Preliminary Results for the year ended 31 March 25

SSE plc: Preliminary Results for the year ended 31 March 2025

21 May 2025

At the heart of the clean energy transition

· Investment plan delivering value with adjusted Earnings Per Share of 160.9p, in line with expectations:

§ Continuing strong financial and strategic performance from regulated Networks businesses, despite the impact from named storms and unsettled weather conditions.

§ Renewables capacity additions from Viking and a full year contribution from Seagreen drove an 18% increase in output, despite variable weather conditions.

§ Thermal profitability normalised, in line with expectations; strong performance from Energy Customer Solutions demonstrated its strategic importance to the Group.

§ Record £2.9bn adjusted capital investment, of which ~90% was delivered across Networks and Renewables.

§ Adjusted net debt and hybrid capital at £10.2bn, with 3.2x net debt / EBITDA.

§ Recommend a final dividend of 43.0 pence taking full-year dividend to 64.2 pence or 7% increase on prior year.

· Evolving investment programme delivering in complex operating environment:

§ Five-year investment expectations reduced by £3bn to around £17.5bn, reflecting financial discipline in a changing macro environment across the energy businesses and consent phasing in networks.

§ ~60% expected to be invested in regulated Networks, with ~30% allocated to Renewables.

§ Construction continues on all three phases of Dogger Bank offshore wind farm. On track with Phase A completion in the second half of 2025, with >50% of turbines installed.

§ All major substation consents submitted for ASTI and LOTI transmission projects, with remaining consents to be submitted in summer 2025. Construction ongoing at Eastern Green Link 2 ASTI project.

§ Completion of £1bn+ combined investment in 443MW Viking onshore wind farm in Shetland and associated subsea HVDC transmission cable, connecting the islands to the GB grid for the first time.

§ Clearly defined pathway to delivering 2026/27 adjusted Earnings Per Share of 175 - 200p.

1 Alternative Performance Measures have been simplified to no longer adjust for interest on net pension assets, resulting in adjusted EPS increasing by 1.9 pence in 2024/25 and 2.4 pence in 2023/24.

2 Reported net debt excludes equity accounted hybrid capital, see Alternative Performance Measures Section.

Alistair Phillips-Davies, Chief Executive, said:

"SSE continues to prove the benefits of a portfolio that is built to withstand risk and uncertainty and a strategy that is focused on creating sustainable value. We have met our financial goals for the year and evolved our investment plans to reflect the changing world around us - leaning into the opportunities presented in networks and redoubling our capital discipline across our energy businesses.

"We are particularly well placed to contribute to future energy systems in our home markets built on renewables, networks and flexibility. This opportunity, alongside our balance sheet strength and the increased proportion of index-linked revenue we anticipate, gives us every confidence in our FY27 target of 175-200p earnings per share and sustainable growth to 2030 and beyond."

Highlights: Focused on delivering value creation

Strong financial performance, underpinned by regulated networks and renewables growth

· Regulated Networks and Renewables contributed around 90% of adjusted operating profits, reflecting:

§ Strong operational performance from SSEN Transmission, with lower profitability due to one-off true-up benefits in the prior year.

§ One-off cost recoveries through the regulatory price control for SSEN Distribution, where operational performance was also strong in exceptional storm conditions and variable weather.

§ Around 18% increase in output for SSE Renewables, reflecting increased operational capacity combined with a hedged price environment around 30% higher than the prior year.

§ In line with guidance, SSE Thermal and Gas Storage delivered £211.4m of operating profit, reflecting a return towards lower spark spreads and lower market volatility.

§ Energy Customer Solutions continued to see supply margins return to more sustainable levels while delivering tariff reductions to customers in 2024/25 as energy prices stabilised.

· Reported operating profit of £1,962.2m includes exceptional charges totalling £(309.7)m. The majority of this charge relates to a £249.5m non-cash impairment of the Group's investment in the Southern Europe Renewables pipeline. This impairment reflects sector-wide delays to permitting and grid connections, which has meant the build-out has been slower than originally planned.

· Adjusted net finance costs increased over the course of the year reflecting the generally higher level of adjusted net debt and interest-bearing non-recourse project financing in the year.

· Adjusted taxation rate decreased to 13.9%, driven by "full expensing" capital allowance tax relief.

· Strength of balance sheet maintained alongside the strong investment grade credit rating, with 91% of debt fixed at average cost of 3.99% and an average maturity of 5.6 years.

· We are closely monitoring developments in global trade tariff arrangements, however given our diversified supply chains, we do not currently anticipate any material impact on our business or financial results.

Disciplined approach to delivery, with focus on efficiency and competitiveness

· Full energisation of Shetland HVDC link and completion of associated 443MW Viking wind farm both delivered in August 2024, representing an investment of over £1bn.

· Construction commenced on Eastern Green Link 2 (EGL2), a 2GW subsea HVDC being jointly delivered with National Grid, which is the UK's single largest electricity transmission project.

· All major substation consents now submitted for ASTI and LOTI transmission projects, with all remaining consents to be submitted in summer 2025, following the Scottish Government's 52-week decision target.

· Major distribution projects are accelerating, with framework agreements worth ~£1.5bn having been agreed with delivery partners.

· Continuing to progress 3.6GW Dogger Bank offshore wind farm with completion of Dogger Bank A expected in the second half of 2025. Construction on Dogger Bank B progressing well, with all 95 monopiles installed, and blade and turbine manufacturing at advanced stages. A second installation vessel has been contracted and is expected to be on site in the second quarter of 2026. Equity returns across all three phases remain comfortably in line with hurdle rates.

· Completion of the 40MW Tummel Bridge hydropower station refurbishment, whilst reaching a final investment decision to repower 45MW Lochay hydropower station - extending both plants working life by at least 40 years.

· Success in the UK's sixth Contract for Difference auction (AR6) with 130MW Cloiche onshore wind farm and success in Ireland's fourth Renewable Electricity Support Scheme auction (RESS 4) with 60MW Drumnahough onshore wind farm Joint Venture.

· Secured agreements in both the GB and Irish T-4 capacity auctions at strong prices, with the SSE Thermal fleet now fully contracted out to 2029 and triggering an extension to GB fleet end of life assumptions.

· Entered commercial operations on Slough Multifuel - a 55MW Joint Venture - ahead of schedule and backed by a 15 year capacity contract, with steam produced being re-used on the Slough Trading Estate.

· Taken a final investment decision on 300MW Tarbert Next Generation power station in Ireland, with construction commencing during 2025 ahead of planned completion by the end of 2027.

Key Performance Indicators

1 Comparative financial information has been restated, please see note 2.3 to the summary financial statements

1 Includes pumped storage, battery energy storage systems, biomass and constrained-off wind in GB

2 Direct, indirect and induced Gross Value Added and jobs supported, from PwC analysis

3 Figures for 2023/24 have been restated to reflect post year-end adjustments to data

4 The methodology updated to align to published government multipliers and savings rates where available also had a small impact on the results

Investor Timetable

Contact Details

Disclaimer

This financial report contains forward-looking statements about financial and operational matters. These statements are based on the current views, expectations, assumptions, and information of management, and are based on information available to the management as at the date of this financial report. Because they relate to future events and are subject to future circumstances, these forward-looking statements are subject to unknown risks, uncertainties and other factors which may not have been in contemplation as at the date of the financial report. As a result, actual financial results, operational performance, and other future developments could differ materially from those envisaged by the forward-looking statements. Neither SSE plc nor its affiliates assumes any obligations to update any forward-looking statements.

SSE plc gives no express or implied warranty, representation, assurance or undertaking as to the impartiality, accuracy, completeness, reasonableness or correctness of the information, opinions or statements expressed in the financial report or any other information (whether written or oral) supplied as part of it. Neither SSE plc, its affiliates nor its officers, employees or agents will accept any responsibility or liability of any kind for any damage or loss arising from any use of this financial report or its contents. All and any such responsibility and liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation, warranty, assurance or undertaking is given as to the achievement or reasonableness of any future projections, forward-looking statements about financial and operational matters, or management estimates contained in the financial report.

This financial report does not constitute an offer or invitation to underwrite, subscribe for, or otherwise acquire or dispose of any SSE plc shares or other securities, or of any of the businesses or assets described in the financial report, and the information contained herein cannot be relied upon as a guide to future performance.

Definitions

The financial information set out in this Preliminary Results Statement has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and UK adopted International Accounting Standards.

In order to present the financial results and performance of the Group in a consistent and meaningful way, SSE applies a number of adjusted accounting measures or alternative performance measures ("APMs") throughout this financial report. These adjusted measures are used for internal performance management and are believed to present the underlying performance of the Group in the most useful manner for ordinary shareholders and other stakeholders.

The definitions SSE uses for adjusted measures are explained in the "Alternative Performance Measures" section before the Summary Financial Statements. SSE continues to prioritise the monitoring of developing practice in the use of APMs, ensuring the financial information in its results statements is clear, consistent, and relevant to the users of those statements. During the year the Group simplified its adjusted profit metrics by removing the adjustment for interest on net pension assets/liabilities valued under IAS 19 "Employee Benefits". There have been no other changes to the way the Group calculates its APMs in the current year.

For the purpose of calculating the "Net Debt to EBITDA" metric, "Net Debt" represents the group's "Adjusted Net Debt and Hybrid Capital" APM and "EBITDA" represents the full year group "Adjusted EBITDA" APM and including a further adjustment to remove the proportion of "Adjusted EBITDA" from equity-accounted Joint Ventures which relates to project financed debt.

Online information

News releases and announcements are made available on SSE's website at sse.com/investors and you can register for Regulatory News Service alerts at sse.com/investors/regulatory-news/regulatory-news-alerts.

Management presentation webcast and teleconference

SSE will present its preliminary results for the year ended 31 March 2025 on Wednesday 21 May at 10:00am BST. The presentation will be available to replay.

You can join the webcast by visiting www.sse.com and following the links on either the homepage or investor pages; or directly using: https://edge.media-server.com/mmc/p/ih24hbr9

This will also be available as a teleconference, for which participants can register to receive a unique pin code and conference call number using: https://register-conf.media-server.com/register/BI3203bc820295455f9bbb84e862b93858

Strategic overview

At the heart of the clean energy transition

The past year has shown yet again the value that comes from a diverse and resilient business mix and a strategy that aligns with the electrification and decarbonisation of the economy. We have delivered on our financial commitments for the year, delivering adjusted earnings per share of 160.9p and investing a record £2.9bn in large capital projects. Electricity networks and renewables continue to be the twin pillars of disciplined growth for us, with each contributing in excess of £1bn in operating profit for the first time in SSE's history. These businesses, alongside the system-balancing flexibility we can offer, are the principal focus of a proven strategy that is creating meaningful value while addressing the need to provide clean, secure, affordable energy.

With two years to go on our five-year clean power investment plan, the list of delivery milestones grows. In the past year we celebrated completion of Viking onshore wind farm, the pioneering Shetland HVDC link, and the Slough multi-fuel plant. At the same time, work has progressed on major projects like Dogger Bank offshore wind farm and the Eastern Green Link 2 HVDC link. This year of delivery is the result of the work done by SSE's employees and contractor partners, and the Board and leadership team are appreciative of those efforts during what has been a period of internal change as we have responded to our operating environment. Keeping those people out of harm's way is central to our core safety value, so to have reported a combined Total Recordable Injury Rate at its lowest in three years is particularly encouraging.

Our plans have evolved over time, using the optionality we have across a business mix that allows us to react to external factors and pivot to where we see value. As transmission investment opportunities emerged, we steadily upweighted our capital allocation in that area. Now, in response to the impact on growth rates from factors like a changing macro environment and delays to policy and planning, we are reducing spending on our energy businesses and evolving our internal structures to sharpen our focus on controllable costs and efficiencies. Whilst growth rates vary across the Group, our portfolio of businesses across renewables, networks and flexibility continue to show long-term opportunities to create value. SSEN Transmission has immediate visibility of significant RAV growth as it delivers the grid upgrades so critical to decarbonisation. In SSEN Distribution, increasing electrification requires more investment in modernised, digital grids that can optimise supply and demand.

