across renewables, which remain the cheapest form of new generation, we have a premium pipeline of options and significant delivery expertise. The North Sea leads the world in offshore wind and the capability we have developed through projects like Dogger Bank and Seagreen gives us an enviable platform for future growth. And finally, our Flexibility capabilities give us resilience against unexpected market developments in an increasingly electrified world. Thermal plants will be rewarded in all transition scenarios, whether providing grid stability or security of supply, and it is complemented by a customers' business that is meeting the demands of a digitalized world focused on AI and data center growth. With supportive policy frameworks and the expertise to deliver, SSE has unique access to the multi-decade organic growth opportunity in these core markets. We briefly touched upon some of these numbers in an earlier slide, but it is worth walking through what this once-in-a-generation opportunity means. The GBP 33 billion investment plan presented today is a trebling of the investment we delivered across the previous 5 years. This investment brings with it industry-leading capital growth with our combined networks RAV set to triple to around GBP 40 billion by the end of the decade, a 25% compound annual growth rate. Disciplined further investment in renewables is likely to add a further 1.5 gigawatts of projects, combining with the 2.5 gigawatts already under construction to take installed capacity to around 9 gigawatts by 2030. This is growth that will create significant value for the group across the life of the plan and the longer term. It will underpin an increase in adjusted EPS to between 225p and 250p by FY '30 after accounting for today's proposed placing. When compared to last year's FY '25 EPS base, which remains unchanged of 160.9p, this is compound annual growth rate of between 7% to 9%. This accelerated investment is underpinned by secure U.K. government regulatory frameworks, and it will unlock growth across the wider economy and support thousands of jobs over the course of the plan. Turning to Transmission. Ofgem's strategic approach to regulation has provided unprecedented and welcome visibility on investment to 2030. While we continue to engage constructively with Ofgem ahead of the final determination on RIIO-T3 next month, the vast majority of the transformational CapEx plan we announced today has its origin in the ASTI and LOTI programs. Between the agreed ASTI and LOTI regimes and business-as-usual programs, we see SSEN Transmission investment increasing to around GBP 22 billion across the period, net of the share from our supportive investment partner. This will deliver a 30% CAGR in the Transmission asset base, making it one of the fastest-growing electricity networks in the world, with earnings increasing at an even faster rate over the plan. And as I will come on to over the next few slides, with the high degree of visibility we have over the CapEx plan and with all major consents submitted, we are making sure that the business and the supply chain are well positioned to deliver. The ASTI and LOTI projects are required in every realistic energy scenario. They are well advanced with mature designs, optimized configurations and a supply chain ready to deliver. Around 90% of our investment in Transmission will be spent on these projects and business-as-usual investments and it reflects the supply chain inflation we have seen over the past few years. These projects will connect homegrown renewable energy and transport the power produced to areas of increasing demand across the country. And they offer clear value for money for consumers by reducing current constraint costs, establishing a foundation for security of supply and reducing our national dependence on volatile energy markets. This high degree of visibility means that the transmission story today is all about safely and efficiently converting the lines on this map into critical national infrastructure, and this is happening at pace. As I said earlier, 4 of the 11 ASTI and LOTI projects are already in construction and all major consent applications have been submitted. All supply chain frameworks that we need have been secured, and we are working with our partners on their delivery capacity and manufacturing quality. This isn't a desktop exercise. This is securing key equipment. This is inspection of manufacturing facilities. This is accelerated innovation and support of the supply chain. It is heavy recruitment ahead of need, vast training programs and deep community engagement, and this is all well underway. With our own resource in the transmission business increasing fivefold in the past 5 years, we are putting everything in place to deliver most of these projects by 2030 ahead of the next phase of projects that will surely follow. This is an exciting moment for SSE, for Scotland and for the U.K., but we are acutely aware that local communities have a major stake in these projects. Having conducted what we believe to be the largest public consultation exercise Scotland has ever seen, we continue to engage with all parties and adapt our plans where we can. We are also investing in housing and community benefit funding that will have a lasting positive impact on the North of Scotland. Ultimately, these vital projects are in our license conditions, and they will be delivered. The need is there, the supply chain is there and consenting is progressing. They will make a huge difference to our energy system as constraints are eased and more homegrown clean energy is connected, providing