Drax Group plc

Thank you and good morning, everyone. Welcome to our 2023 full year results presentation. I'm going to start on page three. So you're all familiar with our purpose and our ambition. And I want to start with that, as we always do, as it fundamentally guides everything that we do. We have a business model that aligns shareholder returns with positive outcomes for nature, the climate, and people. So today we're taking a slightly different approach to our presentation. As always, we will review our performance and our strategy. And in addition, today we'll spend a bit more time reminding you of the fundamental strengths of our business, its critical role in the UK power system, and our ability to generate long-term returns for shareholders. I will also underline our commitment to running our business safely, sustainably, and compliantly. Turning to page four. We delivered a strong financial performance in 2023 with a strengthened balance sheet, additional returns to shareholders and the continued development of our strategy. We're delivering for multiple stakeholders. We provided 8% of the UK's renewable power and we play a key role in supporting the UK power system. And we expect that to be true for a long time. We have a strong business today with long-term cash flows underpinning the balance sheet and dividend, as well as opportunities for growth that are aligned with net zero. I want to spend a little bit of time talking about what our business is today. In the UK, we have an important flex-gen business, which is at the center of the UK power system, and which will become more important as the country transitions to a greater renewable power system. The first part of that business is our non-biomass flex-gen and energy supply portfolio. Drax Energy Solutions, Kroken, our hydro business, and ultimately our OCGTs. We're targeting recurring EBITDA of greater than 27 million pounds per annum post-2027 with limited commodity exposure and upside to volatility and higher power prices. The second part of our business is pellet production. While 2023 was a challenging year, we're bullish long-term on the opportunities in that market and are targeting greater than 250 million of EBITDA around and post-2027 for that part of our business as well. And combined, this represents over 500 million pounds of non-biomass generation, recurring earnings, and cash flows post-2027. And of course, in addition to that, we have the biomass power generation at Drax power station, which we expect to generate significant cash flows from contracted positions over the next three years, and then remain critical to the UK system for many years thereafter with the bridging mechanism in place and ultimately with BEX. These activities provide a strong foundation for our balance sheet and dividend growth, both now and in the longterm. And because of this strength during the year, we expect to repay or refinance our 2025 tip maturities during 2024. Flexible generation, biomass, and BECCS form the core of our strategy. We have opportunities to invest over 4 billion pounds by 2030 and to do more beyond that. And our ambition remains for over 20 million tons of carbon removals globally And we continue to target BEX operations in both the UK and the US by 2030. Let me just point out that this is an update to the phasing of our investment program relative to what we set out at last year's Capital Markets Day. So turning to page five, let me walk you through this business which talks about our business today. So first, we have flexible generation and energy supply. Crooken, hydro, ultimately are open cycles. and our energy supply business, all independent of biomass and central to helping manage the UK power system as renewables grow. I want to call out our energy solutions business, which is founded on Drax Energy Solutions, a leading renewable supply company to large industrial and commercial customers, but also includes our renewables and commodities business that was acquired when we acquired Opus Energy in 2016, as well as our growing electrical vehicle charging business. And again, we're targeting post-2027 recurring EBITDA of greater than 250 million from that part of our business. That part of our business has, again, limited commodity exposure and upside to volatility and higher power prices. So the second part of our business is our pellet production. We have greater than 5 million tons of capacity. We operate through four major ports. and we have greater than 17 million tons of third-party contracts in place today. This business gives us exposure to the growing opportunities in sustainable aviation fuels, or SAF, as well as opportunities in BECCS, and both of those segments we expect to have significant need for sustainable wood pellets. This business is also a critical part of our integrated supply chain, which has proved its worth repeatedly over the last several years given the volatility in the market. Third part of our business is our biomass generation or the Drax power station. Again, it's got strong forward power hedges that support firm cash flows. And we expect to