PENNON WATER SERVICES A NATIONAL NON-HOUSEHOLD RETAIL STRATEGY
OUR PENNON APPROACH DELIVERING GROWTH BY LEVERAGING THE STRENGTH OF THE GROUP MERGING WATER SIGNIFICANT OPPORTUNITY TO BUSINESS SERVICES COMPETITIVE CREATE INDUSTRY TO CREATE ADVANTAGE LEADER PLATFORM FOR THROUGH VIRIDOR NATIONAL GROWTH CUSTOMER BASE STRONG STRATEGY 30,000 VIRIDOR ALREADY WINNING AND UNIQUE CUSTOMERS CUSTOMERS OUT OF CUSTOMER EQUATING TO AREA – SCOTLAND, PROPOSITION OF C.90,000 ACCOUNTS FAWLEY , TEESIDE SUPPLEMENTARY SERVICES 2
CREATING A CREDIBLE NATIONAL PLATFORM BRINGING TOGETHER FIVE EXISTING INCOME STREAMS • Merger of South West Water and Bournemouth Water provides opportunity for larger, efficient retailer • Generating annual £136m of turnover, £3m of net margin (determined by Ofwat) • Current success with customer switching in Scotland • Out of area successes with Industrial customers at Fawley and Teeside – retail services and complementary value-added activity • Integration of existing businesses delivers operating synergies of c.10% 3
OUR STRATEGY TO RETAIN AND GROW DELIVERING A UNIQUE CUSTOMER PROPOSITION STRATEGY TO RETAIN EXISTING CUSTOMERS AND GROW THROUGH CUSTOMER ACQUISITION NATIONWIDE LOW RETAIL MARGINS SO CUSTOMER RETENTION IS KEY • Building foundation of strong retail relationships ADD VALUE THROUGH MARGIN ENHANCING SUPPLEMENTARY SERVICES • Flow monitoring • Leak detection and repair • Water hygiene services • Water management services CUSTOMER PROPOSITION BUILT ON SIMPLICITY AND TRANSPARENCY • Tariffs and services to help customers save water and save money 4
UNDERSTANDING THE OPPORTUNITY THE LARGEST COMPETITIVE WATER MARKET IN THE WORLD MARKET REVENUE NHH CUSTOMERS £2.5bn 1.2m Estimated nationally VALUE ADDED NET RETAIL MARGINS c.£100m 2.5% Determined by OFWAT FURTHER MARKET OPPORTUNITIES THROUGH VALUE- ADDED SERVICES 5
LEVERAGING PENNON’S NATIONAL FOOTPRINT COMPETITIVE ADVANTAGE THROUGH VIRIDOR’S 30,000 CUSTOMER BASE • Commercial customer relationships and culture already exist • Offers benefits to group and customers - Routes to market - Operating synergies - Joint customer proposition to secure Group position – savings on water bills can offset waste collection costs 6
OPPORTUNITY TO CREATE INDUSTRY LEADER LEVERAGING PENNON GROUP’S NATIONAL FOOTPRINT Thames Water • Existing Viridor base provides enough scale to move Severn Trent Water PWS to top five position United Utilities Yorkshire Water • Viridor key relationships: Anglian Water Welsh Water Northumbrian Water - T op 14 local authority customers present Pennon Water Services opportunity worth £54m revenue Affinity Water South East Water - Local authorities provide platform for growth Southern Water Wessex Water Bristol Water • Establishing scale creates efficiency and S. Staffordshire Water Portsmouth Water strengthens position ahead of potential household S&SE Water competition Dee Valley Water 0 50 100 150 200 250 NHH Customers (k) Viridor base 7
OUR PENNON APPROACH DELIVERING GROWTH BY LEVERAGING THE STRENGTH OF THE GROUP Waste Water business OPPORTUNITY management services TO CREATE customers A NATIONAL RETAILER (Viridor) (SWW & BW) GROUP CUSTOMER BASE NATIONWIDE PROVIDES OPPORTUNITIES FOR: - competitive advantage - efficiency - increased returns CREDIBLE RETAIL PRESENCE IN 2017 AHEAD OF POTENTIAL HOUSEHOLD COMPETITION 8
OUR PENNON APPROACH DELIVERING GROWTH BY LEVERAGING THE STRENGTH OF THE GROUP MERGING WATER SIGNIFICANT OPPORTUNITY TO BUSINESS SERVICES COMPETITIVE CREATE INDUSTRY TO CREATE ADVANTAGE LEADER PLATFORM FOR THROUGH VIRIDOR NATIONAL GROWTH CUSTOMER BASE STRONG STRATEGY 30,000 VIRIDOR ALREADY WINNING AND UNIQUE CUSTOMERS CUSTOMERS OUT OF CUSTOMER EQUATING TO AREA – SCOTLAND, PROPOSITION OF C.90,000 ACCOUNTS FAWLEY , TEESIDE SUPPLEMENTARY SERVICES 9
PENNON WATER SERVICES A NATIONAL NON-HOUSEHOLD RETAIL STRATEGY
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