Whilst we upweight investment in regulated networks, we are maintaining our disciplined approach to developing our SSE Renewables pipeline, retaining enviable options for later in the decade whilst prioritising near-term delivery of value creating capacity additions like Dogger Bank. In SSE Thermal, the value to the system of our existing fleet in providing essential flexibility in support of renewables is becoming ever clearer, while our new development pipeline offers essential back-up solutions in carbon capture, hydrogen and conventional plant that is ready for decarbonisation when policy enables it. And in SSE Energy Markets and Energy Customer Solutions, we have vital routes to market that help us to optimise options across the Group.

The publication of this results statement is my last as Chief Executive, and I am proud of what we have achieved over the past 12 years. In that time the Company has evolved from a domestic energy supplier into a world-class developer, builder and operator of critical national infrastructure. That evolution continues with the appointment of Martin Pibworth as my successor. Having joined SSE in 1998, Martin's knowledge of SSE and the energy sector is second to none, and I have full confidence in his ability to take the Company forward.

SSE will continue to offer transparent, high-quality earnings growth that investors can have confidence in. The Company will continue to leverage the array of options at its disposal in delivery of a climate-focused strategy. And it will continue to grow and create sustainable value for shareholders and society for decades to come.Alistair Phillips-DaviesChief ExecutiveSSE plc

Group Financial Review

Financial performance for the year ended 31 March 2025

In order to present the financial results and performance of the Group in a consistent and meaningful way, SSE applies a number of adjusted accounting measures throughout this financial report. These adjusted measures are used for internal management reporting purposes and are believed to present the underlying performance of the Group in the most useful manner for shareholders and other stakeholders. The definitions SSE uses for adjusted measures provide a consistent basis to assess performance and are explained - including a detailed reconciliation to reported measures - in the Alternative Performance Measures section of this document.

1 Comparative financial information has been restated, please see note 2.3 to the Summary Financial Statements

2 Excludes Treasury shares of 4.9m in March 2025 and 2.8m in March 2024

Segmental EBITDA results are included in note 6.3 to the Summary Financial Statements. Further detail on certain key financial metrics is included within the Supplemental Financial Information. For detailed Business Unit financial performance commentary, please refer to the Business Operating Review.

Group Operating Profit

The Group's balanced business mix delivered another strong financial performance in the year, despite continued wider economic turbulence and the expected normalisation of commodity price volatility.

Within this, the adjusted operating profit contribution from Networks and Renewables increased on prior year, contributing a combined 87% of the total adjusted operating profit compared to 63% in the prior year. This increase reflects the strong operating performance and continued investment in both businesses this year, in addition to one-off cost recoveries in networks through the regulatory price control. As expected at the start of the year, the significant decrease in market spark spread price volatility meant that adjusted operating profits from the flexible Thermal business declined 75% on the prior year. Finally, Energy Customer Solutions continued to see supply margins return to more sustainable levels whilst delivering tariff reductions to customers as energy prices stabilised.

Reported operating profit, in addition to the movements above, includes both the net re-measurement on forward contract derivatives under IFRS 9 as well as exceptional items and other financial items which are excluded from adjusted results on the basis they are materially non-recurring, uncontrollable or exceptional. Reported operating profitability decreased by (25)%, mainly as a large net-remeasurement gain on forward contract derivatives in the prior year moved to a small net-remeasurement loss in the current year. These remeasurements are unrelated to underlying operating performance. In addition, the current year result reflected exceptional charges totalling £(309.7)m, mainly comprising a £(249.5)m non-cash impairment of the Group's investment in the Southern Europe Renewables pipeline. This impairment reflects sector-wide delays impacting permitting and grid connections, which has meant the build-out of this platform has been slower than originally planned.

Profit after tax and Earnings Per Share

Adjusted profit after tax was broadly flat year on year, reflecting an increase in net finance costs of 25% which was offset by a decrease in taxation of 20%. Adjusted net finance costs increased over the course of the year reflecting the generally higher level of adjusted net debt in the year, combined with a full year's interest charge on the non-recourse project financing relating to Seagreen offshore wind farm which was commissioned mid-way through the prior year. The decrease in the adjusted taxation charge was driven by "full expensing" capital allowance tax relief available on SSE's record levels of capital investment which reached £2.9bn this financial year.

Reported profit after tax includes the tax effect from the adjustments made to profit metrics as detailed in the previous section, as well as deferred tax arising as a result of differences in accounting and tax bases that give rise to potential future accounting credits or charges. Deferred tax for the Group increased by 39% on prior year, mainly due to the increase in the Group's capital investment programme.

Reflecting the movements above, adjusted Earnings Per Share was flat year on year at 160.9 pence with reported EPS decreasing by 31% to 108.2 pence.

Final dividend

SSE believes that dividends should be sustainable and based on earnings performance, while also enabling the longer-term growth prospects of its assets and operations. To that end, the existing dividend plan to 2026/27 is designed to balance income to shareholders with the appropriate funding for an accelerated growth plan that will ultimately create greater value and total return for shareholders over the long term.

In line with that dividend plan and reflecting financial performance in the year, SSE has announced a final dividend of 43.0 pence for payment on 18 September 2025. This amounts to a 2024/25 full year dividend of 64.2 pence, representing an increase of 7% on the prior year.

Capital expenditure programme

1 Comparative financial information has been restated, please see note 2.3 to the Summary Financial Statements

During the year ended 31 March 2025, SSE's adjusted investment, capital and acquisitions expenditure totalled £2,910.4m, compared to £2,476.7m in the prior year. Investment in the reporting year was driven mainly by SSE's renewables and electricity networks divisions, with limited deployment of capital in thermal and other businesses, and no acquisitions expenditure.

In SSEN Transmission, £953.5m net capex was delivered including £103m on the EGL2 subsea HVDC being jointly delivered with National Grid, as onshore works get underway, and £85m on the Skye reinforcement as substation enabling works commence ahead of the overhead line consent decision. Construction has also commenced on the Orkney High Voltage Alternating Current system where £77m net capex was delivered and £86m was invested in Argyll and Kintyre after final planning approvals for the 275kV upgrade were granted in the year.

In SSEN Distribution, capital investment of £635.8m marks an increase of 26% compared to the prior year as the business advances into year two of its ambitious RIIO-ED2 plan and local transformation programme. In the north, £221m was invested, with delivery of subsea cable projects from Orkney to Shapinsay and Jura to Islay continuing, alongside ongoing programmes to replace aging assets across the region. In the south, expenditure of £415m included ongoing works at Iver in West London and the Bramley-Thatcham reinforcement near Reading, in addition to the Leamington Park Network Upgrade and again alongside ongoing programmes to replace aging assets.

SSE Renewables invested a total of £1,001.8m during the year. In onshore wind this included £56m at Viking wind farm on Shetland which was completed during August 2024 and £47m at Yellow River wind farm in Ireland which is approaching completion. In offshore wind, progress has continued at Dogger Bank A, with £176m of equity and shareholder loans drawn to support construction ahead of completion expected in the second half of 2025. Across the battery and energy storage system (BESS) portfolio, £81m was invested at Ferrybridge (West Yorkshire) where completion is expected in 2025, and £132m and £44m invested at the Monk Fryston and Fiddlers Ferry projects respectively with completion expected at both sites during 2026.

Financial Outlook

Financial outlook for 2025/26

SSE's balanced portfolio of assets across electricity networks, renewables and flexible thermal generation provides a diverse and resilient business mix, with a high level of exposure to a strong, predictable regulatory environment that continues to create sustainable value despite a changing macro environment.

Reflecting this, the Group has set out the following expectations for the forthcoming year:

· SSEN Transmission - it is expected that adjusted operating profit will be more than 1.5 times higher than 2024/25, reflecting increased allowed revenue generated by continued investment growth in this business.

· SSEN Distribution - anticipates that adjusted operating profit will be less than half of 2024/25, as allowed revenue is expected to decrease by around £400m with the reversal of one-off inflationary cost recoveries.

· SSE Renewables - is expected to deliver higher adjusted operating profit than 2024/25, as increased capacity additions such as Dogger Bank A and a full year contribution from Viking more than offset the impact from lower power prices.

· SSE Thermal and Gas Storage - with the step up in contracted Capacity Market payments starting in financial year 2026/27, it is expected that the adjusted operating profit for these businesses will be similar to 2024/25, assuming similar market conditions.

· Energy Customer Solutions - as income from legacy wind farm contracts starts to unwind, it is expected that the adjusted operating profit for this business will be lower than 2024/25.

These expectations are subject to normal weather conditions, current market conditions and plant availability.

Consistent with the approach taken in prior years, SSE will look to give specific adjusted Earnings Per Share guidance later in the financial year.

In line with SSE's existing dividend plan to 2026/27, it is expected that the dividend will increase by between 5 - 10% this financial year. However, in order to simplify the application of this commitment, the Group will move to a more formulaic approach to calculating interim dividends. Reflecting the inherent seasonality of the business, the interim dividend will be calculated as one-third of the prior year full dividend. Therefore, for 2025/26, the interim dividend is expected to be 21.4 pence, being one-third of the 2024/25 full year dividend of 64.2 pence. The Board will continue to recommend the final dividend in May, as part of the Full-year Results Statement, which will reflect an increase of between 5 - 10%.

Capital expenditure and investment continues to increase, as more projects enter construction. Full year capex is expected to continue to increase to over £3.0bn, with the net debt to EBITDA ratio expected to be towards the middle of the 3.5 - 4.0x targeted range across the five-year investment plan and well within a strong investment grade.

Net Zero Acceleration Programme Plus

An evolving investment programme

When SSE set out its first "Net Zero Acceleration Programme" in November 2021, it recognised the significant optionality the Group had within its business mix across the value chain and the need to flex investment as opportunities evolved. This evolution has been evident throughout each iteration of that investment plan, as the Group has steadily upweighted its investment in regulated electricity networks to reflect the growing opportunities there.

However, the Group's investment plans have not been immune to the changing macroeconomic environment and wider delays to the planning processes which have been seen over the last twelve months. Reflecting this investment landscape, the Group today announces a reduction in the overall size of the capital investment plan to around £17.5bn over the five years to 31 March 2027. Around 90% of this investment plan is currently committed, with the remainder subject to delay or potentially even cancellation if the right investment conditions do not emerge.

As noted above, the majority of this reduction is in our energy markets focused businesses with the overall investment plan continuing to reflect an upweighting towards regulated electricity networks:

· SSEN Transmission (~40% or ~£7.0bn) to deliver the RIIO-T2 baseline investment programme in addition to part of the eleven LOTI and ASTI projects which have regulatory approval and are critical to removing existing constraints within the electricity transmission network. This investment is expected to increase gross RAV to between £12 - 13bn by the end of 2026/27.

· SSEN Distribution (~20% or ~£3.5bn) in delivery of its RIIO-ED2 investment programme which continues to progress at pace. This business expects RAV to increase to around £7bn by the end of 2026/27.

· SSE Renewables (~30% or ~£5.5bn) to deliver its existing construction programme. With the business continuing to focus on financial discipline and selective renewables growth only where it is value accretive, it is reducing its capacity targets to ~7GW installed capacity by the end of 2026/27 with ~1GW under construction at that time.

· SSE Thermal and other businesses (~10% or ~£1.5bn) of which around 70% has been invested to date on projects such as Keadby 2 and Slough Multifuel, with the remainder largely comprising maintenance capex and technological investment.

In conjunction with this reduction in investment, and in line with SSE's commitment to capital and operational discipline, the Group commenced an operating and efficiency review, intended to ensure that SSE has the right structures, resourcing and accountabilities to maximise the growth opportunities ahead.

With over 90% of the revised investment plan expected to be invested in electricity networks and renewables, the substantial majority is focused on projects that support SSE's 2030 Goals which are linked to its most highly-material UN Sustainable Development Goals (SDGs) and aligned to the Technical Screening Criteria of the EU Taxonomy.

Balance sheet strength and stability

A core part of SSE's success has been its ability to realise value from disposals, create sustainable earnings growth and raise capital at highly attractive terms. Over the plan to date, more than £4bn of long-term debt has been issued at attractive, fixed coupons despite volatile market conditions.