see additional value from currently unhedged power generation between 2024 and 2026. And beyond that, significant long-term value once we have the bridging mechanism and then BECCS in place. So combined with our FlexGen business, this is four gigawatts of flexible generation. We are the UK's largest source of flexible generation and 24 seven renewables. And we produce over 20% of the UK's renewable dispatchable power. And again, we have 4 billion pounds of investment options, which I'll talk about more in a minute. And all of this is underpinned by a strong balance sheet, which is strengthening, which Andy will describe. and a dividend that has grown at 11% over the last seven years. So what are the attributes of our flexible generation business? I'm on page six now. So if you look at the map on the left, it's a geographically spread collection of flexible generation assets with pump storage and hydro in Scotland, and ultimately the open cycles across the middle of the country. As you can see in the chart on the top right, today we're delivering more than 300 million pounds. I should say in 2023, we delivered more than 300 million pounds of EBITDA. And Andy will walk you through the details of that. And actually almost if you include the backcasting that we have done, what we expect the open cycles would have done if they had been operating in 2023, the number is almost 400 million. Now, 2023 was a particularly strong year. where we benefited from forward sales of peak off-peak spreads on the pump storage business. And we don't expect that to recur every year. But the development of earnings, as you can see on the chart on the top right, reflects growing system needs associated with system support services. And we've talked a lot about that in the past. And we expect that to be an important feature of this business for the near and the long term. And again, if you look at the earnings over the last three years, and you also include the backcasting of the open cycles, That flex-gen business would have delivered over 800 million of EBITDA over the course of the last three years. It's risen dramatically with power prices, and we expect that to normalize in line with our ambition of greater than 250 million pounds per year. Now, we're going to look at the bottom right-hand side of that chart. The main point you want to make here is we fundamentally deliver value through system support. which is about 60% of that pie, sort of the dark blue in the lower right, right? And then only 15%, the sort of the light blue in the upper right, is delivered through power prices. So fundamentally not exposed to commodity prices, right? This makes us a unique player in the system, critical for UK energy security, and all of this, again, outside of biomass and the associated subsidies. Moving on to page seven, I just wanted to walk you guys through a little bit of the... The history of what we've got in the pump storage and the hydro and the attractiveness that that investment has had for us. So we invested about 700 million pounds when we bought this business from Scottish Power. Over the last five years, it's delivered effectively more than 700 million of adjusted EBITDA. The investment has paid back in five years. And we expect that to deliver very significant returns going forward. Look at the upper right-hand side of that page. Krook & Toon made real progress, or the plans for Krook & Toon made real progress in 2023. We've received our planning consents in Scotland, and we continue to expect FID in 2026 and operations to begin in 2030. That fundamentally would give us another 600 million megawatts, sorry, 600 megawatts of additional capacity on the back of a 600 million pound investment. Finally, on the lower right, more new news. We have a new project to upgrade the Krook'in two of the units, units three and four of Krook'in one, or what is actually operating today. That refurbishment project is about an 80 million pound investment. It will increase the capacity of Krook'in as it is today by about 40 megawatts. So it's two 20 megawatt expansions of two of the existing units. It'll improve reliability and operability. and expect it to actually be delivered over the course of the next three years, i.e. between now and 2027. That investment is underpinned by a 15-year capacity market contract that we received a couple of days ago, and that gives us about $221 million of contracted revenues over the course of that 15-year period. So we expect this to be quite an attractive investment with the potential to deliver greater than 20% post-tax returns. Turning to page eight, let me talk a bit more about our pellet production business and how we get to that 250 million pounds of expected EBITDA. So once we complete the expansion of Aliceville, which is commissioning now, as well as the new plant we're building at Longview in Washington State, we'll have greater than 5 million tons of capacity, which we expect to be able to deliver 5 million tons of production from those assets. Longer term, we're targeting 8 million tons, but we'll only do that when we have visibility on the bridging