Investor Guide

Last updated: August 2022

Where we operate

About us

United Utilities is listed on the London Stock Exchange, and provides water and wastewater services to around seven million people and businesses in the North West of England.

Shares also trade over the counter in the USA in the form of American depositary receipts (ADRs). Each ADR represents two ordinary shares.

Shares in issue: c682 million (100% free float)

Our investment proposition

Our purpose is why we exist

To provide great water and more for the North West

We have a clear vision of what we want to achieve

To be the best UK water and wastewater company

  • Our purpose and vision motivate us to improve our services and deliver more
  • Defining the way we operate are three strategic themes; the best service to customers, at the lowest sustainable cost, in a responsible manner
  • These themes define the way we operate so we can deliver our purpose and work towards our vision

Why invest in United Utilities?

  • Management team with extensive commercial, operational and regulatory experience
  • Track record of regulatory outperformance: exceeded both our 2010-15 and 2015-20 targets
  • Wholesale revenue and asset based linked to CPIH inflation through to at least 2025
  • Clarity on allowed returns through to 2025
  • Systems Thinking approach is the most sophisticated in the sector and provides a real competitive advantage
  • Sustainable improvement in operational performance and customer service
  • Low cost of debt locked in and robust capital structure with a stable A3 rating

Our performance in 2021/22

Our operational highlights

Beach walk
  • Achieved our largest annual customer ODI reward of £25 million for 2021/22
  • Strong performance across the board, meeting or beating over 80 per cent of performance commitments
  • Investing a total of £765 million beyond the scope of our final determination allowance to help us accelerate environmental and customer outcomes
  • A sector leading company on outcome delivery in Ofwat’s Service Delivery Report for 2020/21, with nine of 11 outcomes1 being at or better than target

1 Excluding per capita consumption, which Ofwat will be revisiting at the next price review once there is a better understanding of the impact of COVID 19 and any enduring effects.

Investor guide our performance.png
  • Offering more support than ever before through our extensive range of affordability and vulnerability schemes, helping over 200,000 households
  • Providing around £280 million of affordability support over AMP7
  • Active graduate and apprentice schemes, including recruiting 30 green apprentices to help us work towards our climate and environmental ambitions
  • Committed to maintaining a diverse and inclusive team of people and we were the leading utility in The Inclusive Top 50 Employers List 2021/22
Investor guide our performance.png
  • Achieved a four star rating in the 2021 Environmental Performance Assessment from the Environment Agency, meaning we were categorised as an industry leading company
  • Improving river health over the next 3 years through our “Better Rivers: Better North West” plan
  • On track to deliver our bold commitments to reduce carbon
Year ended 31 March 2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
Revenue 1,862.7 1,808.0 1,859.3 1,818.5 1,735.8
Reported operating profit 610.0 602.1 630.3 634.9 636.4
Underlying operating profit 610.0 602.1 732.1 684.8 645.1
Reported profit before tax 439.9 551.0 303.2 436.2 432.1
Underlying profit before tax 301.9 460.0 534.8 460.3 370.2
Reported profit after taxation (56.8) 453.4 106.8 363.4 354.6
Underlying profit after tax 367.0 383.0 486.3 407.9 304.9
Reported (basic) earnings per share (pence) (8.3)p 66.5p 15.7p 53.3p 52.0p
Underlying earnings per share (pence) 53.8p 56.2p 71.3p 59.8p 44.7p
Dividend per ordinary share(1) (pence) 43.50p 43.24p 42.60p 41.28p 39.73p

(1) Dividend yield of 3.87%, based on closing share price on 31/03/2022 of 1124.5p

As at 31 March 2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
Non-current assets 13,823.2 13,166.2 13,215.7 12,466.4 11,853.6
Current assets 613.8 1,012.9 828.4 721.4 1,149.9
Total assets 14,437.0 14,179.1 14,044.1 13,187.8 13,003.5
Non-current liabilities (10,791.0) (10,152.6) (9,877.3) (9,025.0) (8,911.1)
Current liabilities (688.6) (995.5) (1,204.7) (1,052.0) (1,141.5)
Total liabilities (11,479.6) (11,148.1) (11,082.0) (10,077.0) (10,052.6)
Total net assets and shareholders' equity 2,957.4 3,031.0 2,962.1 3,110.8 2,950.9
Net debt 7,570.0 7,305.8 7,361.4 7,067.3 6,867.8
RCV gearing(2) (%) 61% 62% 61% 61% 61%

(2) Regulatory capital value (RCV) gearing is calculated as group net debt divided by the RCV (expressed in out-turn prices) of United Utilities Water Limited.

Year ended 31 March 2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
Net cash generated from operating activities 934.4 859.4 810.3 832.3 815.6
Net cash used in investing activities (639.7) (549.3) (593.9) (627.7) (723.2)
Net cash (used in)/generated from financing activities (809.7) (89.7) (27.8) (377.4) 184.7
Net increase/(decrease) in cash and cash equivalents (513.5) 220.4 188.6 (172.8) 277.1

Economic regulation

Economic regulation is the responsibility of an independent body, Ofwat, whose primary duties are to protect the interests of consumers, to ensure that companies properly carry out and can finance their functions and to secure the long-term resilience of water and sewerage systems.

As part of its periodic review, Ofwat sets the prices each company can charge their customers across the period. Average household bills are shown on the chart below.

Total household customer bill

Capital investment

Capital investment of more than £3bn across the 2020-25 period and is anticipated to remain high beyond 2025, as we continue to:

  • Upgrade our water and wastewater networks;
  • Deliver a cleaner environment;
  • Provide high quality water to our customers;
  • Maintain our ageing assets; and
  • Improve our customers’ experience.

Growth in RCV

Attractive growth since privatisation.

Regulatory Capital Value (RCV)

For more information please contact

Robert Lee, Head of Investor Relations, robert.lee@uuplc.co.uk, T +44 (0) 7500 087 704
Anna Oberg, Investor Relations Manager, anna.oberg@uuplc.co.uk, T +44 (0) 7435 939 112

United Utilities Group PLC

Haweswater House
Lingley Mere Business Park
Lingley Green Avenue
Great Sankey
Warrington WA5 3LP
corporate.unitedutilities.com

This document contains certain forward-looking statements with respect to the operations, performance and financial condition of the group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and the company undertakes no obligation to update these forward looking statements. Nothing in this document should be construed as a profit forecast. Certain regulatory performance data contained in this document is subject to regulatory audit.