The Group continues to target a range of between 3.5 - 4.0x net debt / EBITDA over the course of the investment plan to 2026/27, reaching around the top end of that range in the final year.

Significant additional funding optionality remains available to the Group out to FY27, with strong investment grade credit ratings providing further significant net debt capacity, access to around £2bn of additional hybrid borrowing which continues to increase over time, a portfolio of capital recycling options and partnering opportunities which include the option for a minority stake sale in SSEN Distribution and finally the ability to continually flex investment across businesses. While full optionality on sources of funding remains, any future funding decision will be based on the option that creates maximum value for shareholders.

Commitment to delivering earnings growth and dividend plan

After considering the Group's reduced investment plan to 2026/27, in addition to the current and forecasted market conditions, SSE continues to be highly confident about reaching its 175 - 200p adjusted Earnings Per Share guidance range for 2026/27. This confidence reflects an increased level of clarity on revenue growth including:

· Electricity networks, where in-flight investments are expected to grow the regulatory asset base by ~50% over the next two years to around £20bn gross, driving increasing allowed revenues under the regulatory price controls;

· Renewables, where output is expected to grow by ~40% or around 6TWh through delivery of under construction projects such as Dogger Bank phases A and B in addition to full year contributions from other projects such as Viking and Yellow River. The Group's hedging approach has already locked in over two-thirds of the expected merchant exposure in that financial year; and

· Secured capacity market payments across flexible thermal and hydro renewables due to increase by around £150m in 2026/27 from 2025/26 - equivalent to an increase on adjusted earnings per share of around 10 pence - with a further around £150m increase secured for 2027/28.

Reflecting the continued confidence in delivering this sustainable earnings growth, the Group continues to target dividend increases of between 5 to 10% per year across 2025/26 and 2026/27. This dividend plan retains the scrip dividend option for shareholders, with a 25% cap on take-up implemented (if necessary) by means of a share buy-back.

Supplemental Financial Information

Changes to presentation and prior year adjustments

During the year, the Group has restated prior year segmental disclosures as previously announced and simplified adjusted profit metrics as set out below.

Restructuring of SSE Enterprise

SSE Enterprise has long been the incubator of new propositions for SSE, unlocking a number of new commercial opportunities including behind-the-meter solar and battery and energy optimisation services. SSE commenced a restructuring of this business in September 2024 to build an enhanced platform for growth and, following completion of this process, structural changes have now been made to incorporate the constituent parts of the business into other areas of the SSE Group as follows:

· SSE Thermal has taken responsibility for the Slough, Heat and Power business;

· SSE Business Energy has taken responsibility for private electric networks and businesses aligned with the provision of low carbon energy solutions to customers; and;

· SSE Energy Markets has taken responsibility for energy optimisation services.

Comparative segmental financial information has been restated to reflect this restructuring, with the impact detailed in note 2.3 of the Summary Financial Statements.

Alternative Performance Measures - interest on net pension assets/liabilities

In prior years, the Group's Alternative Performance Measures (APMs) excluded the non-cash interest credit or charge relating to defined benefit pension schemes valued under IAS 19 "Employee Benefits". This adjustment is now deemed unnecessary since the pension interest adjustment is less volatile and immaterial to the Group.

Comparative APMs have been restated to remove this adjustment, which increases adjusted profit before tax by £26.2m and adjusted Earnings Per Share by 2.4 pence in the year ended 31 March 2024. For the year ended 31 March 2025, the equivalent interest on net pension assets was £20.7m and increased adjusted EPS by 1.9 pence.

There have been no other changes to the way the Group calculates its APMs in the current year.

Exceptional items and certain re-measurements

Exceptional items

In the year ended 31 March 2025, SSE recognised a net exceptional charge within continuing operations of £(309.4)m before tax. The following table provides a summary of the key components included in the net charge:

Note: The definition of exceptional items can be found in Note 4.2 of the Summary Financial Statements.

The detail behind the exceptional items noted above is contained within Note 7.1 of the Summary Financial Statements.

Group-wide operating model and efficiency review

During the year, in line with SSE's commitment to capital and operational discipline, the Group commenced an operating model and efficiency review, intended to ensure that SSE has the right structures, resourcing and accountabilities to maximise the growth opportunities ahead. This review recognises that the timing, pace and returns from investment in each business will be different, reflecting both the changing macroeconomic environment as well as other external factors such as policy development, regulatory reform and consenting delays.

Whilst the first phase of this review is expected to complete by the end of June 2025, a number of efficiency and cost control measures have already been taken across the Group and most notably within the Corporate, Energy Customer Solutions and SSE Renewables businesses.

These measures have been taken to improve operational efficiency, increase organisational competitiveness and rebalance those businesses for future growth. At present, we anticipate that targeted measures could result in around £100m of annual recurring efficiencies across the Group.

Certain re-measurements

Operating derivatives

SSE enters into forward purchase contracts (for power, gas and other commodities) to meet the future demands of its energy supply businesses and to optimise the value of its generation assets. Some of these contracts are determined to be derivative financial instruments under IFRS 9 and as such are required to be recorded at their fair value as at the date of the financial statements.

SSE shows the change in the fair value of these forward contracts separately as this mark-to-market movement does not reflect the realised operating performance of the businesses. The underlying value of these contracts is recognised as the relevant commodity is delivered, which for the large majority of the position at 31 March 2025 is expected to be within the next 6 - 18 months.

The change in the operating derivative mark-to-market valuation was a £(70.1)m negative movement from the start of the year, reflecting a £(49.0)m negative movement on fully consolidated operating derivatives combined with a £(21.1)m negative share of movement on derivatives in jointly controlled entities, net of tax.

The negative movement of £(49.0)m on fully consolidated operating derivatives includes:

· Settlement during the year of £(141.9)m of previously net "in-the-money" contracts in line with the contracted delivery periods; and

· A net mark-to-market re-measurement of £92.9m on unsettled contracts including affiliate CfDs, entered into in line with the Group's stated approach to hedging. This mark-to-market re-measurement reflects the reduced volatility seen in commodity markets during the year.

As in prior years, the reported result does not include re-measurement of 'own use' hedging agreements which do not meet the definition of a derivative financial instrument under IFRS 9 "Financial Instruments".

Commodity stocks held at fair value

Gas inventory purchased by the Gas Storage business for secondary trading opportunities is held at fair value with reference to the forward month market price. As trading churn towards the financial year end has combined with relative stability in gas prices, the book value is broadly aligned with the fair value.

However, whilst this assessment considers the net change in fair value of physical gas inventory held at the year end, it does not take into account any positive or negative mark-to-market movement on forward contracted sales. Therefore, similar to derivative contracts held at fair value, SSE does not expect that any valuation movement will reflect the final result realised by the business.

Financing derivatives

In addition to the movements above, a positive movement of £12.8m was recognised on financing derivatives in the year, including mark-to-market movements on cross-currency swaps and floating rate swaps that are classed as hedges under IAS 39. These hedges ensure that any fair value movement in net debt is predominantly offset by a movement in the derivative position. The positive movement was primarily driven by a Sterling strength on non-hedge FX and cross currency swap contracts.

These re-measurements are presented separately as they do not represent underlying business performance in the year. The result on financing derivatives will be recognised in adjusted profit before tax when the derivatives are settled.

Hedging position

The long-established approach to hedging followed by SSE looks to generally reduce its broad exposure to commodity price variation in advance of delivery. SSE continues to monitor market developments and conditions and periodically alters its hedging approach in response to changes in its exposure profile.

A summary of the hedging position for each of SSE's market-based businesses is set out below.

SSE Renewables - GB wind and hydro:

Energy output hedges are progressively established through the forward sale of either:

§ Electricity - where market depth and liquidity allow;

§ Gas and carbon equivalents - recognising that spark spread exposures remain; or

§ Gas equivalents only - recognising that carbon and spark spread exposures remain.

This approach reflects that certain energy products have lower available forward market depth and liquidity. Whilst some basis risk or commodity exposure will remain, it facilitates the reduction of SSE Renewables' overall exposure to potentially volatile spot market outcomes.

The table below notes both the proportion of hedges and prices of those hedges for electricity and for gas alone. Due to market liquidity in later periods, there are no gas and carbon equivalent hedges in place.

Note: where gas and carbon trades have been used as a proxy for electricity, a constant 1 MWh:69.444 th and 1MWh:0.3815 te/MWh conversion ratio between commodities has been applied. These same ratios have been used to convert underlying commodity prices into electricity £MWh and therefore no assumptions have been made on either spark or carbon.

The table above excludes any volumes and income under separate contracts such as CfDs, ROCs and Balancing Mechanism activity.

No hedging activity is undertaken for assets in early-stage construction, with hedging activity gradually built up over the construction period as greater certainty over operational dates is received.

SSE's established approach seeks to minimise the volumetric downside risk for renewable energy output by targeting a hedge of less than 100% of its anticipated wind energy output for the coming 12 months. The targeted hedge percentage is reviewed and adjusted as necessary to reflect any changes in market and wind capture insights.

Forward hedges for both wind and hydro are progressively established over a 36-month period, although the extent of hedging activity will depend on the available market depth and liquidity. Target hedge levels are achieved through the forward sale of either electricity or a combination of gas or carbon equivalents as outlined above. When gas-and-carbon hedges are converted into electricity hedges a "spark spread" is realised which can lead to changes in the average hedge price expected. This can increase or decrease the previously published average hedge price or decrease it. Likewise, when gas hedges are subsequently converted into electricity hedges ahead of delivery, a carbon-and-spark spread value is realised which will also lead to changes in the average hedge price expected.

SSE Thermal:

Hedging for the flexible thermal fleet is by its nature dynamic, changing as market values vary with a constant process of re-optimisation to accrue future value for the Thermal fleet. At negative spark spreads this hedge volume is therefore likely to be very low; and at higher prices the hedge will be much larger.

At all times the Thermal portfolio offers the wider group protection from price spikes, renewables shortfall or asset availability issues and therefore has material risk management value to the Group.

Gas Storage:

The assets are commercially operated to optimise value arising from changes in the spread between summer and winter prices, market volatility and plant availability.

SSE Business Energy:

Sales to contract customers are hedged: at point of sale for fixed contract customers; upon instruction for flexi contract customers; and on a rolling hedge basis for tariff customers.

SSE Energy Markets:

This business provides the route to market and manages the execution for all of SSE's commodity trading outlined above (spark spread, power, gas and carbon). This includes monitoring market conditions and liquidity and reporting net Group exposures. The business operates under strict position limits and VAR controls.

There is some scope for position-taking to permit this business to manage around shape and liquidity and providing market insight whilst taking optimisation opportunities. This is contained within a total daily VAR limit of £9m.

Financial management and balance sheet

1 Net debt represents the Group adjusted net debt and hybrid capital. EBITDA represents the full year Group adjusted EBITDA, less £153.3m at March 2025 for the proportion of adjusted EBITDA from equity-accounted Joint Ventures relating to project financed debt.

2 Comparative financial information restated to reflect change to adjusted net finance costs APM, please see note 2.3 to the Summary Financial Statements

1 Comparative financial information has been restated, please see note 2.3 to the summary financial statements

Maintaining a strong balance sheet

A key objective of SSE's long-term approach to balancing capital investment, debt issuance and securing value and proceeds from disposals is by maintaining a strong net debt/EBITDA ratio. SSE calculates this ratio based on a methodology that it believes best reflects its activities and commercial structure, in particular its strategy to secure value from partnering by using Joint Ventures and non-recourse project financing.

SSE considers it has the capacity to reach a ratio of up to around 4.5x, whilst remaining above the equivalent ratios required for a strong investment grade credit rating.

Given the strength of the Group's balance sheet, the net debt/EBITDA ratio at 31 March 2025 was 3.2x. It is expected that this ratio will trend upwards to around 4.0x, as the Group delivers on its ~17.5bn investment plan to 31 March 2027.

Adjusted net debt and hybrid capital

SSE's adjusted net debt and hybrid capital was £10.2bn at 31 March 2025, an increase of £0.8bn from 31 March 2024. With no significant acquisitions or divestments in the year, the debt movement predominantly relates to capital investment expenditure, working capital movements and dividend payments partially offset by operating cash flows and revaluation of foreign currency debt.