mechanism in BEX in the UK, as well as on new third-party long-term contracts. And then we're targeting 4 million tons of long-term supply. And that, you know, I'll talk a bit more about this, but we're seeing good opportunities in our existing markets and very interesting new opportunities in the markets for biofuels and sustainable aviation fuels, as well as BEX. So again, just as it is today, integral to our business in two ways. It provides a significant sort of support and great optionality in our vertically integrated supply chain. We expect that to continue to be true through BEX and the bridging mechanism in the UK. And also gives us exposure to what we think is a very attractive and growing biomass market globally. Give you a sense of where that market is going. So first thing I would say is we started supplying a new 500,000 tonne deal into Japan. And as Andy will talk about in more detail, the pricing of that contract is consistent with the pricing that we're expecting to enable us to achieve that 250 million pounds EBITDA number. Second thing is to point out, we signed a letter of intent for the sale of up to a million tons of biomass with a major European utility for several different projects, including biofuels and sustainable aviation fuels. Again, with that, we've announced that. on this letter of intent. We are in active discussions for other biofuels and sap products, both in the US and Europe. We're also in active discussions around supplying BECT projects, both in the US and Europe. So very excited about the growing pipeline we have for third-party sales in the wood pellet space. Again, we're targeting greater than 250 million pounds of EBITDA long-term in this business through a combination of increased production volumes improved margins on legacy third-party contracts, and new sales at attractive market prices in those new markets for SAF and VEX. And then it will take you through more detail on some of the numbers in this section. On page nine, I want to talk you through a little bit what we see in our biomass generation business effectively over the course of the next few years. So we have strong contracted revenues. of greater than 2.8 billion pounds over the next three years, as well as an additional 1.2 billion of associated renewable support. We're fully hedged for 2024 and almost so for 2025. Clearly, in addition to the 2.8 we mentioned, as we roll out our hedge, we would expect to generate significantly more value from generation that will be hedged between now and 2026. We're absolutely confident that the DPS is critical to the UK security of supply and talking a bit more about that. It's the UK's largest source of renewables, as well as being flexible. And at 2.6 gigawatts of capacity, it's about 80% the size of Hinkley Point C, which as we all know is now coming online, not in 2027, but in 2030, or at least that's the current plan. As the economy electrifies more and there are greater demands on power, the UK needs more power, more renewables, more flexible energy systems, and more ways to remove carbon from the atmosphere. The Drax power station with BEX can help the government meet its ambitious targets for greenhouse gas removals. All these factors underpin our expectation of long-term value from a bridging mechanism and also from BEX. So on page 10, the final page of this first section, we have very attractive opportunities for growth, as I mentioned, that are again consistent with the world's objective of achieving net zero. But our ambitions remain the same. To be a global leader in VEX, to be a global leader in sustainable pellets, and to be a UK leader in flexible dispatchable power. Now, over the last few months, we've been looking at our portfolio, how we expect the timing to play out, as well as the UK government's program. And I just want to make clear how our timing and our phasing looks as a result of that, sort of looking at those things and how they've changed. So first, in terms of BECCS, we still have an objective of doing ultimately 20 million tons. We still expect one unit in the UK by 2030 and one unit in the US by 2030. And all of those, of course, depend upon getting them right government support in place, as well as indoor PPAs for power and carbon, which is the main form of support for the U.S. business. In terms of flexible generation, we've got the open cycles coming online this year. We've got the Krookin 1 and 2 expansion by 2027, and we've got Krookin 2 by 2030. And again, a big step forward. Last year was the announcement of the cap and floor sort of minded to position from the government on that. So again, we are Very excited about the opportunities to invest there. And finally, in pellets, we're looking to grow to 8 million tons when we have clarity on future on the bridge, on BEX, and on future long-term supply. So with that, I'll turn it over to Andy for the financial and operational review.