a tangible economic payback for consumers. Distribution upgrades are more localized, but they are much greater in number and hugely exciting in their own right. In its early consultations on the upcoming price control, Ofgem agrees. The regulator points to significant growth in electricity demand driven by the advance of technologies like electric vehicles, heat pumps and digital industries. Distribution southern license area has enormous strategic potential as it unlocks data center growth in the M4 corridor, while the northern network will connect increasing Scottish renewables capacity with local communities. We, alongside the system operator, are already creating the plans and Ofgem is working on the frameworks to move from a just-in-time network to a well-planned strategic one. At the same time, the government is legislating for local area energy plans to create a bottom-up vision of local needs. We see this business as consistently delivering around 10% RAV CAGR through ED3 alongside high-quality index-linked earnings. And it promises to drive growth for the group well into the 2030s and 2040s as we bring electrification to the doorstep. Renewables will be the foundation of the future global electricity system. SSE has a premium pipeline and world-class teams to deliver clean North Sea energy, which will power European economies for decades to come. In the course of our 2030 plan, we will complete major projects like Dogger Bank, which are backed by long-term, high-quality and index-linked CfD contracts. This reflects and is indeed a direct consequence of our demonstrable track record of driving value through selective capital allocation in premium projects. We also have further options in offshore wind and additionally, a significant pipeline onshore. Our plan outlined today includes around GBP 2 billion of uncommitted CapEx with which to bring forward further investments. But let me be absolutely clear. SSE will continue to maintain the strict capital discipline that has served us so well in the past and prioritize value over volume. Any investment we sanction will have a clear route to value creation with adequate contingency for execution risk, deep consideration of supply chain capabilities and will be delivered through our established models such as via partnership and project finance in offshore wind. But we must not lose sight of the longer-term opportunities here. The U.K. and Ireland will need a strong and diverse renewables base to meet their energy goals, and there is no doubt SSE will be a major part of that. I'll now pass you back to Barry for more on the visibility on earnings and value creation this plan gives us and how we are funding it.
Barry O'regan: Thank you, Martin. As we have outlined today, it is crystal clear that the right strategy at this point in the energy transition is to pivot the group further into the transformational networks opportunity. And Martin has just outlined not only the strategic importance of this investment, but also the high degree of visibility we have, our confidence in delivery and the market-leading capital growth it brings. Over the next few slides, I will cover the clear visibility this strategic plan provides of value creation and earnings growth through the rest of the decade and beyond. Today's investment plan marks a significant evolution of capital allocation from the preceding 5 years. What has historically been a 50-50 investment split between networks and markets now becomes 80-20, upweighted in favor of networks. And this upweighting provides the group with a significant enhancement in earnings visibility. By FY '30, we expect that around 80% of earnings will be index-linked through either the stable regulatory framework provided by networks or from our energy businesses, where CfD, ROC, REFIT arrangements and a rising capacity mechanism provide a clear line of sight over future earnings. This is a material step-up from our position today, offering investors significant earnings stability and protection as we materially grow the business over the course of the decade. At the same time, we will retain 20% of value upside potential, mainly through flexible services, which also provides the group with resilience against unexpected market events. And with 80% of investments targeted towards networks, it should come as no surprise that the majority of expected earnings and asset base growth will come from those businesses. Whilst negotiations over T3 remain constructive and ongoing, we expect the rapid regulatory asset growth in those businesses will deliver RAV of around GBP 40 billion by FY '30, and this will provide a firm underpin to the step-up in long-term earnings. And while more moderate earnings growth is expected in Renewables and Flexibility, these businesses continue to provide the group with value upside potential, as I have mentioned. It is important that as we pivot and grow, we retain a sharp eye on commerciality and efficiency. And that is why we are also committing to driving up-weighted annual recurring cost efficiencies across the group of around GBP 200 million by FY '28. This is an investment plan that has discipline and efficiency at its core, that offers visibility of value creation and, therefore, provides us with the confidence to target adjusted earnings per share of between 225p and 250p by FY '30 after accounting for today's placing. This is equivalent to a 7% to 9% CAGR from the FY '25 baseline that we reported in May. That visibility of growth enables the extension of our sustainable and progressive dividend policy with dividend per share continuing to increase by between 