Debt summary as at 31 March 2025

The Group and its Scottish Hydro Electric Transmission (SHET) plc entity together issued £1.4bn of new long-term debt in the financial year whilst also continuing to roll short-term Commercial Paper at similar levels to March 2024. Substantial issuances include:

· In June 2024 SHET plc issued a 1.5bn NOK (£111m) 10-year private placement maturing June 2034 with a coupon of 4.731% and an all-in GBP cost of 5.3315% once swapped back to Sterling.

· In August 2024 SHET plc issued a €850m (£715m) 8-year green bond maturing September 2032 with a coupon of 3.375% and an all-in GBP cost of 4.9127% once swapped back to Sterling.

· In March 2025 SSE plc issued a €600m (£503m) 7-year green bond maturing March 2032 with a coupon of 3.50%. This bond has been predominantly left in Euros as a net investment hedge against the Group's Euro denominated assets.

· Over the course of the year, SSE plc rolled maturing short-term Commercial Paper at similar levels to March 2024. On 31 March 2025, €1,075m (£891m) Commercial Paper was in issue in Euros and swapped back to Sterling at an average cost of debt of 5.0%, maturing between April and June 2025.

Medium- to long-term debt maturing in the year comprised $320m (£204m) of US Private Placements which matured in April 2024.

Over the next 12 months there is a further £1.0bn of medium- to long-term debt and £1.2bn of short-term debt maturing. Medium-term debt is the €600m (£531m) Eurobond maturing 16 April 2025 and €600m (£503m) Eurobond maturing 8 September 2025. Short-term debt is £340m of facility advances on the SHET plc £1.5bn committed facility and €1,075m (£891m) of Commercial Paper, however the current intention is to roll this maturing short-term debt forward throughout the 2025/26 financial year.

Hybrid bonds summary as at 31 March 2025

Hybrid bonds are a valuable part of SSE's capital structure, helping to diversify SSE's investor base and supporting credit ratings, as their 50% equity treatment by the rating agencies is positive for credit metrics.

A summary of SSE's hybrid bonds as at 31 March 2025 can be found below:

1 Sterling equivalents shown reflect the fixed exchange rate on date of receipt of proceeds and is not subsequently revalued.

2 All-in rate reflects coupon on bonds plus any cost of swap into sterling which currently only applies to July 2020 Hybrid.

Further details on each hybrid bond can be found in note 14 to the Summary Financial Statements and a table detailing coupon payments is shown below:

1 Coupon payments on €1.5bn of hybrid bonds remain denominated in Euros, and are therefore subject to foreign exchange adjustments.

Managing net finance costs

SSE's adjusted net finance costs - which exclude equity accounted hybrid coupons - were £(281.0)m in the year ended 31 March 2025, compared to £(225.5)m in the previous year. The higher level of finance costs in the year is driven by a higher net debt position, a higher share of Joint Venture interest costs, predominantly due to interest charges from Seagreen offshore wind farm project finance. This is partially offset by higher capitalised interest costs reflecting continued increasing construction activity.

Reported net finance costs were £(111.3)m compared to £(113.1)m in the previous year. Higher interest charges incurred in Joint Ventures combined with a £6.7m greater beneficial movement on financing derivatives as previously referenced, more than offset the increase seen in adjusted net finance costs.

Summarising cash and cash equivalents

At 31 March 2025, SSE's adjusted net debt included cash and cash equivalents of £1.1bn, which is broadly unchanged from March 2024.

Cash collateral is only required for forward commodity contracts traded through commodity exchanges, with the level of cash collateral either provided or received depending on the volume of trading through the exchanges, the periods being traded and the associated price volatility.

At 31 March 2025, £72.9m of net cash collateral was held (2024: £353.2m net held) consisting of £82.5m received offset by £9.6m deposited on the commodity trading exchanges. The decrease in cash collateral posted reflects a decrease in the "in the money" trading positions held by the Group.

Short-term funding

SSE had £3.0bn (gross of the Minority Interest in SHET plc) of committed bank facilities in place at 31 March 2025 to ensure the Group has sufficient liquidity to allow day-to-day operations and investment programmes can continue in the event of disruption to Capital Markets preventing SSE from issuing new debt for a period of time. These facilities are set out in the table below.

The facilities can also be utilised to cover short-term funding requirements. There was £340m drawings on the SHET plc facility and no drawings on the SSE plc facility as at 31 March 2025. 

Both these new facilities have two one-year extension options and are classified as sustainability linked with interest rate and fees paid dependant on various ESG-related metrics being achieved. 

In addition to the above, a $300m private placement shelf facility exists with NY Life which can be drawn in approximately two equal tranches 12 months apart before February 2026. At 31 March 2025 no drawings have been made on this facility. The Group also has access to £21m of overdraft facilities.

Maintaining a prudent treasury policy

SSE's treasury policy is designed to be prudent and flexible. Cash from operations is first used to finance regulatory and maintenance capital expenditure and then dividend payments, with investment and capital expenditure for growth generally financed by a combination of cash from operations, bank borrowings and bond issuance.

As a matter of policy, a minimum of 50% of SSE's debt is subject to fixed rates of interest. In achieving this, SSE borrows as required on different interest bases with financial instruments being used to achieve the desired out-turn interest rate profile. At 31 March 2025, 91% of SSE's borrowings were at fixed rates (31 March 2024: 93%).

Borrowings are mainly in Sterling and Euros to reflect the underlying currency denomination of assets and cash flows within SSE. All other foreign currency borrowings are swapped back into either Sterling or Euros.

Transactional foreign exchange risk arises in respect of procurement contracts, fuel and carbon purchasing, commodity hedging and energy portfolio management operations, and long-term service agreements for plant. SSE's policy is to hedge any material transactional foreign exchange risks using forward currency purchases and/or financial instruments. Translational foreign exchange risk arises in respect of overseas investments; hedging in respect of such exposures is considered on a case-by-case basis.

Operating a Scrip Dividend Scheme

SSE's Scrip Dividend Scheme was renewed for a three-year period at the 2024 AGM. As part of the Group's dividend plan to 2026/27, take-up from the Scrip Dividend Scheme is capped at 25%. This cap is implemented by means of a share repurchase programme, or 'buyback', following payment of the final dividend. The scale of any share repurchase programme would be determined by shareholder subscription to Scrip Dividend Scheme across the full year, taking into account the interim and final dividend elections.

Overall Scrip Dividend take-up for the 2023/24 financial year was 35.7%, therefore the Group initiated a share buy-back programme to limit any dilutive effect back to 25%. This share buy-back programme commenced on 30 September 2024 and completed on 16 October 2024, following the repurchase of 3.8m ordinary shares.

Principal Joint Ventures and Associates

SSE's financial results include contributions from equity interests in joint ventures ("JVs") and associates, all of which are equity accounted. The details of the most significant of these are included in the table below. This table also highlights SSE's share of off-balance sheet debt associated with its equity interests in JVs which totals around £3.7bn as at 31 March 2025.

1 Greater Gabbard, a 504MW offshore wind farm, is proportionally consolidated and reported as a Joint Operation with no loans outstanding.

2 For accounting purposes, £315m of the £961m of SSE shareholder loans advanced to Seagreen Wind Energy Limited have been classified as equity.

Taxation

SSE is one of the UK's biggest taxpayers, and in the Total Tax Contribution survey published in November 2024 was ranked 14th out of the 100 Group of Companies in 2024 in terms of taxes borne (those which represent a cost to the company, and which are reflected in its financial results).

SSE considers being a responsible taxpayer to be a core element of its social contract with the societies in which it operates and seeks to pay the right amount of tax on its profits, in the right place, at the right time. While SSE has an obligation to its shareholders, customers and other stakeholders to efficiently manage its total tax liability, it does not seek to use the tax system in a way it is not meant to operate or use tax havens to reduce its tax liabilities.

SSE was the first FTSE 100 company to be Fair Tax Mark accredited and has now been accredited for ten years.

In November 2024, SSE published its 'Talking Tax 2024: ten years of tax transparency' report. It did this because it believes building trust with stakeholders on issues relating to tax is important to the long-term sustainability of the business. SSE also won PwC's Building Public Trust Award for Tax Reporting in the FTSE 350 for the third consecutive year in November for the quality of its tax reporting.

In the year, SSE paid £592.1m of profit taxes, property taxes, environmental taxes, and employment taxes in the UK, compared with £679.2m in the previous year. The decrease in total taxes paid was primarily due to less corporation tax being paid on UK profits. This was the result of higher capital allowances on capital investment (see below), partly offset by higher amounts of Electricity Generator Levy due to higher electricity generation prices.

In the year to 31 March 2025 SSE also paid €75.0m of taxes in Ireland, compared to €68.0m the previous year, mainly due to increased profits in SSE's Irish businesses. Ireland is the only country outside the UK in which SSE currently has significant trading operations - activities elsewhere are still at an early stage and are not yet paying material amounts of tax.

As with other key financial indicators, SSE's focus is on adjusted profit before tax and, in line with that, SSE believes that the adjusted current tax charge on that profit is the tax measure that best reflects underlying performance. SSE's adjusted current tax rate, based on adjusted profit before tax, was 13.9%, compared with 16.9% in 2023/24 on the same basis. The decrease in rate is primarily due to higher UK capital allowances on the Group's capital investment programme under full expensing, which was introduced by the UK Government from 1 April 2023.

The UK Finance Act (No.2) 2023 introduced legislation in respect of Multinational Top-up Tax in line with OECD BEPS pillar 2 principles, which came into force in the current year. Similar legislation has been introduced in the Republic of Ireland and other EU jurisdictions. The Group has undertaken modelling and has found there to be no impact arising as tax rates in the countries in which the Group operates exceed 15%.

Pensions

In the year to 31 March 2025, the surplus across SSE's two pension schemes increased by £80.2m, from £421.6m to £501.8m, primarily due to actuarial gains of £52.8m and contributions to the schemes.

The valuation of the SSE Southern scheme increased by £65.8m in 2024/25 primarily due to actuarial gains of £45.1m driven by gains in actuarial assumptions and contributions to the scheme of £25.5m, offset by losses on plan assets.

The Scottish Hydro Electric Pension scheme has partially insured against volatility in its deferred and pensioner members through the purchase of 'buy-in' contracts meaning that the Group only retains exposure to volatility in active employees. During the year the scheme's surplus increased by £14.4m driven by actuarial gains relating to actuarial assumptions, offset by losses on plan assets.

Additional information on employee pension schemes can be found in Note 23 to the consolidated financial statements.

Sustainability and Safety Summary

1 Includes pumped storage, battery energy storage systems, biomass and constrained-off wind in GB

2 Direct, indirect and induced Gross Value Added and jobs supported, from PwC analysis

3 Figures for 2023/24 have been restated to reflect post year-end adjustments to data

4 The methodology updated to align to published government multipliers and savings rates where available also had a small impact on the results

From Targets to Action with accountability

Sustainability is central to SSE's operations and long-term strategy, guiding the Group's transition to net zero while creating and sharing value with stakeholders. Its business strategy aligns with the UN's Sustainable Development Goals (SDGs), with four SDGs identified as highly material to the business. By linking these SDGs to its four core business goals for 2030, SSE aims to tackle climate change in a fair and inclusive way, ensuring working people, consumers, and communities benefit from its approach.

Measuring performance

Carbon intensity goal: Despite the long-term trend of a 29% reduction against the 2017/18 baseline in scope 1 GHG intensity of electricity generated, performance from last year to this year demonstrates a 6%increase to 218g CO2e/kWh (2023/24: 205 gCO2e/kWh). This was due to a rise in Thermal generation output and constrained capacity on the grid.

Renewable Output goal: SSE Renewables has seen a significant growth in installed capacity and output over the last few years, however the changing macroeconomic environment and wider delays to planning processes mean the Group has reduced its near-term capital investment expectations. As a result, it is unlikely to meet its ambitious goal of 50TWh Renewable generation output by 2030. Performance this year was 18% higher year-on-year, driven by an increase in operating capacity from Viking wind farm and a full year contribution from Seagreen offshore wind farm despite variable weather conditions.

