National Grid plc

Good afternoon, everyone, and welcome. Thank you to those of you joining us in the room and online. I've been really looking forward to presenting to you today. As Chief Executive, my ambition is clear, to build on National Grid's strong foundations, sharpen execution, and advance us as a world-class business. Strong execution is the foundation of confidence for customers, regulators, governments, and investors. And we must continue to transform our business as the external environment changes at pace. Let me start with our full year results. These strong results demonstrate the momentum we're building. We delivered a step up in capital investment of more than 20% to £11.6 billion, driving asset growth of 10.9%. Underlying operating profit increased to £5.7 billion, reflecting strong operational delivery. This supported 8% growth in underlying earnings per share at constant currency in line with our guidance. We also grew our dividend per share by 3.8% in line with UK CPIH inflation. These results show we are delivering on our commitments. They also provide the reference point for the observations I've made since arriving and the strategic priorities we're now driving forward. Since becoming Chief Executive last autumn, I've spent significant time across our UK and US operations and with colleagues at every level of the organisation. I've engaged to listen and learn and to reinforce that safety remains one of our foundational values. These conversations will ensure that whatever changes we make are grounded in today's realities and informed by broad input. I've also spent time with our external stakeholders, consumers, customers, suppliers, strategic partners, and with many of you. I've invested significant time with regulators and governments on both sides of the Atlantic. It's through working together that we can navigate the trade-offs between affordability, security of supply, resilience, and sustainability. All of this underscores to me that National Grid has strong foundations and is differentiated from our peers. Our portfolio is well diversified across geographies, regulatory frameworks and energy mix. We have clear visibility on investment and growth, deep engineering capability and regulatory expertise. Our colleagues understand the critical role we play in the energy system and they take that responsibility seriously. These strengths underpin our long-standing track record as one of the most reliable and resilient companies in the sector. My focus now is ensuring the way we work reflects the scale, complexity and opportunities ahead. I'm guided by what has served me well throughout my career, a belief that every organisation can and must improve its performance. As a first step, I strengthened the executive leadership team and took actions to improve decision making and clarifying accountabilities. This has included creating a new growth forum to provide more effective challenge on capital and bringing together the T3 capital execution under one team. From there, I've mobilized the organization. We've brought together our senior leaders and top talent to rigorously test our ambition against not just best-in-class peers, but also industries and other world-class leaders. This work focused on identifying the levers We've also moved quickly to enhance delivery through specific actions, like streamlining our governance processes and deepening our performance rigour. These early quick wins were targeted at improving ways of working and reinforcing a more dynamic, action-orientated culture. We're a large company, 33,000 strong, and so I am realistic that agility is not built in a day. This work has culminated in a refreshed strategic framework, now rolled out across the business to sharpen focus and to support consistent execution. This is not a change in direction, but instead provides a coherent structure under which we are unifying our efforts. This progress gave Andy and I the confidence to set out our updated five-year framework in March. We'll invest at least £70 billion, our largest ever capital investment program, supporting annual asset growth of 10%, upgrading our underlying EPS growth of 8% to 10%, and our progressive dividend offerings. Before I walk through our strategic framework, it's worth stepping back to look at the market forces reshaping our industry and the opportunity that drew me to National Grid. We're operating in an energy system that is fundamentally changing. The drivers of that change are interconnected, reinforcing one another, and unfolding at different speeds. Taken together, they create powerful tailwinds for our business. At the heart of this shift, is a shift in supply mix. In the UK, a key driver today is the change in generation mix. Our role is to connect 35 gigawatts of new generation to our transmission network in the next five years alone. The sheer magnitude of it, transforming a legacy grid that flows north to south into a mesh that connects massive wind farms, distributed generation, and battery resources. It's an enormous feat. In the US, we have a different picture. Continued investment is vital for ensuring reliability across our networks, whilst demand is growing rapidly due to reshoring and data centre demand. The scale of work underway in our upstate New York transmission assets is emblematic of how the system is evolving. Natural gas also remains an important part of the energy mix for resilience and affordability, which underscores the criticality of our gas system. Demand is also evolving across our jurisdictions and will lead to a second wave of growth. AI and electrification are driving a step change in power demand. New large load customers like data centres and industrials want connection solutions that are faster, more certain and resilient, which is changing the competitive landscape. In the UK, we are ready to connect 19 gigawatts of new demand over the next five years, representing a four-fold increase compared to the previous price control period. In the US, peak demand is projected to rise by more than 15% by 2029, requiring grid expansion to be delivered around five times faster than in the past two decades. So what does this all mean? Customer expectations for reliability, security of supply, and system performance are rising. and in periods of greater geopolitical