Thank you, Will. And good morning, everybody. So starting with the financial summary on slide 12. We've delivered strong financial performance with a strengthened balance sheet and additional returns to shareholders. Our adjusted EBITDA excluding EGL of just over 1.2 billion grew 66% over the prior period. If you include EGL of 205 million, adjusted EBITDA grew 38% to just over 1 billion. And of that 1 billion, approaching 40% was delivered by our FlexGen, and energy supply portfolio and pellet production. We've generated 1.1 billion of cash from operations in the period. That includes a collateral inflow of 155 million. And in 2022, we delivered 320 million, but after a collateral outflow of 400 million. So if you exclude collateral movements, our cash conversion rate's been 95 to 99%. in those two years. So it's a very strong cash conversion. These future earnings and our cash flows provide a strong foundation for maintaining our credit rating, investment in our core business and strategy, and growing and sustainable returns to our shareholders. The board's proposed a final dividend of 13.9 pence per share, bringing the full year dividend to 23.1 pence. It's a year-on-year increase of 10%. Our leverage is reduced further to 1.1 times based on adjusted EBITDA, including the EGL, and we're making good progress with refinancing activities. We expect to repay our 2025 debt maturities through cash generation and refinancing in 2024. So moving on to slide 13, the high quality asset base. I'll spend most of my time on this slide to talk through the strong financial performance in 2023 and highlight the strength of future earnings and cash flows from our existing high quality assets. So the total column on the right shows a breakdown at 23 performance consistent with prior periods and all the normal year on year bridges are included in the appendices. So starting with the first column, FlexGen and energy solutions. The continued strong performance of our pump storage and hydro operations delivered another year of growth, with adjusted EBITDA of 230 million, a 35% increase from 171 in the prior year. The primary driver of this significant increase was a high level of activity at Kruken, which delivered system support services and higher volumes of power generation. The location, flexibility, and range of services that Kruken can provide makes it strategically important to the UK power system. National Grid system support service data shows significant growth in the value of system support services over recent years, and this is a trend that we expect will continue. This week, we secured a 15-year capacity market agreement for a refurbishment of Krookhan units three and four, but we'll see the capacity of those units increase to 240 megawatts. We expect capex of around 80 million pounds and capacity market income of over 220 million pounds underpinning strong double digit returns. So next profitability in our customers business improved significantly with adjusted EBITDA of 72 million up from 26 million in the prior year. This reflected a strong performance from our INC business where volumes of power sold have grown 7% to almost 16 terawatt hours as we continue to expand our high quality INC customer base. This growth in earnings was supported by increased power prices with consistent margins and lower balancing costs as well as significant earnings from our renewable PPA portfolio. The customer's business purchases Regos from our generation business and it makes an appropriate margin. In 2023, it benefited from increased Rego income. We see further opportunity for growth in energy services. And in September, we acquired BMM Energy Solutions, an installer of EV charge points. The acquisition strengthens our end-to-end EV charging proposition as part of our commitment to support customers in achieving their net zero ambitions. The renewables PPA portfolio that was acquired with Opus is now being managed as part of our IMC business. And during the year, we reallocated 145 million of goodwill to reflect this change. That's supported by strong future cash flows. As previously announced, we stopped new gas supply sales in Opus with a significant year on year reduction in the supply volumes through a carefully managed off boarding process. So following the transfer of the PPA portfolio and the exit from gas supply, We recorded a £69 million non-cash impairment in Opus, and this is shown as an exceptional charge. In total, during 2023, our existing FlexGen assets delivered £302 million of adjusted EBITDA. Over 80% of those earnings relate to capacity market payments, system support, renewables and energy services. That means less than 20% came from power. Construction of our three new Build OCGTs continues, and these assets can play an important system support role, providing combined capacity of around 900 megawatts, and will earn £275 million from a 15-year capacity market agreement that commences in Q4 of this year. In addition, they'll earn income from peak power generation and system support services. We continue to assess options for these assets that includes a potential sale. However, an exercise to backcast the value of the OCGTs over the last three years shows that on average, they would have contributed adjusted EBITDA of greater than £17 million each