Enable low-carbon generation goal: As of 31 March 2025, SSE's north of Scotland Transmission network had 10.9GW of installed renewable capacity connected - surpassing the RIIO-T2 target of 10GW by 2026. This milestone was achieved through the connection of several large renewable projects in 2024/25, including the successful energisation of the Shetland HVDC link.

Just transition goal: In 2024/25 SSE contributed £8.68bn to GDP and supported 67,190 jobs across the UK and Ireland, an increase from £6.75bn and 54,830 respectively in 2023/24.

Safety performance: SSE's combined SSE employee and contractor Total Recordable Injury Rate fell to 0.16 from 0.20in the prior year, benefiting from a ~40%improvement in contractor injury rates. SSE's immersive training facility continues to provide positive impact with around 10,000 employees and partners trained since April 2024, contributing to better safety behaviours.

Business Operating Review

SSEN Transmission

SSEN Transmission operates one of the fastest growing regulated electricity networks in Europe. It owns, operates and develops the high voltage electricity transmission system in the north of Scotland and its islands and is owned 75% by SSE plc and 25% by Ontario Teachers' Pension Plan Board. All references to performance indicators relate to 100% of the business unless otherwise stated.

1 Excludes 25% minority interest

2 Estimated and subject to outturn of annual regulatory process

3 Transmission and distribution connected capacity within the SSEN Transmission Network area, includes pumped storage and battery storage

Financial performance

Adjusted operating profit, which is presented net of the business's 25% non-controlling interest, decreased by 23% to £322.5m from £419.3m in the prior year. Despite growing expenditure and associated underlying allowances, a true-up for benefit received in the 2023/24 financial year in relation to "full expensing" accelerated capital allowances means that net allowed revenues were lower than the prior year. In addition, operating costs and depreciation continue to increase as the business grows rapidly to deliver the investment programme agreed with the regulator.

Reported operating profit decreased to £430.0m compared to £559.1m, as a result of all of the movements above but reflecting that non-controlling interests are fully consolidated for all profit metrics under IFRS.

Operational delivery - RIIO-T2

SSEN Transmission continues to deliver a sector-leading operational performance through the safe and reliable transmission of electricity, recognising the increasingly important contribution its network makes to national security of supply.

Despite the significant impact of several named storms, SSEN Transmission achieved 95% of the annual RIIO-T2 reward through the 'Energy Not Supplied Incentive' of £0.7m in 2018/19 prices. 

Capital investment programme

SSEN Transmission's capital investment programme continues to make good progress, increasing the network capacity that will support clean power, net zero and energy security targets.

As of 31 March 2025, the network's total installed capacity was 12.2GW, of which 10.9GW was renewable and other low-carbon sources - including 0.8GW of pumped storage and battery storage. 

Following the successful energisation of the Shetland HVDC link in August 2024, on budget and ahead of schedule, good progress continues to be made connecting Shetland's electricity distribution network to the HVDC link. Energisation will follow the completion of SSEN Distribution's 'Shetland Standby Project' in 2026, connecting Shetland's homes and businesses to the GB electricity network for the first time.

The East Coast 400kV upgrade continues, with good progress being made on replacing the existing overhead line conductors between Kintore and Kincardine and associated substation upgrades. This includes the new Kintore 400kV substation, which upon completion is expected to be the world's first SF6-free 400kV substation.

Delivering a pathway to 2030

The Pathway to 2030 programme includes 11 major projects, six onshore and five offshore. Regulatory approvals for all these investments have been secured through Ofgem's Large Onshore Transmission Investment (LOTI) Uncertainty Mechanism and Accelerated Strategic Transmission Investment (ASTI) framework.

Following the granting by Scottish Ministers of the final major overhead line consent in September 2024, the Argyll and Kintyre 275kV Reinforcement Project is progressing with groundworks well advanced at all five substation sites. Overhead line enabling works continue to make good progress, with overhead line construction set to commence in summer 2025. The project is due for energisation in 2029.

In September, construction began on the Orkney transmission link, with good progress made with groundworks and preparatory works for the onshore cable. At Dounreay West substation in Caithness works were temporarily suspended in November 2024 following the identification of suspected radium during planned radiation monitoring activities. In April 2025, agreement was reached with SEPA to secure the necessary permit to allow works to recommence safely, with energisation still on track for 2028.

For the Skye Reinforcement project, all substation consents are in place, however a decision is still awaited from Scottish Ministers for overhead line consent, which continues to take significantly longer than anticipated following its submission back in September 2022. Substation enabling works have already commenced, with main construction works expected to start in 2026 and energisation by the end of 2029.

The Eastern Green Link (EGL) 2 project, the first of a series of 2GW subsea superhighways between Peterhead and England, is now in construction with groundworks progressing well at convertor station sites at Peterhead and Drax. This joint arrangement project with National Grid Electricity Transmission (NGET) remains on track for energisation in 2029.

All remaining ASTI substation and convertor station planning applications required for Pathway to 2030 delivery have now been submitted to the relevant Local Planning Authority, with most decisions expected throughout 2025. Coachford substation, which was part of the Beauly-Peterhead 400kV scheme, is no longer being taken forward following engineering and construction challenges identified through extensive site surveys and ground investigation works at the proposed site. A new substation site in the wider area will still be required for delivery in the early 2030s, which will now be rescoped and redeveloped.

In April 2025, the Fort Augustus substation was approved by the Highland Council's South Planning Committee. This is the first major ASTI planning application to be determined and a major milestone for the Pathway to 2030 investment programme.

All remaining Section 37 consents are due to be submitted in summer 2025 and are expected to be determined through the Scottish Government's new Priority Applications for Transmission Infrastructure guidance which sets out a 52-week determination ambition, including instances where a Local Public Inquiry is triggered.

Work to progress EGL3 continues, with the outcome of the supply chain tender expected in summer 2025. Energisation is now expected in the early 2030s due to delays in progressing required changes of scope to NGET's onshore infrastructure in Lincolnshire.

With the supply chain for the remainder of the ASTI projects already in place and all associated consents submitted, all other ASTI projects remain on track for 2030 delivery, subject to timely and positive consent decisions.

RIIO-T3 price control

In December 2024, SSEN Transmission submitted to Ofgem its Business Plan for the RIIO-T3 regulatory price control, covering the period from April 2026 to March 2031.

The plan sets out total expenditure of at least £22.3bn, in 2023/24 prices. This includes around £16bn of ASTI and LOTI investments already approved by Ofgem. The plan also sets out the potential for an additional £9.4bn of future Uncertainty Mechanism expenditure, which includes the regional and system operability investment required to deliver Clean Power 2030.

The successful delivery of this plan requires a financial framework that recognises the unprecedented levels of investment needed. Draft Determinations are expected on the 25th June 2025 ahead of Final Determinations in December 2025.

Growth opportunities

In December 2024 Ofgem reaffirmed the need for several additional strategic investments in the north of Scotland that were set out in the National Energy System Operator's (NESO's) 'Beyond 2030' report, providing initial funding to take these projects the consenting stage through the regulator's 'Delivery Track' funding route and access to Ofgem's new Advanced Procurement Mechanism.

These projects include a second HVDC link to Shetland and combined represent an investment of over £5bn for delivery between 2030 and 2035. Ofgem has also exempted these projects from competition.

Further investments will also be required to deliver the local and regional investments that are critical to support the UK Government's Clean Power 2030 target. This includes potential customer connections and system operability investments, all of which were submitted to Ofgem in February 2025 as an addendum to the RIIO-T3 Business Plan. 

A further high capacity HVDC subsea link from the north-east of Scotland to England, EGL5, which follows a change in scope by the NESO from its previously proposed coordinated offshore grid, presents additional future growth opportunities.

These additional growth opportunities were included within the potential £9.4bn RIIO-T3 Uncertainty Mechanism expenditure noted above.

SSEN Distribution

SSEN Distribution, operating under licence as Southern Electric Power Distribution plc (SEPD) and Scottish Hydro Electric Power Distribution plc (SHEPD), serves more than 3.9m homes and businesses across central southern England and the north of Scotland. The business serves some of the most diverse and unique geographies across the UK, spanning more than 75,000km², and keeps customers and communities connected while developing the flexible electricity network vital to achieving net zero.

RAV, Customer minutes lost and Customer interruptions figures estimated and subject to outturn of annual regulatory process

Financial performance

Adjusted and reported operating profit increased by 170% to £736.0m compared to £272.1m in the prior year. The large increase in price control allowed revenues in the year reflects that 2024/25 was the earliest financial year when unexpectedly-high cost inflation in 2022/23 and 2023/24 could be recovered, as tariffs are set 15 months before the start of financial year. This one-off cost inflation catch-up is partially offset by increasing operating costs associated with business transformation and improving network resilience, as well as higher depreciation on a growing asset base.

Operational delivery - RIIO-ED2

SSEN Distribution has completed the second year of the five-year RIIO-ED2 price control which runs until March 2028 and includes £3.6bn of baseline expenditure (2020/21 prices). It also provides the opportunity to trigger additional funding under Uncertainty Mechanisms (UMs) which could add at least £0.7bn to expenditure in the period.

During the financial year, an additional £106m has been secured through UMs related to investment in subsea and on island infrastructure, storm resilience and cyber security. An additional £236m of UMs are currently being assessed by Ofgem, with further submissions planned in the remaining years of the price control.

Customer performance

In RIIO-ED2, the ability to secure higher incentive performance has been tightened compared to previous price control periods. Within the Interruptions Incentive Scheme (IIS), SSEN is offered an incentive on its performance against the loss of electricity supply through the recording of the number of Customer Interruptions (CI) and Customer Minutes Lost (CML). These include planned, as well as unplanned, interruptions.

Following a challenging start in the first year of the price control, IIS performance across both measures improved in the SEPD region in 2024/25, with a decrease in CI of 18% and CML by 12% due to targeted improvement work. However, an unsettled winter in the SHEPD region adversely impacted CI and CML performance, with small increases of 4% and 5% respectively. An overall penalty of £9m was incurred across SEPD and SHEPD under the scheme, reduced from £14m in 2023/24.

Cumulative investment of over £40m in automation across both licence areas continues to have a positive impact on SSEN Distribution's ability to reconfigure the system quickly and remotely, following unplanned faults. This, alongside projects to reinforce the network, aims to improve IIS performance in future years.

SSEN Distribution's performance in exceptional storm events remains a strength. In January 2025, Storm Éowyn, which the Met Office called the 'strongest storm in a decade', caused 580 faults on SHEPD's network. Power was restored to 95% of the 92,000 customers affected within 48 hours and customer service during the storm was maintained at close to BAU levels.

Customer Satisfaction performance remains a clear focus for the business. The Broad Measure incentive score remained broadly level in 2024/25 across SEPD and SHEPD but new technology and process improvements, including self-serve functionality and improved channel options, are expected to benefit future performance.

SSEN's Distribution System Operations (DSO) activities are estimated to have received an around £4m reward in 2024/25 through the DSO Annual Incentive process. Achieving upper-tier performance against other DNOs, SSEN's "exceptionally well-put together" submission was praised by Ofgem's independent panel.

Capital investment

The second year of RIIO-ED2 has seen an acceleration of the major capital investment programme across both networks. This is delivering performance improvements, an improved service for customers, and future earnings through RAV growth.

In the SEPD region £1bn of investment is to be delivered under efficient Capital Delivery Agreements with three contract partners. A £200m, multi-year programme of investment to transform Oxfordshire's local electricity system is getting under way and work began on a £12m project to improve Bournemouth's local network, following two £8m network reinforcement projects in Portsmouth and Southampton which will be completed later this year.

In SHEPD, similar holistic contracts worth £450m have been signed with five contract partners to deliver network improvements across the north of Scotland licence area by the turn of the decade. During 2024/25, the laying of a new 2km subsea cable linking Islay with Jura was completed, ensuring a safe, reliable supply for these communities.

Proposals for the 'Shetland Standby Project' were approved in December 2024, with £93m of funding awarded over 10 years. A battery storage system will be built to provide interim supply in the event of a network fault while Lerwick power station is brought out of standby mode. Work will accelerate later this year, with energisation due in 2026.