volatility, this is further amplified. Taken together, these structural shifts are expected to drive substantial growth in electricity demand across our markets over the next decade. Gas demand is expected to remain broadly stable, but investment remains essential to reliably meet periods of peak demand. Affordability is a defining challenge for the whole system. Our role is to deliver well-planned, well-executed network investments that lower costs across the system. So our opportunity is defined by the visibility of the growth that we have and what is likely to emerge. It's an opportunity underpinned by powerful long-term tailwinds driven by structural market growth. In all scenarios, grids will be at the centre of these trends, enabling the most efficient market formations. And the critical question, which I'll come to next, is how we translate these tailwinds into disciplined delivery and sustainable value. That market context is exactly why we've refreshed our strategic framework, to sharpen our focus on the actions that create value today, while positioning National Grid to capture the growth ahead. Starting first with our mission, we bring energy to power possibilities. Our job is to unlock the full range of possibilities that energy can drive. That mission is grounded in our values, which have not changed. Doing the right thing, make it happen, and find a better way. These values are not separate from the strategy, they are how we deliver it. From there, the framework has two core components, the brilliant basics and the big shift. The Brilliant Basics are the foundations of our business, where we're focused on delivering world-class performance. This is where the overwhelming majority of our organisation is focused. Calling them basics doesn't mean they're simple, nor static. Quite the opposite. These areas require relentless improvement, disciplined execution, and the thoughtful deployment of proven technology. Done well, this continuous improvement compounds into a step change in performance. Capital is about best-in-class delivery of our largest ever investment program. This is non-negotiable and central to our value creation story. It requires industry-leading capability in planning, assurance, supply chain readiness, and execution discipline. Across our assets, it's about getting the very best from the existing capital employed, improving reliability and resilience, extending asset life, and using data and insights to optimize performance and investment over time. And for customers, it's about providing consistently strong experiences from reliability and service through to faster, more predictable connections and transparent, proactive communication. And in our functions, the priority is to enhance control and oversight while reducing friction in how we operate. So the organisation can move with greater pace and clarity. These brilliant basics de-risk the plan in front of us. But the market forces I described earlier require more than incremental improvement. They also require us to transform how we lead, how we innovate and how we shape our external environment. They require three big shifts. The first is leadership, people and our performance culture. Delivering our strategy at pace requires absolute clarity of accountability, stronger performance management and investment in leadership. That's why we've aligned organisational performance management to our new strategic framework, running a red thread from our business objectives all the way through to individual goals. The second is technology and innovation. The complexity of the energy system we're building cannot be managed in traditional ways. We must use technology, including digital, data and AI, much more systematically. This will enable us to improve productivity, get more out of our networks, accelerate delivery and improve customer experience. We have a number of examples of this across our business and we'll cover those shortly. The third is external positioning and policy advocacy. As system needs evolve, existing policy and regulatory frameworks must too. We will be deliberate in shaping outcomes that support affordability, resilience and growth. That means prioritising where we engage, taking clearer positions and building coalitions to shape the debate on both sides of the Atlantic. A good example of this is the regulatory engagement we're currently undertaking on ED3. As we seek to get the right blend of investment and flexibility to deliver affordable solutions. So put simply, the brilliant basics de-risks today's plans, the big shifts position National Grid to lead the next phase of the energy evolution. And executing this will enable us to build a platform for exploring longer-term growth opportunities over time. But let me first bring our delivery to life by covering our five-year plans in both the UK and the US. Starting with the UK, where we have clear visibility over the largest ever investment program, which is driving a step change in growth over the next five years. As the biggest FTSE listed investor in the UK, we are driving economic growth. Both the scale and long-term visibility of our investment and the network capacity we create. We plan to invest around £40 billion across our UK regulated businesses, reflecting both the magnitude of the energy transition and the critical role infrastructure plays in enabling it. We're reshaping the backbone of the UK energy system, nearly doubling the amount of power that can flow across the network. Across transmission and distribution, we're building major new substations and delivering around 7,500 kilometres of new or upgraded network infrastructure. Equivalent to the distance from London to New York and halfway back again. It also means building the workforce to deliver it, where over the next five years, we expect to recruit around 6,000 full-time employees in the UK, in which 2,000 will be graduates and apprentices. And of course, there's also a multiplier effect in our investment across our contractors, supply chain, and into the broader economy. Much of this investment is already underpinned by clear and stable regulatory frameworks. Rio T3 gives us the mandate and visibility to invest at scale in transmission, and in distribution we are now engaging on ED3, where the direction of travel provides confidence