year. So illustrative earnings for 23 increased to over £372 million if you include the average three-year backcast earnings for the OCGTs. and they'd increase further still if you include the expected income from the Krookum 3 and 4 refurbishment project. We are targeting post-2027 recurring adjusted EBITDA for flex-gen and energy supply of over £250 million. In slide 27 in the appendices, you'll see details of already secured capacity market payments for this portfolio in the period until 2042. They total around 600 million pounds. This grows to 850 million if you use an illustrative 35 pound kilowatt clearing price for future auctions across the period. And these values are in 2023 money and subject to indexation with UK CPI. So moving on to the second column and pellet production. 2023 was a challenging year for our pellets business. In the prior year, we delivered 134 million of EBITDA from 3.9 million tonnes of production. That equates to around £35 of EBITDA margin per tonne. In 2023, this reduced to 89 million of EBITDA from 3.8 million tonnes, or just under £25 of EBITDA margin per tonne. We began the year anticipating increased production benefiting from the full year impact of plants that were commissioning during the 2022. However, during the year volumes were negatively impacted by a higher than planned level of downtime, as well as wildfires and port strikes in Canada and hurricane damage at the port of Baton Rouge. As a consequence, we incurred additional costs, primarily higher repairs and maintenance costs, and the fixed cost per tonne also increased Further, 2023 saw higher volume of shipments to lower value legacy contracts. Most of these contracts were signed when market prices were lower, and while price escalations do apply, cost inflation has squeezed margins. As these contracts come up for renewal, we expect to expand the EBITDA margin. With improved output from our existing plants, and around 600,000 tonnes of new capacity from Longview and Aliceville expansion projects, we believe that future production can reach around 5 million tonnes. Market forecasts show significant growth in demand as markets such as BEX and SAF begin to accelerate, and we believe our pellets have increasing value. In summary, we are targeting post-2027 recurring EBITDA of over £250 million, per annum based on around 5 million tonnes of production and an improved EBITDA margin per tonne. Grax has around 20 years experience in biomass and a robust and diversified global supply chain which provides a firm operational foundation from which we can deliver these plans. Moving on to the third column and biomass generation. Adjusted EBITDA grew 34% to 703 million, and that's after EGL of 182 million. Biomass availability of 90% improved from 87% in the prior period, but reflected two major planned outages in the year versus one in the prior year, the generation volume spelled to around 11 and a half terawatt hours. Our RO units are fully hedged for 2024 and almost fully hedged for 2025 with over 20 terawatt hours locked in at attractive prices over the two years. We expect the CFD unit will run at a high load factor for the coming years, subject to securing the biomass. And we also anticipate additional longer term value from the bridging mechanism and VEX. Across these existing assets, we continue to see two billion pounds of free cash flow in the period until 2031. We're defining free cash flow as adjusted EBITDA, less maintenance capex, including the balance of OCGT investments, interest tax, EGL, and notably a growing and sustainable dividend throughout. So turning to slide 14 on the balance sheet. We maintain a strong focus on cash flow discipline and maintaining a robust balance sheet. Our available cash and committed undrawn facilities at the end of the year of $639 million provide substantial headroom over our short-term liquidity requirements. In January, we agreed a one-year extension to our $300 million revolving credit facility, which provides further committed liquidity out to 2026. No cash has been drawn on this facility since inception. During 2023, we put in place a liquidity facility to manage the working capital associated with power trading. And at the end of the year, 120 million was drawn. As we see further collateral unwinds during the year, we expect to repay this in full during 2024. At the end of the year, net debt of 1.1 billion represents a leverage ratio of 1.1 times based on adjusted EBITDA included EGL. That's a reduction from 1.6 times in 2022. We're making good progress with financing activities, reaffirming that their strong appetite for Drax credit. In November, we agreed an extension with existing lenders of our CAD ESG linked term loan, extending it from 2024 to 26, whilst reducing the value to 200 million Canadian dollars. In January, we repaid 144 million of the UK infrastructure term loans out of surplus cash with maturity dates in 2024. In February, we closed on a 258 million term loan on competitive terms with a group of six banks. One tranche of the loan totaling 165 million matures in 27 and has the option to extend two years. And