Growth opportunities

The National Infrastructure Commission's recent call for greater proactive investment in Electricity Distribution networks aligns with SSEN Distribution's progressive approach to strategic development planning. The NIC estimates between £37-50bn of investment in the GB distribution network is needed by 2050 which represents a doubling of current annual allowances for load-related expenditure, on top of 'business as usual' investment. This aligns with SSEN Distribution's work to develop Strategic Development Plans at each Grid Supply Point (GSP).

SSEN's award-winning Local Energy Net Zero Accelerator (LENZA) tool has now been adopted by all local authorities based wholly within its network areas. 455 local planners - a three-fold increase in a year - are now using LENZA to devise the most-efficient locations for decarbonised developments in their communities.

This move to a strategically-planned and long-term investment approach is also informing SSEN Distribution's submission to the RIIO-ED2 load-related Uncertainty Mechanism later this year and emerging thinking ahead of the ED3 price control which begins in 2028. Further detail is included in SSEN's Empowering Communities, Enabling Growth publication, issued in early May 2025. In late April, Ofgem published its Framework Decision for ED3 which signalled a clear shift to a more planned and proactive approach to investment. It is expected to build on this approach in its Sector Specific Methodology Consultation, launching in the summer of this year.

SSE Renewables

SSE Renewables is a leading developer and operator of renewable energy generation, focusing on onshore and offshore wind, hydro, solar and battery storage across the UK and Ireland, and in carefully selected international markets.

1. Capacity and output based on 100% of wholly owned sites and share of joint ventures

2. Total renewable generation capacity is increased by 525MW. This principally reflects 443MW from Viking wind farm, 50MW from Salisbury BESS and 28MW from Chaintrix wind farm.

3. Contracted capacity includes sites with a CfD, RESS contract, eligible for ROCs, or contracted under REFIT (CfD contracts may be still to commence)

4. Onshore GB wind output includes 1,290GWh of compensated constrained-off generation in FY2024/25 and 530GWh in FY2023/24; Offshore GB wind output includes 1,748GWh of compensated constrained-off generation in FY2024/25 and 701GWh in FY2023/24.

5. Biomass capacity of 15MW and output of 69GWh in FY2024/25 and 77GWh FY2023/24 is excluded, with the associated operating profit or loss reported within SSE Thermal.

Financial performance

Adjusted operating profit increased by 25% to £1,038.8m from £833.1m in the prior year. The increase reflected 18% higher output driven principally by increased operating capacity with Viking onshore wind farm (443MW) reaching completion in August 2024 and a full year contribution from Seagreen offshore wind farm (1,075MW, SSE share 49%). The increase in output was delivered in a higher hedged price environment, with 2024/25 hedge prices around 30% higher than the prior year, delivering value for SSE Renewables despite a still volatile price environment.

Reported operating profit decreased to £617.6m from £630.3m in the prior year. This reflects the above and other movements including a non-cash impairment of £249.5m relating to the Southern Europe Renewables pipeline, reflecting delays in permitting and grid connections resulting in a slower than originally anticipated build of these projects, and an increase in the Joint Venture / associate share of interest and tax.

Operational delivery

Year-on-year onshore wind volume increased by 31% from 4.6TWh to 6.0TWh, primarily due to the addition of Viking. Weather conditions were variable throughout the year, and operational availability was negatively impacted by the effects of Storm Éowyn in January 2025.

In offshore wind, output increased by 22% from 3.2TWh to 3.9TWh. The increase is primarily driven by the first full year of operations of Seagreen which saw a year-on-year increase in production, partially offset by variable weather conditions over the winter months.

In hydro, plant availability was strong but production decreased by 4% from 3.1TWh to 2.9TWh due to the impact from highly variable weather, ranging from extended lower-than-average rainfall periods to extreme storm events. Tummel Bridge returned to service in September 2024 following refurbishment, increasing output by 6MW to 40MW during optimum conditions.

Agreements for de-rated capacity were secured in the T-4 GB capacity auction for 1,238MW of hydro, pumped storage, onshore wind and solar generation at a clearing price of £60/kW. In the T-1 capacity auction, SSE Renewables secured a one-year contract for 30MW (SSE share) of offshore generation at Seagreen for delivery year 2025/26. In Ireland, contracts were secured for 11MW of onshore wind and 14MW of battery storage (10-year agreement) in Ireland for delivery year 2028/29.

Delivering world-class assets

Onshore, in addition to the delivery on time and on budget of Viking in Shetland, SSE Renewables is approaching completion and full commercial operations at Yellow River Wind Farm (101MW) in Ireland which is contracted under a 16.5-year RESS 3 contract with the Irish Government.

Following a final investment decision in December 2024, construction commenced in May 2025 on Strathy South wind farm (208MW) in the Scottish Highlands. The project - fully contracted through a 15-year Allocation Round 5 (AR5) CfD contract with the UK Government - is targeting commercial operations in late 2027. At Aberarder wind farm (50MW) in Scotland, also fully contracted under an AR5 CfD contract, turbine deliveries will commence in summer 2025 ahead of commercial operations by the end of 2026.

In England, SSE Renewables is finalising construction of its 150MW Ferrybridge battery energy storage system (BESS) project, with commercial operations expected in summer 2025. Battery installation is ongoing at Monk Fryston BESS (320MW) and Fiddlers Ferry (150MW) ahead of expected operations in early and late 2026, respectively.

At Seagreen, an agreement was signed in March 2025 to sell the Offshore Transmission Assets as required by the offshore transmission regime.

At Dogger Bank A (1,200MW, SSE share 40%), offshore turbine installation and commissioning continues. In April 2025, turbine installation passed the halfway mark, and the project remains on track to reach completion within the second half of 2025.

On Dogger Bank B (1,200MW, SSE share 40%), all 95 monopile foundations have been installed while interarray cable-laying work is expected to complete in summer 2025. On Dogger Bank C (1,200MW, SSE share 40%), installation of monopile foundations has commenced and the last of the foundations has been delivered to storage. A second jack-up vessel, the Seaway Ventus, will join the turbine installation campaign in the second quarter of 2026 to support delivery of Dogger Bank B and C.

In hydro, improvement works are continuing on assets to maximise run-off, storage and optimisation benefits. In February 2025, a £70m investment to repower the 45MW Lochay power station and extend its operational life by at least another 40 years was announced. In March 2025, Inverawe power station (22.75MW) secured a 15-year refurbishment contract in the GB T-4 capacity auction.

In north-east France, Chaintrix (28MW) entered commercial operations in February 2025. Construction is ongoing at Jubera (64MW) in northern Spain, targeting commissioning at the end of 2025. In southern Italy, construction has commenced at the combined Castel Favorito and Masseria la Cattiva (together 17MW) with commercial operations expected in 2026.

Growth opportunities

In onshore development, SSE continues to progress Drumnahough wind farm (60MW, SSE share 50%) in Ireland and Cloiche wind farm (130.5MW) in Scotland, both fully contracted in 2024 under Ireland's RESS-4 and the UK's AR6 auction rounds, towards final investment decisions expected in the second half of 2025. 

In offshore development, outline planning permission was granted in November 2024 for Berwick Bank wind farm's (4.1GW) remaining onshore transmission infrastructure and grid connection in Northumberland. SSE Renewables expects to receive a determination by Scottish Government ministers on its Section 36 consent application for the offshore aspects of the project by summer 2025.

The UK Government's CfD Allocation Round 7 (AR7) is expected to open towards the end of summer 2025. Depending on the final auction eligibility criteria, SSE could have onshore and offshore wind projects eligible to participate.

In March 2025, Ofgem and DESNZ jointly published a high-level design of the long-duration electricity storage cap and floor scheme. The first application window is open with the first projects to be awarded a cap and floor contract by Q2 2026. SSE intends to submit its Coire Glas pumped hydro storage project (c.1,300MW) into the first window subject to the level of risk and uncertainty associated with large-scale pumped storage hydro investment being appropriately recognised in the scheme.

SSE Thermal

SSE Thermal owns and operates conventional flexible thermal generation in GB and Ireland, whilst actively exploring opportunities for growth in lower-carbon generation technologies. SSE Thermal's flexible and efficient fleet of gas-fired generation will continue to play a critical role in the transition to net zero, providing reliable back-up power that complements intermittent renewable energy.

1 Capacity is wholly owned and share of joint ventures, and reflects Transmission Entry Capacity.

2 Output is based on SSE 100% share of wholly owned sites and 100% share of Marchwood PPAs due to the contractual arrangement.

3 During the year ended 31 March 2025, SSE Thermal took responsibility for the Slough Heat and Power business from SSE Enterprise. Comparative performance has been restated.

Financial performance

Adjusted operating profit decreased by 67% to £248.5m, compared to £752.5m in the prior year. This decrease was in line with expectations set out at the start of the financial year and principally driven by lower spark spread prices and significantly lower market volatility due to continued normalisation of energy prices. The result also reflects a fall of £38m in Capacity Market payments compared to the previous year, reflecting the lower T-1 auction outturn, as well as a £38.8m one-off benefit from the sale of land at Ferrybridge.

Reported operating profit decreased to £240.8m, compared to £660.8m in the prior year. In addition to the movements above, the prior year result was impacted by a £(63.2)m non-recurring impairment charge on Triton Power and losses on re-measurements of operating derivatives in that business.

Operational delivery

Thermal plants continue to provide back-up reserve to the renewables-led system as well as flexible response as overall UK balances change. Increasingly this means that the value of the intrinsic baseload spark spread is less relevant to SSE Thermal revenues, and value is accrued through the Capacity Market, providing dispatchable capacity during periods of tight system margin, offering the National Energy System Operator (NESO) services though the Balancing Mechanism and other ancillary contracts, and through trading the option value of assets.

Managing availability responsibly, both within year and taking a view of future system needs, continues to be a priority for SSE Thermal. As such, the fleet delivered strong commercial availability overall although extended outages at Great Island limited its operation in the market at times. Likewise, planned and unplanned outages at Keadby 2 also reduced opportunities to secure value during the year.

The UK Government's recently announced Clean Power 2030 Plan indicates a need for around 35GW of unabated thermal plant to be on the system into the 2030s. With older existing assets (Keadby 1, Medway and Peterhead) now expected to play an important role on the system for longer than originally anticipated, and at least to 2035, SSE Thermal is now proactively planning investment across a number of years to build in additional longevity and resilience across the fleet.

Construction programme

Construction and commissioning of Slough Multifuel (55MW) was completed in August 2024. The 50/50 joint venture energy-from-waste plant was delivered ahead of schedule and on budget, with its 15-year Capacity Market agreement commencing in October 2024.

In Ireland, construction of a 150MW Temporary Emergency Generation unit at Tarbert has completed, with some final scopes being completed this year. Delivered at the request of Irish authorities, the unit is now available to the system and will only be utilised when market-sourced generation is insufficient to meet system needs.

On the same site, construction will begin this year on the 300MW Tarbert Next Generation power station ahead of a planned completion by the end of 2027. The construction cost is expected to total up to €300m, and the station benefits from a 10-year capacity agreement which has secured a total of €335m of revenues.

Growth opportunities

SSE Thermal is committed to bringing forward new flexible generation which can support short-term security of supply requirements while also delivering long-term decarbonisation. As a pragmatic partner to government, the business is developing options in both GB and Ireland which can deliver much-needed capacity ahead of anticipated increases in electricity demand, recognising that some new unabated flexible power may be needed to fill a gap if low-carbon options cannot be delivered in time.

In December 2024, SSE Thermal launched Mission H2 Power with Siemens Energy, which aims to deliver gas turbine technology capable of running on 100% hydrogen. This will directly support the decarbonisation of Keadby 2 as well as the wider development of a low-carbon power portfolio, with the UK Government confirming its intention to develop a Dispatchable Power Agreement to support deployment of hydrogen-to-power.

SSE Thermal continues to progress plans for new 'decarb-ready' power stations which would initially run on natural gas before converting to hydrogen. Public consultations have been completed for the 900MW Keadby Next Generation power station in North Lincolnshire, with planning expected to be submitted later this year.

The UK Government Comprehensive Spending Review, expected summer 2025, should provide an update on further deployment of carbon capture technology and implications for SSE Thermal's proposed up to 900MW Peterhead and Keadby Carbon Capture power stations.