in our growth. The focus in our investment is very clear, enabling a fundamental shift in how the system operates. In transmission, we expect to invest around £31 billion, A 150% increase over our previous five-year investment, including connecting up to 35 gigawatts of generation and 19 gigawatts of new demand. In distribution, we're investing around £9 billion to build more flexible, intelligent networks, enabling electric vehicles, heat pumps, distributed generation and new demand, all while maintaining reliability and performance at the local level. This translates into UK regulated asset value growth of more than 60% over the next five years to over £60 billion, creating a strong platform for sustained earnings growth. Alongside our onshore regulated networks, our 7.8 gigawatts of interconnection portfolio is the largest in the world. It plays a critical role in linking the UK to neighbouring European markets. which is improving security of supply, enabling the two-way flow of lower-cost energy and supporting resilience. So the UK opportunity is clear. Well-established regulatory frameworks delivering a step change in both supply and demand connectivity and building long-term value for all stakeholders. Turning now to the US, where we see a different but equally compelling growth story. We plan to invest around £29 billion across our New York and New England businesses over the next five years. This reflects both the size of the opportunity and the regulatory construct we operate within. Our regular rate-based cycle is typically every three to five years. This provides us clear visibility on our investment plans and allows us to adapt to evolving system needs, policy and regulatory priorities, and emerging growth opportunities. In New York, we expect to invest around £17 billion over the next five years, around 30% higher than the previous period. And in New England, around £12 billion, an increase of approximately 50%. This step up is driven by ongoing investment to maintain our resilience across gas and electric, as well as increased demand connections with expected demand growth at around three times previous levels. But it's not just about data-intensive load growth. The planned micron chip fabrication facility in central New York is a good example of the US commitment to reshoring manufacturing. So the underlying fundamentals of the US Northeast are very encouraging for future investment. At the same time, we're strengthening and modernizing our networks across both electricity and gas. In electricity, this includes transmission upgrades, new connections, and accelerating the deployment of smart meters. In gas, our local distribution businesses continue to play a critical role in system resilience, safety and in affordability, which is supported by our ongoing investment in pipeline replacement and network modernisation. And as in the UK, our investment translates into clear long-term value creation. Across our US businesses, we expect to grow our regulated asset base by around 50% over the next five years to more than £45 billion. So the US story is one of scale, resilience and growth in every part of our business, with a portfolio that's well positioned to deliver sustainable value over the long term. So if that is the scale of the opportunity and the growth ahead, let me now explain what makes me confident in our delivery. There's already good progress in our capital portfolio today, with key projects well underway on both sides of the Atlantic. We have two-thirds of our £70 billion investment covered by regulatory agreements and delivering mechanisms secured for three-quarters of it, including 100% of the primary supply chain for our ACTI projects. In the last six months, we've contracted £2.5 billion for the Eastern Greenlink 3 and 4 cable and converters and a further £1 billion on Phase 2 of our CLCPA program in New York. Our assets continue to deliver world-class reliability and resilience. including 99.99999 reliability in our UK transmission business. While in Massachusetts, we now have 34% of customers covered by Thrissa. That's a self-healing network technology that restores customer power within a couple of minutes of an outage. Over the last six months, customers in Massachusetts have in aggregate avoided more than 15 million minutes of power outages because of this technology. We're also using advanced satellite and AI-based vegetation management tools to help reduce outages proactively as well. Both of these initiatives are allowing us to demonstrate the significant value of our investments in prevention rather than response, which enhances our resiliency and ensures that our reliability is critical as we engage on future rate cases. And for the third consecutive year, we received awards from the Edison Electric Institute for our storm response. And I'm not surprised by this when I see the dedication of our teams doing everything they can to restore customers quickly during the most challenging periods. We're also using advanced technology in our customer processes. For example, by migrating to a new contact center digital platform in the U.S., we've consolidated millions of call interactions across fragmented systems into a single cloud platform. And finally, underpinning all of this, we have a solid operational backbone in our functions. Our core processes, systems, and teams provide strong controls while supporting the business in consistent delivery. So it's from here that we are now focusing on how we go further, sharpening performance And there are two key areas that we focused on. Our new Capital Control Tower is already delivering benefits in the early stages of project development, using agentic capabilities to assess optioneering and documentation at each stage gate. It gives project managers real-time feedback, enhancing regulatory recovery and allowing them to adjust early, before changes become more costly when in construction. When you've delivered as many projects as we have, there are inevitable learnings along the way, and the Control Tower is making those lessons available much faster to leaders across all of our projects, from large to small, informing our full £70 billion plan and giving us confidence in its robustness. We're also capturing synergies across our portfolio. For example, bringing together ASCII