5% to 10% per year to FY '30. This fully funded plan opens the door to an unprecedented investment opportunity that will change the group's shape, size and overall trajectory. It also has a commitment to a strong balance sheet at its heart, reinforcing our commitment to existing investment-grade credit ratings whilst leaving ample headroom for further earnings growth well into the next decade. With GBP 33 billion of investment and GBP 6 billion of other cash requirements such as dividend and interest payments, we expect the group will have a total cash requirement of around GBP 39 billion, which will be met via a combination of primarily self-funded sources. Around GBP 21 billion is expected to come from strong operational cash flows during the period, with a further GBP 14 billion from increasing net debt and hybrid capital issued in a steady way throughout the plan. This expected debt increase is smaller than our threefold increase in regulated assets. And when combined with the growth in earnings, means we remain below 4.5x net debt to EBITDA throughout the course of the plan. Around GBP 2 billion is expected to come from targeted asset rotations across the range of premium assets in our portfolio. These disposals will be timed to meet our investment needs towards the end of the 5-year plan with assets selected to maximize value. And for the remainder, an equity placing of GBP 2 billion will support the significant increase in investments announced today. We don't take issuing equity lightly, as you can see from the extent to which this plan is self-funded, but it's absolutely the right thing to do to unlock this exciting plan, grow the business and deliver attractive returns for our shareholders. I'll now quickly step through the structure of the proposed non-preemptive equity placing to certain eligible institutional investors, which launched this morning at 7:00 a.m. The intention is to raise gross proceeds of GBP 2 billion through an accelerated book build, which represents approximately 10% of the current issued share capital. Concurrently, we have a separate retail offer in the U.K. through RetailBook. The proceeds we expect to raise today will enable us to deliver a plan that is the foundation for long-lasting and sustainable growth of the highest quality. We have an exciting opportunity in front of us, and the plan we have announced today represents a pivotal moment in SSE's evolution. I'll now hand to Martin to close.
Martin Pibworth: Thanks, Barry. We are building on the strength of a business that sits at the very heart of the energy transition. Our balanced portfolio of capabilities, assets and businesses offers investors resilience against inflationary movements and market volatility. With supportive policy frameworks and delivery expertise, SSE has a strategic growth opportunity that will create sustainable value for both shareholders and society for decades to come. We now look forward to working with investors, governments, regulators, communities, suppliers and consumers to help build a homegrown energy system that is independent of volatile international markets, more affordable for customers and better for the environment. To conclude, this is a defining moment for SSE. We have an ambitious plan that leans further into one of the world's fastest-growing electricity networks, underlying our status as a top-tier European energy player. And it offers a clear, well-defined funding route that balances the need for financial strength and earnings growth. Rapid capital growth in our businesses as we grasp this once-in-a-generation opportunity, and it offers long-term value creation with clear visibility over earnings growth and a sustainable and progressive dividend policy. This is a hugely exciting opportunity, and we are getting on with delivering it. Thanks for your time this morning. We will now move to Q&A. And if I can ask that we please keep it to no more than 2 questions each so that we can get to everyone in the time we have. Thank you. I'll now pass over to the operator.
Operator: [Operator Instructions] And your first question today comes from the line of Robert Pulleyn from Morgan Stanley.
Robert Pulleyn: Yes, rob Pulleyn from Morgan Stanley. First of all, congratulations on a very well put together plan, very exciting times and great to see that earnings profile. I'll stick to 2 questions. I'm sure there's lots. So firstly, if we could talk about the asset rotation, GBP 2 billion as part of your funding package. The footnotes seem to imply it will come from renewables. But is that explicitly the case? And is any stake sale in electricity distribution ruled out or included in the guidance? And secondly, given today's double news around data centers across Europe, may I ask, should SSE monetize any of its legacy power plant sites with grid connections for data centers as we are now seeing elsewhere, not just in the U.S. but also U.K. and in Europe?
Barry O'regan: Yes. Rob, thanks for the question. I'll look at the disposal question. So yes, the GBP 2 billion disposals, how I'd look at that is over 25% of that will come from our noncore assets, primarily our Slough waste energy plant, which is the only one we've left. And then we also have a stake in the network -- telecoms fiber company, and we also have a loan note. So in reality, those will all probably take place in the earlier part of the plan. The remaining 75% of disposals will be towards the back end of the plan. It could come from any of our business units. Ultimately, we will decide closer to the time what makes sense strategically and financially for ourselves at the time.