In April 2025, Aldbrough Hydrogen Pathfinder was shortlisted in the UK Government's Hydrogen Allocation Round 2 process and received planning permission. Subject to reaching a final investment decision, the project could be operational by 2029.

In Ireland, planning permission has been granted for Platin power station in County Meath with a final investment decision targeted later this year, and for a synchronous compensator at Great Island, which could bring an additional source of revenue if a contract for Low Carbon Inertia Services is secured.

Gas Storage

SSE holds around 40% of the UK's conventional underground gas storage capacity at two sites on the east Yorkshire coast. The Atwick facility, near Hornsea, is wholly owned by SSE, while the Aldbrough facility is operated as a joint venture with Equinor. These two sites support the security of gas supply for the UK whilst providing important liquidity to the UK and interconnected gas markets.

Financial performance

Adjusted operating profit decreased to a £(37.1)m loss, compared to a profit of £82.8m in the prior year. A typical year sees gas injected in the summer months when prices are low and then withdrawn and sold in winter months when prices are higher. The past year has seen unusual market conditions for these assets with the impact of mandatory gas storage filling targets in the European Union, and proposed gas storage support in Germany driving summer prices higher than those in the winter, distorting the natural functioning of the market and limiting the assets' ability to trade and secure value. However, the markets are now providing pockets of valuable spread and summer re-injection has commenced.

Reported operating loss increased to a £(45.5m), compared to a loss of £(42.2)m in the prior year. In addition to the movements above, this mainly reflects a £(134.1)m impairment charge in the prior year which was not repeated this year.

Operational delivery

SSE's Gas Storage business continues to be an important risk management tool for the Group's generation portfolio. It offers flexibility as a result of the assets' technical ability to cycle quickly and mitigate exposures from wind speeds and demand variability, which drives short-term gas demand from thermal generation.

Third party contracts were secured with three customers for injection and withdrawal, locking in value for the assets while maintaining the ability to trade the remaining capacity. However, the gas markets demonstrated limited volatility over the course of the financial year, with minimal spreads between Summer 2024 and Winter 2024 prices reducing the ability to secure value.

Injection availability at Atwick was limited from August, due to planned maintenance on Cavern Three and the compressors. At Aldbrough, all caverns provided strong injection and withdrawal availability across the full year. Political intervention in the wider European gas storage market was one of the major factors which limited and even inverted the normal summer / winter spreads.

Work is under way to prepare Cavern Eight at Atwick for potential rewatering in the next financial year. If a decision to rewater is taken, it would create an opportunity to secure value from the maintained cushion gas, whilst leaving open the future possibility to return to service as natural gas or hydrogen storage, should market conditions support this.

Growth opportunities

Ahead of the National Energy System Operator taking on this responsibility in 2026, the UK Government is progressing work on strategic planning of hydrogen storage and transport infrastructure. In November 2024, the Government began early engagement, as a first step in a formal procurement process for hydrogen storage. This was followed by confirmation in December 2024 that the Government aims to publish details for the first allocation during 2025, with an ambition for up to two storage projects to be in operation or construction by 2030. To support this ambition, a planning application for Aldbrough Hydrogen Storage is being targeted for late 2025.

Energy Customer Solutions

Energy Customer Solutions (ECS) is SSE's shop window to the non-domestic market in GB and the whole energy supply market on the island of Ireland, with dedicated energy experts as key account managers pulling together the best of SSE into powerful combined propositions.

During the year, ECS has continued to focus on serving customers; extending our service range and expanding our product portfolio. Tight commercial and risk controls have enabled the business to navigate volatility while providing a range of tariffs and low carbon solutions to all customer segments. 

In January the former SSE Enterprise division merged with ECS to achieve a greater range of integrated energy solutions, including distributed energy offerings for cities and large energy customers. During the year the breadth of ECS's Corporate Power Purchase Agreement products was extended, securing major customers in the retail and banking sectors.

SSE Airtricity

Financial performance

Adjusted profitability increased 68% to £159.4m, from £95.0m in the prior year. The prior year saw lower margins as the business supported customers through the cost-of-living crisis and by largely absorbing the impact of higher commodity costs and indirect costs including bad debt expenses. The normalisation of energy prices in the last financial year meant the business was able to deliver tariff reductions within year whilst also returning supply margins to more sustainable levels. In addition, income from legacy wind farms contracted to SSE Airtricity remained robust, increasing by around £10m compared to prior year.

Reported operating profit also increased to £157.0m compared to £94.5m in the prior year, mainly reflecting a £(2.0)m restructuring charge relating to the Group operating model and efficiency review in addition to the movements above.

Operational delivery

SSE Airtricity has achieved an increase in customer accounts to 770,000 thanks to a market-leading fixed-price offer and strong customer service. We aim to support customers to understand and reduce their energy bills and the business is pleased that around 20% of customer acquisitions are on a smart product.

Airtricity has a long history of financial support for customers and in October 2024 it decided against passing through significant increases in transmission and distribution charges during winter, a decision which suppressed margins in the second half of the year. Following other market movements, it announced in February 2025 that it would increase tariffs by an average of 9.5% with effect from 2 April to collect these regulated charges from customers.

Beyond energy supply, Airtricity actively develops propositions that will help lower bills and move customers towards a low carbon pathway. During the financial year, a partnership with Activ8 Energies installed solar on over 2,000 rooftops, lowering bills by up to 50%. Energy Services products were delivered to around 5,000 customers throughout the year, ranging from Smart home surveys and heating upgrades to full-scale domestic retrofits.

Airtricity also supported customers to access up to £20m in grant funding. New partnerships have also been formed with Ohme and Nevo to help deliver integrated product offerings including Electric Vehicles (EVs), home charging and a smart EV tariff. 

SSE Business Energy

1 During the year ended 31 March 2025, SSE Business Energy has taken responsibility for private electric networks and businesses aligned with the provision of low carbon energy solutions to customers from SSE Enterprise. Comparative performance has been restated.

Financial performance

Adjusted profitability decreased by 41% to £32.7m compared to £55.2m in the prior year. The focus for the business during the past year was the stabilisation of a new customer management and billing system known as Evolve.

During the stabilisation period, servicing of existing customers was prioritised whilst acquisition and onboarding activity was limited, contributing to an overall reduction in customer numbers and volumes sold. This was partially offset by a lower bad debt expense as improved customer data from the Evolve system, lower customer tariffs and a more stable market price environment reduced the overall level of provisioning required.

Reported operating profit also decreased to £32.2m compared to £55.2m in the prior year, reflecting the movements above in addition to a £(0.5)m share of interest and tax from Joint Ventures.

Operational delivery

Over the last 12 months, Business Energy (BE) has delivered solid performance with a focus on billing platform stabilisation and the extension of low-carbon and distributed energy solutions. Evolve has been implemented, modernising the IT estate and providing the basis for improved customer experience, product delivery and commercial controls.

The business understands the needs of commercial customers of all sizes and has selected a small number of partners to bring a range of propositions to market. A partnership with Ortus Energy, offering rooftop solar installations to commercial customers, includes the acquisition of 13MW of existing rooftop solar assets and the option to finance up to 130MW of future projects over the next three years.

In July 2024 a Joint Venture was agreed with TotalEnergies - Source - to deploy and operate up to 3,000 high power charge points, grouped in 300 EV hubs. The joint venture has made a strong start with 222 charge points at 24 EV charging hubs completed. 

Growth opportunities

As the shop window for SSE, backed by the Group's generation assets, ECS will continue to deliver access to increasing volumes of green energy from SSE's wind farms for all customer segments. With the proven ability to innovate and create partnerships, ECS will continue to provide a growing suite of energy products and distributed energy solutions to support customers on the journey to net zero, including Corporate Power Purchase Agreements.

The business aims to remove complexity for customers as they reduce their carbon emissions. In Ireland, ECS currently provides around 85% of the energy by volume used by data centres and will continue to target the tech and pharma sectors where the strongest growth is expected.

In GB, the UK Government's focus on growth and devolution to regions is an opportunity to leverage strong relationships the business has with combined authorities and other public bodies.

SSE Energy Markets

SSE Energy Markets commercially optimises all of SSE's market-based Business Unit assets in the wholesale energy markets, securing value on behalf of these businesses by trading in wholesale energy markets and managing volatility through active risk management.

This involves trading the principal commodities to which SSE's asset portfolios are exposed, as well as the spreads between two or more commodity prices (e.g. spark spreads): power (baseload and other products); gas; and carbon (emissions allowances). Each commodity has different risk and liquidity characteristics, which impacts the quantum of hedging possible.

This is supplemented by optimisation activities and position taking - both subject to strict position limits and value at risk controls - and contracting for third party Power Purchase Agreement (PPA) and route-to-market contracts.

1 During the year ended 31 March 2025, SSE Energy Markets has taken responsibility for energy optimisation services from SSE Enterprise. Comparative performance has been restated.

Financial performance

Adjusted operating profit has decreased 20% to £30.0m from a £37.5m profit in the prior year. Energy Markets continues to drive significant value for the energy-exposed businesses through its trading services and the business itself generates a relatively low level of baseline operating earnings from these services. The decrease in year-on-year profitability is mainly due to reduced margin on optimisation activities given the continued normalisation of volatility and price of power and gas trades in the market.

Reported operating profitability decreased to a loss of £(42.9)m from a profit of £588.6m in the prior year. In addition to the movements above, the reported operating result includes net re-measurement losses on forward commodity derivatives relative to a large gain in the prior year. These IFRS 9 re-measurements exclude any re-measurement of 'own use' contracts and are unrelated to underlying operating performance.

Operational delivery

SSE Energy Markets has continued to play a pivotal role in navigating energy market volatility, managing risk and ensuring the Group's market-based Business Units can capture and maximise value. This covers all trading periods, with decisions being made from one centre of excellence. The value Energy Markets secures for SSE's asset portfolio continues to be reported against individual Business Units.

The business has an increasing focus on building a portfolio of third party assets, bringing added independent value to the Group. In the financial year, SSE Energy Markets signed a 10-year agreement to optimise two major battery energy storage systems being developed by Copenhagen Infrastructure Partners (CIP) in Scotland with a combined capacity of 1GW.

It also signed a number of route-to-market PPA contracts ranging from two to 15-year terms. In total, SSE Energy Markets now holds route-to-market contracts with 2.75GW of assets which are backed by a Contract for Difference, of which around 2.3GW are classed as third party.

SSE Energy Markets has also increased the volumes it is trading in European power and gas markets, subject to strict position limits and Value at Risk (VAR) controls, which will be critical as the Group seeks opportunities in carefully selected international markets. It has also continued to adapt to the shifting energy landscape by further strengthening its data and advanced analytics capabilities.

Alternative Performance Measures

When assessing, discussing and measuring the Group's financial performance, management refer to measures used for internal performance management. These measures are not defined or specified under International Financial Reporting Standards ("IFRS") and as such are considered to be Alternative Performance Measures ("APMs").

By their nature, APMs are not uniformly applied by all preparers including other participants in the Group's industry. Accordingly, APMs used by the Group may not be comparable to other companies within the Group's industry.

Purpose

APMs are used by management to aid comparison and assess historical performance against internal performance benchmarks and across reporting periods. These measures provide an ongoing and consistent basis to assess performance by excluding items that are materially non-recurring, uncontrollable or exceptional. These measures can be classified in terms of their key financial characteristics:

· Profit measures allow management to assess and benchmark underlying business performance during the year. They are primarily used by operational management to measure operating profit contribution and are also used by the Board to assess performance against business plan. The Group has six profit measures, of which adjusted operating profit and adjusted profit before tax are the main focus of management through the financial year and adjusted earnings per share is the main focus of management on an annual basis. In order to derive adjusted earnings per share, the Group has defined adjusted operating profit, adjusted net finance costs, and adjusted current tax charge as components of the adjusted earnings per share calculation. Adjusted EBITDA is used by management as a proxy for cash derived from ordinary operations of the Group.

· Capital measures allow management to track and assess the progress of the Group's significant ongoing investment in capital assets and projects against their investment cases, including the expected timing of their operational deployment and also to provide a measure of progress against the Group's strategic Net Zero Acceleration Programme Plus objectives ("NZAP Plus").