the second tranche totaling 93 million matures in 2029. And we will use these funds to repay the 2025 bond maturities. Both Fitch and S&P have affirmed our corporate credit as BBB plus stable. We also have a BBB minus stable investment grade corporate rating from DBRS. The quality of the group's assets, earnings and cash flows provide a strong platform from which to execute our strategy. We've sought as much flexibility as possible within the capital structure. And this year, all the group's debt is repayable at little to no cost. Moving on to slide 15, capital investments. We expect capex to be in the range of 410 to 450 million for 2024. Our maintenance capex of 100 million for 2024 is lower than in 2023. primarily reflects one major planned biomass outage compared to two in 2023 and as noted earlier the completion of a number of significant capital projects and pellets during 2023 following the unplanned downtime. Growth and enhancement capex is expected to be around 290 million. We expect to commission our three OCGT projects in the second half of the year with capex in the year of around 90 million. Construction of our Longview pellet plant continues throughout 24 with capex in the region of 150 million. And in respect to the Crookham 3 and 4 refurbishment project, we expect to spend around 30 million of capex this year. As Will outlined, we continue to have positive engagement with the UK government on BEX at Drax Power Station. We're carefully managing further investment pending additional clarity on the project. And finally, to note that we are not yet capitalising any costs in respect to the potential investment in the expansion at Krugan, for which we've recently received planning consent. So moving on to slide 25 and capital allocation. Our capital allocation policy, which was launched in 2017, remains unchanged. Strong financial performance and cash generation is supportive of maintaining our credit rating, paying a growing and sustainable dividend, It also positions us well to invest in our core business and progress our strategic plans. With 1.1 billion of cash generated from operations, we increased returns to shareholders to 236 million in the year, inclusive of a buyback of 150 million. Our policy to pay a growing and sustainable dividend, and over the last seven years since the policy commenced, dividend growth has averaged around 11%. The fourth leg of our policy is to return surplus capital to shareholders. And we consider several factors in this regard, including upcoming debt maturities, the quantum and timing of our capital deployment, any dilutions of share capital for employee share incentives, and any inflows from the divestiture of non-core assets. And with that, I'm back to him. Thank you, Andy.

And I want to spend a few minutes now talking about safety, compliance and sustainability, which are sort of critical factors for our business. And we recognize the importance of those. And we also recognize the opportunities we have to continue developing and improving our systems in those areas. First on page 18, let me talk about safety. The safety of our people is always critical. Our safety performance is assessed against both a leading indicator and a lagging indicator. The leading indicator is the near-miss and hazard identification rate, which is measured primarily based on the number of environmental safety and process safety observations across all of our operations and all of our locations. And the purpose of that is intended to embed a positive reporting culture that we've sought to introduce across the group. And when we actually see our scorecard, you'll see that actually our performance in that area has been strong in 2023. The lagging indicator is the total recordable incident rate, which is displayed on the left-hand side of the page. We improved our performance in that area relative to 2022, but it's still not as good as it needs to be. So fundamentally, we are reinforcing the need to be safe and the need for all colleagues to pay attention to safety, and we're looking to improve our performance in that area in 2024. Turning to page 19. a little bit of an update on regulation and compliance. I wanted to just comment on the National Audit Office review of the government's biomass strategy. Just really a couple of points there. First is that the review can recognize and reiterated the importance of biomass for the government's future energy strategy. It also outlined opportunities to improve and develop assurance and standards consistent with statements that have been made by the UK government. And we will work, as we have been, with governments, as is appropriate, to continue to help improvements in those areas which we fully support. Secondly, on the right-hand side, a couple of thoughts on Ofgem. First, I just wanted to make sure everyone was aware that we are audited on our biomass sustainability every year. The latest audit was in May of last year, and that assesses our compliance with the Renewables Obligation Scheme, and in that audit, we received a quote, good rating, which is the highest available rating. And