Martin Pibworth: And then thanks, Rob. To your other questions, I mean, data center is obviously a fascinating question. Obviously, we saw the news this morning. I mean the opportunity for data centers and the AI trend, I think, affect us across a number of businesses. I mean, firstly, there's obviously the constructive reality of increasing demand for our generation businesses. There's also the flow-through to distribution, where we mentioned in the presentation we've just given, we would expect an increase in demand in particularly our southern network and for distribution to have obviously a key role to play in delivering that demand. For the customers business, they're also very well engaged with tech players in terms of CPPA possibilities. And of course, that also applies to renewables and the ability to get generation projects across the line there. Specifically on thermal, we have always said that we think our sites offer very good value in terms of redevelopment and playing into transition trends. And just as a reminder, already on our sites, we have previous thermal sites and these are mostly coal sites. We have built batteries. We have built multi-fuel. We provided emergency generation in Ireland for the Irish government, and we are also in the process of building an HVO plant at Tarbert. So that kind of underlines the value we've all seen. And of course, the data center angle possibly adds to that going forward.
Operator: Your next question comes from the line of Mark Freshney from UBS.
Mark Freshney: I have 2. Firstly, on the 6 overhead line planning consents that you're due to get middle of next year. I mean you're very impassioned about, Martin, about the conversations you've been having with the community and why these assets are essential. But you are dependent upon something that's very much outside of your control. What is it that gives you confidence that this time, it will only take 52 weeks rather than 2.5 years? And just secondly, regarding the renewables business, I mean, I think there are some big capital commitments for Dogger, et cetera. it seems to me that you -- I can't remember a time when you've actually reduced spend so much in that business. And is it fair to assume that there's envelope in there for Berwick Bank and maybe a couple of other no-brainers, but you really are pivoting capital away from that business?
Martin Pibworth: Thanks, Mark. Let's deal with the transmission confidence and planning, firstly. I mean, just to reemphasize some points here. Our confidence in the transmission ability to deliver is, firstly, we have had a strategically minded regulator that has given us enough notice to build capabilities. So we referenced a fivefold increase in our resourcing. It is worth pointing out as well that, that resourcing comes -- some of that comes from the North Sea oil and gas, so we get the expertise from that. But also we've managed to pivot some of our renewables expertise, project managers, project directors, engineers, et cetera, into that business. That's a high-quality resource business. We've also, because of the strategic mindset of the regulator, been able to build supply chain frameworks and contract the supply chain, Tier 1 supply chain partners that we know very well. So we think we're well set up from that perspective. Then it comes down to the planning. That bit is less in our control. But maybe a couple of things. Firstly, you referenced the Scottish government and their 52-week commitments for overhead line planning, consenting. We see that as backed on the ground by a trebling of resourcing they've put into the consenting units, which will ultimately define and decide some of those decisions. So we see that as a positive. And then just on the numbers, in the last -- just over the last few months, we've had 2 substations and 2 overhead lines consented. Right now, we have 2 out of 5 of our marine consents and 2 expected soon. We have 5 out of 8 of our overhead line consents, and there's 3 of those in the 12-month process we just talked about. And 13 out of 21 substations consented, including Netherton, which is a major one. So that is the basis for our confidence. We have the ability to logistically get everything ready on the ground with people and supply chain. We think we've got the backing of the Scottish government that understands the transition need and the economic importance of us delivering this infrastructure in a timely way.
Barry O'regan: Yes. And look, just on the renewables CapEx, we've got about GBP 4.5 billion in for renewables CapEx, Mark. over GBP 2 billion of that is currently unallocated, and we will only take that forward clearly if the projects, as Martin said earlier on, meet our hurdle rates and our discipline. That obviously also allows for Berwick Bank. We've done rigorous stress testing of various possible scenarios and Berwick Bank will be part of that. Obviously, that's a multistage project. And obviously, the timing is to be confirmed and equity ownership stakes, et cetera, has to be decided in the future, but that's all part of the scenario analysis we've done.
Operator: We will now go to our next question. And the question comes from the line of Dominic Nash from Barclays.