and non-ASCII delivery from UK electricity transmission into a centralised delivery function. This is improving supply chain coordination, optimising scheduling and accelerating our learnings as we build world-class capability in systems. Secondly, capital optimisation. AI will also help generate robust project plans and test thousands of delivery scenarios. It'll help us to plan system access outages, continuously optimising schedules as conditions evolve across the portfolio, not just on individual projects. This means we can deliver better integrated decisions and drive faster, more predictable and lower cost delivery. System access outages are increasingly difficult to secure and being able to optimise our access needs is essential. Another key lever is standardisation. By using more consistent equipment and designs, we can reduce engineering cycle times, simplify procurement, and lower unit costs. We've standardized our HVDC cable designs, aligning with European standards to make procurement faster and give us access to a wider range of suppliers. We're also moving to fewer substation designs and enabling more modularization of our equipment. Taking together these actions strengthen our resilience to cost pressures and position us to outperform against our regulatory incentives. Turning next to our assets, where our focus is on improving maintenance and operations and unlocking more of the latent design capacity of our assets. One early focus is our frontline field operations, where there's a clear opportunity to improve productivity through technology, better use of data, and more effective management. As a case study in our New York gas business, we've piloted a set of operational improvements. First, reducing the administrative burden on supervisors, simplifying processes and using AI to free up their time so they can focus on driving performance and removing obstacles in the field. Second, improving planning and scheduling, ensuring crews are deployed more effectively, using analytics and AI to optimize routes and increase utilization. This has improved productivity through a 30% reduction in crew travel time. And finally, strengthening performance management using clearer, more integrated metrics to give real-time visibility to productivity. Across our networks, we see opportunities to mature our asset management capabilities. We will drive greater performance through better intelligence using technology to manage risks and implement consistent standards. This drives value on several fronts. It allows us to sustain our industry-leading reliability as the system becomes more complex, and at the same time, improves productivity to reduce costs to serve. In terms of our customers, we're committed to improving our response to their rapidly evolving expectations. We're now serving a broader and more diverse range of customers than ever before, from households through to large industrial and technology customers, Each with very different needs. So our focus is on how we evolve our offering to meet those needs with more speed and transparency. In the US, we've rolled out advanced smart meters for over 2 million of our customers. By combining these with a market-leading digital customer platform, we'll deliver a step change in customer service. This gives customers the tools to understand and manage consumption, It gives us powerful real-time data on exactly how energy is being used. This allows us to both use our networks more flexibly and save customers money. Alongside that, we're modernizing our contact centers using new platforms and digital tools to improve first call resolution, reduce wait times, and lower the cost to serve. And we are already seeing the results with an 18% increase in our article customer satisfaction scores across our U.S. contact centers over the past year. We're also improving how we connect and partner with our customers, particularly as demand grows and becomes more complex. This is especially true for large loads and data centers and industrial customers, as well as generators, where expectations on timing, certainty, and engagement are fundamentally different. Over recent months, we've increased our direct engagement with these customers to better understand their needs and their frustrations. This has reinforced the importance of pace, clarity and predictability in how we operate. In response, we're clarifying and elevating ownership of our customer relationships, as well as continuing to focus on reducing the time to connect. The Connections Reform Program in the UK is an important opportunity for the industry and we're fully committed to playing a leading role in improving how it works for customers. So this is about evolving our model from a one-size-fits-all approach to a more responsive service that better meets the needs of different customer groups. And to bring to life what we're doing across capital, asset and customer, we have a short video to share with you. Thank you.

We're taking every single project that we have now and going back and challenging the way it's been designed, engineered and constructed so that we can really look to drive efficiencies and drive out costs in every single project. A good example of this is the Great Grid Partnership, where our partners there are now going back and working through our design. By bringing the ASTI and the non-ASTI projects together, we have one division that is now responsible for delivering all of the projects in our T3 plan. That allows us to leverage our supply chain in a much more efficient way and it allows us to bring standardization and innovation across our whole project portfolio in the UK. We've come up with a way to modularize and standardize our substation designs such that we have a repeatable platform and we can build substations from a limited number of design functions much much faster than we've done in the past.

The AI-enabled Capital Control Tower is part of a broader initiative that we've been working on in New England to look at how we can most effectively deliver per capita. It's a very manual process today. We've been thinking about how do we scale it across the company. Imagine if we all run it through the same AI tool and allow that tool to learn from groups across the company. You're now sharing lessons learned at the drop of a hat.