again, please rest assured that that's absolutely critical for us, and we spend a lot of time and effort making sure that that goes well. The biomass profiling data investigation with Ofgem is continuing, as you know, and we are continuing to work closely with them. And again, two points there. There's nothing really to update, but I want to make sure people are aware that is not about sustainability. That is about the profiling data that we provide the government alongside. A few words on sustainability and how we're continuing to develop our capabilities in that area. So sustainability is absolutely a key enabler for the group, right? Both for our activities today and also for our future strategy. And through the course of 2023, we will continue to progress and improve our reporting and our disclosure. So we have achieved compliance with TCFD reporting requirements. We have a pilot on TNFD that's been completed. And we've actually had approval from SBTI of our own science-based targets. There's a lot more detail on all these points in our annual report and accounts. And again, recognize that these activities are fundamentally critical to our success as a group. And we also recognize that there's always more work to be done, and we continue to do that. In that spirit, during 2023, we worked with the environmentalist Jonathan Port and the organization Forum for the Future. We asked them to advise us on the conditions necessary for BECCS to be delivered successfully for all stakeholders. And they set out in their report 30 conditions that they think are important. And we've reported back on most of these, with which we generally agree. And we will be reporting back on the remaining conditions over the course of the next few weeks. So recognizing the progress we have made with our reporting and disclosure, we have seen an improvement in our CDPR carbon disclosure project carbon rating from B to A. But again, we are still working on that and there's always more to be done. The final section is a few words just to update where we are in our strategy. And I'll start with what's happening in the UK, the Drax power station on both bridging and non-BACs. just to review some of the key things that happened during 2023 and what we expect to happen during 2024. So the first thing to highlight is that the government reiterated, I would say, or pulled together really for the first time, a comprehensive statement of its biomass strategy, and they did that in August. And for me, it's quite important to recognize that that strategy has not changed in a long time. Biomass has been central to the UK strategy consistently, as long as I've been at TRACS, and much longer than that. But it was great to see that all confirmed and reiterated in one place in the biomass strategy. Subsequent to that, in December, they announced a sort of position on the BEX business model, a consultation on the BEX business model, as well as an update on the CCS project, sort of process, and track one extension and track two. Again, good progress on CCS. In January, we received approval for our BEX project at Drax Power Station, we received our DCO. Again, very excited about having that. It's also quite important to recognize that the Secretary of State used very clear language in that document, so reiterating the importance of BEX to the UK's net zero objectives, and also the importance of greenhouse gas removals. And all of that is very much, all of what I've said so far, completely aligns with our 2030 objective for having BEX online at the Drax Power Station by that point in time. Now, there have been traditional reviews launched against both the DCO and the biomass strategy, as I think everybody knows. Those are as we would have expected, and we don't think that they will impact the critical path for our project. Final point about what's happened so far is that the consultation on the bridging mechanism was launched earlier this year. It actually completes today. Again, we're very pleased with the sort of the speed with which that's taken place. The government clearly, I think, recognizes the importance of a timely conclusion to that process. We're in very in-depth bilateral discussions, very much data based around how that might work for us. And again, those discussions, I would say, are going well. So what do we expect to happen in 2024? I think three things point to. One is we would expect the bridging mechanism discussions to actually to be completed and a bridging mechanism to be agreed with the government by the end of the year. Clearly, there will be elections that has the potential to impact the timelines, so I would be foolish to promise something. But again, we absolutely recognize that DESNES and the government is very intent upon working with us to get to a rapid conclusion of that process. The second thing we would expect is we'd expect to be chosen as either a Track 1 expansion or a Track 2 project during 2024, which allows us to keep moving forward in 2025. The discussion negotiates specifics around our Power of X project in that year. In order for that to be true, we also expect