Dominic Nash: Congratulations, Martin, on your first results as CEO. I think it's a fair to say that you're setting a high hurdle for future presentations. So congratulations. Two questions from me, please. Firstly, could you give us some color on the wiggle room and the uncertainty around that GBP 33 billion sort of investment program to 2030? Because clearly, RIIO-T3 we will get probably what, the first week of December or so. And then secondly, on the renewables where you earmarked the GBP 5 billion or GBP 4.5 billion, clearly, we've got uncertainty over AR7 and maybe AR8. So I'd be interested to know why your confidence is set at GBP 33 billion and realistically, could the CapEx numbers go up from there? Secondly, on the 4.5x net debt EBITDA sort of guidance that you'll be within that limit by 2030, I think that's unchanged from the current net debt-EBITDA number. Could you give us some color again on -- I think the S&P report recently, which was discussing about how you treat JV net debt and whether or not your net debt-EBITDA numbers will need to sort of reflect kind of I think they call it orphan debt in your JVs?
Martin Pibworth: Yes. Maybe just a couple of headline comments while Barry gets the numbers. I mean, we've said and very strongly the CapEx plan and funding options have been stress tested against a range of possible scenarios. And obviously, that is important. I mean just on the specifics of AR7, clearly, we're in an auction process, so we wouldn't say too much about that apart from just to remind investors that we have always and consistently taken a very strong capital disciplined approach to investment. That applies to Dogger Bank, which is why today, we're obviously announcing on Dogger Bank that we're still on track with exactly what we said a year ago. Obviously, that's a year later than we originally planned when we took FID, but we're still in line to beat our hurdle rate on that. And that's because of the risk-managed way we approach that. You'd expect us to apply all of the learnings from Dogger Bank, but all of that same investment philosophy to future renewable investments, including Berwick Bank, including Coire Glas and other onshore wind prospects.
Barry O'regan: Yes. And then, on the GBP 33 billion, so I think the easiest way to think about it is GBP 20 billion of that is for the 11 mega projects in Transmission. So the 3 -- lastly, the ADAS 3 projects in the baseline CapEx. So as Martin said, 4 of them are already in construction, a real clear line of sight over to consenting and, obviously, much firmer grip now on the supply chain costs as well. So real clear certainty over that. 20% of the CapEx is for the remaining networks part, so it's primarily distribution. And obviously, we're seeing a much more strategic approach from the regulator as we go towards T3. So we expect a ramp-up in CapEx as we go to the end of the plan. And then 20% is for the energy businesses. And over half of that is -- about half of that is in construction at the moment. So whether that's the Dogger banks or some onshore and battery projects and about GBP 3 billion is uncommitted. And GBP 2 billion we have allocated for Renewables, GBP 1 million in the Flexible, but obviously, that's quite fungible. And as I said earlier on, that will only be for projects that meet our strict hurdle rates. And that's all part of the scenario analysis that we've done and the stress testing we've done, which allows for those renewables projects you mentioned earlier on. Then in terms of the balance sheet, so yes, so we'll be below 4.5x net debt to EBITDA throughout the plan and at the end of the plan. And in reality, we could go slightly above that as well and still be within existing credit ratings. In terms of S&P, yes, our understanding is that they will be temporarily putting on the project finance debt for assets in construction only. So -- and they're the only agency doing that. So for us, that will mean Dogger Bank B and C will go on to the balance sheet, but they will come off again in the next 2 years, but those projects clearly come off at the back end of the -- once they're into operations. And then obviously, look, Berwick Bank is further out. Clearly, we've allowed for that in our scenario analysis. Again, a lot of those projects are back ended. It depends on the phasing of those projects, what equity stakes we hold in that as well. So we won't need to change our 4.5x net debt to EBITDA for that. That's all allowed for in the scenario analysis we've done. We've shared the plan with S&P. I'm not expecting any surprises there.
Operator: Your next question comes from the line of Harry Wyburd from BNP Paribas.
Harry Wyburd: So 2 for me, please. So the first is, I think when we've discussed equity needs in the past, you've talked about awaiting news RIIO-T3 result and AR7. Have you had any discussions with Ofgem recently around returns, but also around fast money that made you more confident to go ahead with this big plan now, which I guess many of us are thinking you might do after once you have some certainty. So was there a trigger here where you felt like you had better visibility? And then the second, it's on the thread of Rob's questions on data center sites, but actually a different angle on this. And if you think about how data center demand is likely to play out in Europe versus the U.S.? I mean, volumetrically, we've got tons and tons of new wind and solar capacity being added in Europe relatively much more than in the U.S. Volumetrically, I think the picture looks a little bit different. But in terms of peaks, maybe it doesn't. And I wondered what are you thinking in terms of capacity payments and the levels that capacity payments could potentially get to in a squeezed scenario for peak demand from data centers. Do you think the level of capacity payments that are clearing in the recent auctions are the sustainable level? Or do you think there could be upside to those over time if you start to get real squeezes on the peak demand side?