· Debt measures allow management to record and monitor both operating cash generation and the Group's ongoing financing and liquidity position.

During the year the Group simplified its adjusted profit metrics by removing the adjustment for interest on net pension assets/liabilities valued under IAS 19 "Employee Benefits" as explained in note 2.3.2 to the Summary Financial Statements. There have been no other changes to the Group's APMs in the current year.

The following section explains the key APMs applied by the Group and referred to in these Summary Financial Statements:

Profit measures

Rationale for adjustments to profit measures

1. Movement on operating and financing derivatives ("certain re-measurements")

This adjustment can be designated between operating and financing derivatives.

Operating derivatives are contracts where the Group's SSE Energy Markets function enters into forward commitments or options to buy or sell electricity, gas and other commodities to meet the future demand requirements of the Group's SSE Business Energy and SSE Airtricity operating units, or to optimise the value of the production from SSE Renewables and Thermal generation assets or to conduct other trading subject to the value at risk limits set out by the Energy Markets Risk Committee. Certain of these contracts (predominantly purchase contracts) are determined to be derivative financial instruments under IFRS 9 and as such are required to be recorded at their fair value. Changes in the fair value of those commodity contracts designated as IFRS 9 financial instruments are reflected in the income statement (as part of "certain re-measurements"). The Group shows the change in the fair value of these forward contracts separately as this mark-to-market movement is not relevant to the underlying performance of its operating segments due to the volatility that can arise on revaluation. The Group will recognise the underlying value of these contracts as the relevant commodity is delivered, which will predominantly be within the subsequent 12 to 24 months. Conversely, commodity contracts that are not financial instruments under IFRS 9 (predominantly sales contracts) are accounted for as "own use" contracts and are consequently not recorded until the commodity is delivered and the contract is settled. Gas inventory purchased by the Group's Gas Storage business for secondary trading opportunities is also held at fair value with gains and losses on re-measurement recognised as part of "certain re-measurements" in the income statement. Finally, the mark-to-market valuation movements on the Group's contracts for difference contracts entered into by SSE Renewables that are not designated as government grants and which are measured as Level 3 fair value financial instruments are also included within "certain re-measurements".

Financing derivatives include all fair value and cash flow interest rate hedges, non-hedge accounted (mark-to-market) interest rate derivatives, cash flow foreign exchange hedges and non-hedge accounted foreign exchange contracts entered into by the Group to manage its banking and liquidity requirements as well as risk management relating to interest rate and foreign exchange exposures. Changes in the fair value of those financing derivatives are reflected in the income statement (as part of "certain re-measurements"). The Group shows the change in the fair value of these forward contracts separately as this mark-to-market movement is not relevant to the underlying performance of its operating segments.

The re-measurements arising from operating and financing derivatives, and the tax effects thereof, are disclosed separately to aid understanding of the underlying performance of the Group.

2. Exceptional items

Exceptional charges or credits, and the tax effects thereof, are considered unusual by nature or scale and of such significance that separate disclosure is required for the underlying performance of the Group to be properly understood. Further explanation for the classification of an item as exceptional is included in note 4.2.

3. Adjustments to Gas Production decommissioning provision

The Group retains an obligation for 60% of the decommissioning liabilities of its former Gas Production business which was disposed in October 2021. The revaluation adjustments relating to these decommissioning liabilities are accounted for through the Group's consolidated income statement and are removed from the Group's adjusted profit measures as the revaluation of the provision is not considered to be part of the Group's core continuing operations.

4. Share of joint ventures and associates' interest and tax

This adjustment can be split between the Group's share of interest and the Group's share of tax arising from its investments in equity accounted joint ventures and associates. The Group is required to report profit before interest and tax ("operating profit") including its share of the profit after tax from its equity accounted joint ventures and associates. However, for internal performance management purposes and for consistency of treatment, SSE reports its adjusted operating profit measures before its share of the interest and/or tax on joint ventures and associates. The presentation of the Group's share of profits from equity accounted investments is expected to change on adoption of IFRS 18 (see note 3.2), at which point it is expected that the Group's APM reconciliation will also change.

5. Share of joint ventures and associates' depreciation and amortisation

For management purposes, the Group considers EBITDA ("earnings before interest, tax, depreciation and amortisation") based on a sum-of-the-parts derived metric which includes a share of the EBITDA from equity accounted investments. While this is not equal to adjusted cash generated from operating activities, it is considered useful by management in assessing a proxy for such a measure, given the complexity of the Group structure and the range of investment structures utilised. For the purpose of calculating the "Net Debt to EBITDA" metric, "adjusted EBITDA" is further refined to remove the proportion of adjusted EBITDA from equity-accounted joint ventures relating to off-balance sheet debt (see note 6.3).

6. Depreciation expense on fair value uplifts

The Group's strategy includes the realisation of value (developer gains) from divestments of stakes in SSE Renewables' offshore and international developments. In addition, for strategic purposes the Group may also decide to bring in equity partners to other businesses and assets. Where SSE's interest in such vehicles changes from full to joint control, and the subsequent arrangement is classified as an equity accounted joint venture, SSE may recognise a fair value uplift on the re-measurement of its retained equity investment. Those non-cash accounting uplifts will be treated as exceptional gains in the year of the relevant transactions completing. Furthermore, SSE may acquire businesses or joint venture interests which are determined to generate an exceptional opening gain on acquisition and accordingly an exceptional accounting fair value uplift to the opening assets acquired will be recorded. These uplifts create assets or adjustments to assets, which are depreciated or amortised over the remaining life of the underlying assets or contracts in those businesses with the charge being included in the Group's depreciation and amortisation expense. The Group's adjusted operating profit, adjusted profit before tax and adjusted earnings per share are therefore adjusted to exclude any additional depreciation, amortisation and impairment expense arising from the fair value uplifts given these charges are derived from significant one-off gains, which are treated as exceptional when initially recognised.

7. Release of deferred income

The Group deducts the release of deferred income in the year from its adjusted EBITDA metric as it principally relates to customer contributions against depreciating assets. As the metric adds back depreciation, the income is also deducted.

8. Deferred tax

The Group adjusts for deferred tax when arriving at adjusted profit after tax, adjusted earnings per share and its adjusted effective rate of tax. Deferred tax arises as a result of differences in accounting and tax bases that give rise to potential future accounting credits or charges. As the Group remains committed to its ongoing capital programme, the liabilities associated are not expected to reverse and accordingly the Group excludes these from its adjusted profit measures.

9. Results attributable to non-controlling interest holders

The Group's structure includes non-wholly owned but controlled subsidiaries which are consolidated within the financial statements of the Group. The most significant of those is SSEN Transmission, a 25% stake in which was divested on 30 November 2022. The Group has removed the share of profit attributable to holders of non-controlling equity stakes in all such businesses from the point when the ownership structure changed from all of its profit measures, to report all metrics based on the residual share of profits items attributable to the ordinary equity holders of the Group. The adjustment has been applied consistently to all of the Group's adjusted profit measures, including removing proportionate non-controlling share of operating profit and depreciation and amortisation from the Group's adjusted EBITDA metric; removing the non-controlling share of operating profit from the Group's adjusted operating profit metric; removing the non-controlling share of net finance costs from the Group's adjusted net finance costs metric; and removing the non-controlling interest share of current tax from the Group's adjusted current tax metric.

EBITDA

\* The comparative has been restated. See note 2.3.2.

EBITDA

Debt measure

Rationale for adjustments to debt measure

10.  Cash held and posted as collateral and other deposits

Cash held and posted as collateral refers to cash balances received from and deposited with counterparties including trading exchanges. Collateral balances mostly represent initial and variation margin, required as part of the management of the Group's exposures on commodity contracts, that will be received on maturity of the related trades. Deposits with a maturity of more than three months are also included in this adjustment. The Group includes this adjustment to better reflect the immediate cash resources to which it has access, which in turn better reflects the Group's funding position.

11.  Lease obligations

SSE's reported loans and borrowings include lease liabilities on contracts within the scope of IFRS 16 "Leases", which are not directly related to external financing of the Group. The Group excludes these liabilities from its adjusted net debt and hybrid capital measure to better reflect the Group's underlying funding position with its primary sources of capital.

12.  External net debt and cash attributable to non-controlling interests

The Group's structure includes non-wholly owned but controlled subsidiaries which are consolidated within the financial statements of the Group under applicable accounting standards. The most significant of those is SSEN Transmission, a 25% stake in which was divested on 30 November 2022. Following completion of the transaction, the Group has removed the share of external debt and cash in these subsidiaries proportionately attributable to the non-controlling interest holders from its adjusted net debt and hybrid capital metric. While legal entitlement to these items has not changed, the Group makes this adjustment to present net debt proportionately attributable to ordinary equity holders of the Group.

13.  Hybrid equity

The characteristics of certain hybrid capital securities mean that they qualify for recognition as equity rather than debt under applicable accounting standards. Consequently, their coupon payments are presented within equity rather than within finance costs. As a result, the coupon payments are not included in SSE's adjusted profit before tax measure. To present total funding provided from sources other than ordinary shareholders, SSE presents its adjusted net debt measure inclusive of hybrid capital to better reflect the Group's funding position.

Capital measures

Rationale for adjustments to capital measures

14.  Joint ventures and associates' additions funding

Joint ventures and associates' additions included in the Group's capital measures represent the direct loan or equity funding provided by the Group to joint venture and associate arrangements in relation to capital expenditure projects. This has been included to better reflect the Group's use of directly funded equity accounted vehicles to grow the Group's asset base. Asset additions funded by project finance raised within the Group's joint ventures and associates are not included in this adjustment.

15.  Allowances and certificates

Allowances and certificates consist of purchased carbon emissions allowances and generated or purchased renewable source of generation certificates such as renewable obligations certificates ("ROCs"). Additions in the year are not included in the Group's "capital expenditure and investment" APM to better reflect the Group's investment in enduring operational assets.

16.  Customer or third party funded additions

Customer or third party funded additions represents additions to the Group's electricity and other networks that are financed by cash provided by third parties. Given these are directly funded by customers or third parties, these additions have been excluded to better reflect the Group's underlying investment position.

17.  Lease additions

Additions of right of use assets under the Group's IFRS 16 compliant policies for lease contracts are excluded from the Group's adjusted capital measures as they do not represent directly funded capital investment. This is consistent with the treatment of lease obligations explained at 11, above.

18.  Non-controlling interest share of capital expenditure

The Group's structure includes non-wholly owned but controlled subsidiaries which are consolidated within the financial statements of the Group. The most significant of those is SSEN Transmission, a 25% stake in which was divested on 30 November 2022. The Group has removed the share of capital additions attributable proportionately to these equity holders from its "adjusted investment and capital expenditure" and "adjusted investment, capital and acquisition expenditure" metrics. This is consistent with the adjustments noted elsewhere related to these non-controlling interests.

19.  Additions acquired through business combinations

Where the Group acquires an early-stage development company which is classified as the acquisition of an asset, or group of assets and not the acquisition of a business, the acquisition is treated as an addition to intangible assets or property, plant and equipment and is included within "adjusted investment and capital expenditure". Where the Group acquires an established business or interest in an equity-accounted joint venture requiring a fair value assessment in line with the principles of IFRS 3 "Business Combinations", the fair value of acquired consolidated tangible or intangible assets is excluded from the Group's "adjusted investment and capital expenditure", as they are not direct capital expenditure by the Group. However, the fair valuation of consideration paid for the business or investment is included in the Group's "adjusted investment, capital and acquisition expenditure" metric, see 20 below. During the current and prior year there were no significant business acquisitions.

20.  Acquisition cash consideration in relation to business combinations

The Group has outlined a significant investment programme which will partly be achieved through the acquisition of businesses with development opportunities for the Group. The cash consideration paid for these entities is included within the Group's "adjusted investment, capital and acquisition expenditure" metric as it provides stakeholders an accurate basis of cash investment into the Group's total development pipeline and is consistent with the reporting of the Group's Net Zero Acceleration Programme Plus. During the current and prior year there were no significant business acquisitions.

Summary Financial Statements

Consolidated Income Statement

for the year ended 31 March 2025