the Power of X business model to make significant progress during 2024. And the final point I would make is that there's going to be significant activity around transport and storage infrastructure, both on track one expansion and track two. And we expect to see real progress in those areas this year. So again, if you're sort of looking backwards, it would have been great to have been chosen as a track one project as the Green Day, which we weren't, but the activity and the progress we've made on the new approach, which I've just laid out, we are extremely pleased with how that's going and how that's going and look forward to including many of those steps in 2024. Green Day 23, just a couple points I wanted to highlight on the with clear importance of the Drax power station. The chart on the left really highlights how important the Drax power station is to energy security in the UK. So the pink shaded area shows the expected peak demand as per National Grid's future energy scenario. So clearly expected to rise as the economy electrifies as part of the whole process of trying to tackle climate change. The blue bars show the expected level of existing derated capacity, less expected retirements, and clearly there's going to be significant declines. And then we've showed the Drax power station the importance of that to the current capacity in the hatched areas. So there will be new capacity, but there's the potential for lots of delays in that area. And so I think it's very clear to us, and I think clear to many, that the Drax power station is going to be absolutely critical to energy security in the UK well through the 2030s. And then the couple of comments on the right really come from a study that we commissioned from Moringa about why we think BEXA-DRAX is a value-for-money option for the UK economy. So first, it's the only credible option for near-term large-scale carbon removals to enable the UK to meet its target of 5 million tonnes of greenhouse gas removals by 2030. And we've looked at, you know, What is the economic benefit of doing that relative to other decarbonization options? And the Beringa report expects us, the country, to save about 15 billion pounds relative to the next best alternative, which is equivalent to 25 pounds per household per year for 20 years. Again, important for security of supply, good value for money for decarbonization options, and the drive power station has got a very attractive future. Turning to global BECCS, just a brief update on what's happening there, really. The key things that we've done there, we continue to move forward with our first sites. We expect that to get into a feed study during the course of this year. You will have seen that we've signed some agreements for some options on fiber. So fiber, transport and storage, site location, all moving in a very positive way over the course of 2023, and we expect that to continue through 2024. We're setting up the infrastructure and the team for global banks growth. We've got a headquarters for that business now in Houston, Texas. We've added, we've appointed a president, Lori Fitzmaurice, who joined us in January, early February, and she's been a fabulous addition to the team already, hit the ground running. So great to welcome Lori. And we're, again, targeting FID in 2026, as well as being online in 2030. Turning to page 25 and an overview or conclusion. So again, we had a strong financial year in 2023, delivering strong returns for shareholders, delivering a strengthened balance sheet, and continuing to develop our strategy. Delivering for all stakeholders is a key part of the UK power system, and we expect that to be true for many years. And I think we've highlighted, we have a very strong and attractive cash generator business today with long-term cash flows underpins the balance sheet, as well as the opportunities for growth that we have that are again aligned very much with net zero. That consists of the FlexGen business in the UK, which sits at the center of the UK power system. And again, which we expect to become more important as we transition to greater levels of renewable power generation. We're targeting recurring EBITDA of greater than 25 million random through the 2030s from our non-BioMax flex-gen and energy supply business, as we've mentioned. And we're also targeting greater than 250 million pounds of EBITDA over the same period from our pellet business. As we see attractive opportunities in SAF and in VEX, as well as an opportunity to continue improving the profitability of our current business. Finally, biomass power generation at the Drax power station, we expect that to generate significant cash flows from contracted positions over the next three years. and remain critical to the system for a long time. All of these activities provide a strong foundation for our balance sheet, for the growth in our dividend, and for our ability to invest in the attractive opportunities we have across our strategy in biomass, specs, and flexible generation. So thank you very much for your time, and Andy and I are very much open to questions that you might have.