Martin Pibworth: Okay. Thanks, Harry. Firstly, on the question about Ofgem and T3 engagement, and I think it's a kind of why now question. I mean we said back in the summer that we expected a lot of news flow through 2025. And that news flow included zonal pricing and a decision on that, which, I mean, obviously, that's one of the key themes, investor themes earlier in the summer. And obviously, we referenced in our presentation that we were delighted that the government listened to industry and listened to investors like us and ruled out and took zonal off the table. We obviously had the draft determinations important. I'll come back to that in a second. And then we've also had the SSMC for ED3, where we saw a regulatory tone, which continue to be strategic and forward-thinking and progressive. And so from a policy perspective, that felt all quite good. Then on the ground, we've already referenced the progress we're making on consenting and indeed construction for transmission. And when we put all of that together, we thought now was the right time to come out with an exciting plan and show shareholders our thinking. Just in terms of Ofgem discussions, of course, since that draft determination was published, we have been in good constructive discussions with Ofgem over the last 4 or 5 months. You'll recall the 3 themes, the 3 major themes that we were particularly interested in was the capitalization rate, the cost of equity and incentives and also the totex, the gap between our view of totex and theirs in that draft. Look, all I'd say is we've had good constructive conversations with the regulator, we think is -- understands the need to make networks investable and again reflect on the SSMC tone for that as clear evidence of that. Then to your capacity mechanism question, this is -- firstly, I'd agree with you on the demand point. I think I've consistently played down some people's attempts to extrapolate a U.S. demand trend for the U.K. and Europe. I've always been much more careful about that. We are clearly starting to see constructive demand growth. And obviously, in the background, the government and NESO understand the need for capacity mechanism reform if they require new build peak thermal to accommodate that. So those reform processes are going underway -- are underway. Obviously, you do have an example here. In Ireland, you've seen capacity mechanism prices, I think, up to certainly over EUR 175 per kilowatt as Ireland has had to contract for that same peak capacity to look after the nonlinear demand increases they've seen in that jurisdiction. So there is an example there of how the capacity mechanism has had to step in at a higher price. What I've consistently said about the capacity mechanism is for new build, given the rises in CapEx that are ongoing for CCGTs, we think the cap will have to be reviewed. And for existing plants, just because of the age of it, and again, we referenced it in our presentation and the need to get spares in an inventory and make sure engineering capability and reliability are absolutely guaranteed. We expect capacity mechanism payments to have to at least stay where they are to accommodate those kind of needs. Effectively, the line I've used is before, it is difficult to be bearish on the capacity mechanism for its current price of around GBP 60 per kilowatt.
Operator: Your next question comes from the line of Pavan Mahbubani from JPMorgan.
Pavan Mahbubani: Echoing congratulations on the launch of the strategic update. I have 2 questions on returns, please. So firstly, in Electricity Networks following up from an earlier question, should we take the confidence with which you've launched this strategic update as a confident message to the market that you now think you will achieve the 9% to 10% nominal returns in T3 that you indicated were a requirement to increase your investment there? That's my first question. And my second question on a related theme in terms of renewables returns. Can you give us a reminder, you talk about your strict investment criteria, but particularly for offshore wind and for Berwick Bank. How should we be thinking about the key metrics you'll be looking at? Can you remind us what your IRR target would be for that sort of project, whether unlevered or levered?
Martin Pibworth: Yes. So just to reiterate on the transmission question, look, again, to repeat, we are in constructive discussions with Ofgem. We don't know what's going to be in their final draft, which I believe is still expected to be the 4th of December. But we feel like we have been dealing with a strategically minded regulator who understands the need for this once-in-a-generation investment requirement to be investable. But we'll see what the final draft determination say -- sorry, the final determination say, I should say.
Barry O'regan: Yes, Pavan, look, on the offshore wind, our return expectations are the same as what we laid out in the summer, where we increased to an equity return of greater than 12%, and it is greater than 12%. And that also allows for the fact that in the underlying modeling we do, we obviously built in the lessons learned and the experiences we have from Seagreen and Dogger Bank. So we're quite comfortable in terms of the contingencies and the float within the programs there as well. But overall, greater than 12% equity returns.
Operator: Your next question comes from the line of Peter Bisztyga from Bank of America.
Peter Bisztyga: Two questions from me, please. So firstly, I was wondering if you could bridge a little bit the GBP 20 billion net CapEx plan in Transmission with your business plan. So how much of the kind of further future projects in your business plan have been excluded? Is there any kind of cost inflation in the ASTI and LOTI part versus that business plan? And is there any sort of upside risk to that GBP 22 billion CapEx if some of those future projects come through? And could that sort of pressure your balance sheet? So that's kind of question number one. And then on your 225p to 250p guidance, just interested in some of the assumptions behind that. So for example, does it have that GBP 2 billion of unallocated CapEx in renewables spent fully unproductive? Or are you assuming some sort of return already on that in your time frame? And are you using the gross determinations sort of assumptions for your ED3? And I guess, ED3 -- or are you using something different in terms of where you expect the allowances for those businesses to end up?
Barry O'regan: Thank you, Peter. So look, I'll take those ones. In terms of the business plan, obviously, it was done over 12 months ago. And obviously, there's a couple of pieces here. One, they're on different basis. So this is obviously a 5-year plan to March 30. That was a 5-year plan to March 31. That also included OpEx and, obviously, Ontario Teachers part share in there as well. Of the uncertainty CapEx that we laid out in that business plan was GBP 9.4 billion. We have 10% of that in our current GBP 22 billion. So our GBP 22 billion is very clear. GBP 20 billion is for the LOTI, the ASTI and the baseline CapEx. And then you have the GBP 2 billion, which is for your new connections and part of that uncertainty mechanism going forward. In terms of the assumptions behind the 225p to 250p, obviously, look, as Martin said earlier on, we had the draft determination. We had the benefit of 4 months discussions with Ofgem. We believe we've made sensible assumptions in the plan there. In terms of other assumptions we made through the plan, we've made quite sensible assumptions. We've assumed inflation comes down to around 2%. We've assumed baseload power prices for merchant prices at the back end of the decade on average in the high GBP 60 area. Assumed cost of new debt 5% to 5%. So all quite sensible assumptions. And on the question of the unallocated renewables, yes, the bulk of that will be on earning towards the back end of the plan.
Peter Bisztyga: Got it. And sorry, just on the CapEx in transmission, do you see kind of any upside risk from those further future projects coming through that you haven't included in your plan?
Barry O'regan: No, we believe we've got a very robust CapEx plan with the visibility we have over the LOTI, in the ASTI, in the supply chain and our view on the uncertainty mechanism and what we've taken in there with a very robust plan.
Operator: Your next question comes from the line of Deepa Venkateswaran from Bernstein. Deepa, is your line muted? Due to no response, I will go to the next question. And your question comes from the line of Ajay Patel from Goldman Sachs.
Ajay Patel: Congratulations on the presentation. I have 2 questions, please. First is leverage. I'm trying to think about this picture by the time we get to 2030 and thinking, well, okay, more of the business, there will be less exposure to merchant. There will be a higher-quality business with more regulated proportion to it. And I'm just wondering, this 4.5x net debt to EBITDA that you're keeping below the plan, is there scope that, that threshold increases, giving you the opportunity to invest more at the end of the plan? And if that's the case, how does disposals fit into this? If you saw that improvement in that threshold, would that be then -- would you need these disposals, I guess, would be the question. And then the second part was on the international renewables business. Given the reduced aspiration on the renewables side, does it make sense to have an international renewables business? What's the merits of having a business of this scale? I just wondered if you could revisit that for us, that would be quite helpful.
Barry O'regan: Yes. Ajay, yes, so look, on the leverage, as you said, yes, less than 4.5x net debt to EBITDA to the plan, keep us in line with our current credit ratings. Obviously, the investing 80% of our CapEx in networks is going to mean a big shift in our earnings and our earnings quality would probably go from networks being about 40% of our earnings to over 60% of our earnings by the back end of the plan. But clearly, that's their conversations for a different day with the agencies as that CapEx starts to get delivered and that earnings quality comes through. If that does free up more capacity, clearly, yes, we will look at the disposals and what we would do with that capacity at the time. And the way the beauty of doing the equity today allows us to push those disposals towards the end of the plan and give us more flexibility and optionality around that.
Martin Pibworth: And just on international renewables, I think, Ajay, we've consistently said that the vast majority of our time, effort, resources and focus is on our U.K. plan and our Irish plan. And given obviously what we've laid out today, that will continue to be very much the truth of it. We do still have development options, particularly in the Southern Europe geography where, obviously, we bought the SGRE pipeline several years ago, and we've got onshore wind that we can still develop and bring through. So that remains kind of part of the plan. But absolutely, the majority -- the vast majority of the focus of Barry and I and the group is on delivering this once-in-a-generation organic opportunity in our home markets.
Ajay Patel: And sorry, can I have one follow-up just on that. When you weigh up the disposals, I know that 75% towards the end of the plan, and you haven't been specific if it's renewables or networks. But 3 years ago, you could sell network assets at real good valuations, you still can now. But -- and the aim was to reinvest it in renewables where you're making sizable premiums above cost of capital. And the emphasis has changed in this strategy, and I applaud it. But I'm just thinking if I'm looking at that GBP 2 billion bucket of disposals, what's the merit of selling down on renewable assets versus selling down on networks at this juncture?
Barry O'regan: Yes. So look, I suppose the key thing is no decision has been made. It could come from many of our businesses. Ultimately, we believe the distribution is a really attractive business, and we believe there's really good growth to come there in the next few years, and we certainly like to capture that. And all we're saying is that we have time to make that decision on what's the right thing for us to do strategically and financially, but we don't need to make that decision now. That's further down the road.
Operator: As we are approaching the hour, we will now take our final question for today. And your final question comes from the line of James Brand from Deutsche Bank.
James Brand: Congratulations from me as well. Obviously, from the share price correction as well, investors are taking it extremely positively. So congrats. I'll stick with the 2 questions. The first one is on Berwick Bank. Can I just clarify that it's not included in the plan? Certainly doesn't kind of look like it is. I guess, in theory, it could be kind of an initial tranche. And if it does go ahead, does that have any implication -- so if you want a CfD, for instance, in AR7, would that have any implications for funding in the current plan? Or is it the case given that obviously, it would take quite a while to get to the point of commissioning and also your model where you raise equity typically towards quite close to commissioning? Would it actually be falling outside the plan and if you want a CfD? That's the first question. And then the second question is on the GBP 200 million of annual efficiencies targeted by full year 2028. That's a bit better than the GBP 100 million you had in the old plan. And I guess from a starting point where you've already delivered some of those efficiencies. I was wondering whether you could give some details on where those efficiencies are coming from?
Barry O'regan: Yes, happy. I'll take Berwick Bank. So look, yes, so we've done quite a lot of scenario analysis and stress testing of the plan. And yes, we've made allowance for Berwick Bank in that part of that stress testing. I said earlier on, we have GBP 3 billion of uncommitted CapEx. Berwick is a multistage project, which obviously, we still don't know what stages the projects may win contracts at, what the timing for those are, ultimately, what equity stakes we hold on to. And clearly, any funding will be towards the back end of the plan. So that's all allowed for in that, and that's part of the scenario analysis we've done.
Martin Pibworth: And just on the efficiency program, James, look, we said very clearly that we thought well, we don't take issuing equity lightly, and we thought that we had to make sure we've done as much in the business to make sure that it was efficiently run, and we're concentrated and focused on the key prospects and opportunities that looked ahead. We've spent a year going through a review. We slightly rescoped some areas as a consequence. I mentioned earlier, we've actually been fortunate enough to redeploy some high-class renewable resource into transmission to help with that investment program. And of course, investors would expect us to be running an efficient business, and we've been very focused on delivering that, and that's reflected in the number that we shared with you today.
Operator: Thank you I will now hand the call back to management for closing remarks.
Martin Pibworth: Well, look, thank you for your questions. And also thank you, Sharon, as the operator, for helping us run this session. It has been a pleasure to outline today the transformative growth opportunity we see ahead of us. And I hope that you share our sense of excitement for the years to come. Thanks again to Sharon for, our operator, facilitating the Q&A, and thanks to everyone for joining us today. I look forward to meeting with many of you to talk more over the coming days. Thanks again.