Creating Value in a Sustainable Way

Full-year Results Statement (2017/18)

SSE’s financial highlights for the year to 31 March 2018 are set out below and are in line with its Notification of Closed Period statement of 29 March 2018, with adjusted earnings per share ahead of expectations at the start of the financial year. Comparisons are with the previous financial year unless otherwise stated.

  • Recommended full-year dividend up 3.7% to 94.7p;
  • Adjusted earnings per share down 3.6% to 121.1p;
  • Adjusted operating profit down 2.4% to £1,828.7m#;
  • Adjusted profit before tax down 6.0% to £1,453.2m;
  • Net exceptional charges of £213.3m;
  • Investment and capital expenditure down 12.9% to £1,503.0m;
  • Adjusted net debt and hybrid capital up 8.7% to £9.2bn at 31 March 2018;
  • Reported operating profit down 28.9 % to £1,379.2m;
  • Reported profit before tax down 38.9% to £1,086.2m; and
  • Reported earnings per share down 48.7% to 81.3p.

# Follows sale by SSE of 16.7% stake in SGN in October 2016.

Note: The definitions SSE uses for adjusted measures are consistently applied and are explained in the Alternative
Performance Measures section of this document, before the Summary Financial Statements

Key developments in 2018/19

In its Notification of Close Period statement on 29 March, SSE said that the 2018/19 financial year isexpected to be one of transition for the SSE group. Key developments are expected to include:

  • The planned transaction* relating to SSE’s GB household energy supply and services business (now named SSE Energy Services), subject to approvals, which remains on track for completion in the last quarter of 2018 or the first quarter of 2019. SSE shareholders will retain their existing SSE shares and will also hold one share in the newly-listed business for every existing SSE share they hold at demerger record date; and from that point, SSE will no longer derive cash flow or earnings from supplying energy and services to households in GB.
  • The expected enactment later this year of the Domestic Gas and Electricity (Tariff Cap) Bill and subsequent introduction of a temporary cap on the price of standard variable and default electricity and gas tariffs. It is intended to be in place for the winter of 2018/19.

*See: Important note: planned SSE Energy Services transaction above

Outlook for 2018/19 to 2022/23

SSE’s strategy is to create value for shareholders and society from developing, owning and operating
energy and related infrastructure and services in a sustainable way, and at its core will be regulated
energy networks and renewable energy.

The financial objective of this strategy is to remunerate shareholders’ investment through the
payment of dividends. SSE believes that its dividends should be sustainable, based on the quality and
nature of its assets and operations, the earnings derived from them and the longer-term financial

In line with this, taking account of the impact of the expected key developments in 2018/19, and
reflecting the underlying quality and value of its assets and earnings and the cash flows they deliver,
SSE’s plan for the dividend for the five years to 2023 is as follows:

  • For 2018/19, SSE is intending to recommend a full-year dividend of 97.5 pence per share, an increase of 3% on 2017/18, which is broadly in line with expectations for RPI inflation. This provides clarity in a year of transition and is not subject to the timing of either the SSE Energy Services transaction or the Domestic Gas and Electricity (Tariff Cap Bill).
  • For 2019/20, SSE is planning to set the first post-transaction dividend at 80.0 pence per share, which reflects the impact of the changes in the SSE group expected to take effect by then. This provides a sustainable basis for future dividend growth.
  • For 2020/21, 2021/22 and 2022/23 SSE is targeting annual increases in the full-year dividend that at least keep pace with RPI inflation. This reflects SSE’s confidence in the quality and value of its assets and earnings and cash flows they deliver.

This plan for the dividend for the five years to March 2023, when the current electricity distribution
Price Control comes to an end, supersedes SSE’s previous reference to a dividend cover range and is
a plan which:

  • Aims to provide shareholders with certainty in 2018/19, a year of transition for SSE;
  • Reflects the changes in the SSE group expected to take effect by the start of the 2019/20
    financial year; and
  • Sets the dividend on a path for sustainable growth for the three years from 2020.

SSE intends to retain a Scrip dividend scheme but where take-up of the full-year dividend exceeds 20%, SSE now intends to buy back shares so the dilutive effect of the Scrip is limited.

In addition to the dividend plan above, subject to the necessary approvals being secured, the transaction relating to SSE Energy Services announced on 8 November means shareholders in SSE will receive one share in the planned new independent energy supply and services company for everyone SSE share they hold at the demerger record date.

Continuing to invest in assets and infrastructure

Over the five years to March 2023, and based on existing plans, SSE expects its capital and investment expenditure to total around £6bn.

Around 70% of the total capex and investment forecast is expected to be related to regulated electricity networks and renewable sources of energy; it also includes £350m investment in a new highly efficient and flexible 840MW gas-fired power station at Keadby in Lincolnshire (Keadby ‘2’).

In the first of the five years, 2018/19, capital and investment expenditure is forecast to be around £1.7bn. SSE currently expects its adjusted net debt and hybrid capital to peak at around £10bn and to fall back towards £9bn by 2023.

Contributing to the UK and Irish economies

SSE’s wider economic contribution is substantially larger than the profit it makes. In addition to creating value for shareholders, SSE supports inclusive economic growth across the UK and Ireland by developing, owning and operating energy and related infrastructure and services in a sustainable way. Its contribution to UK Gross Domestic Product in 2017/18 totalled £8.6bn, taking the total for the last seven years to £65.2bn (in 2017/18 prices). In Ireland, it was €806m in 2017/18. These results are provided by PwC, which has undertaken SSE’s economic contribution analysis for every financial year since 2011/12.

SSE has today published a summary of its sustainability impacts in 2017/18, in advance of the publication of its Sustainability Report 2018 on 15 June 2018.

Richard Gillingwater, Chairman of SSE, said:

“As expected, 2017/18 presented a number of complex challenges to manage, but SSE’s operational performance was generally very robust and significant progress was achieved in key aspects of the company’s capital investment programme. It is encouraging that the company’s financial results are ahead of expectations at the start of the financial year.

“The challenges will continue in 2018/19, which is also expected to be a year of major transition for SSE. A strong operational and investment focus on meeting the current and future needs of energy customers is essential, as is preparing the businesses in the SSE group for the changes that lie ahead.

“SSE’s strategic goal is to create value in a sustainable way, for shareholders and society. The changes we are making as we renew SSE are intended to have positive outcomes over the long term for customers, stakeholders and investors.

“For investors, by giving clarity on the dividend for the five years to March 2023, SSE is, demonstrating that remunerating them for their investment is and will remain its first financial objective.”


Click here to view the full statement.

Full-year Results Presentation (2017/18)

Our Full-year results presentation for the year to 31 March 2018 is now available here.

BLOG: Creating value for shareholders and society

Today we are publishing our Full-year Results and an update on our plans. SSE is a public listed company that seeks to work in the public interest. We have a strategic goal of creating value for shareholders and society, and a clear vision of being a leading energy provider in a low-carbon world, so I want to highlight how our plans support our ambitions.

Planned SSE Energy Services merger on track
First, we’ve confirmed our belief that the proposed merger of our SSE Energy Services business and npower remains on track for completion in the last quarter of 2018 or the first quarter of 2019.

It is right that the deal is scrutinised but we’re positive that the proposed merger in its current form will deliver benefits for customers, and for the energy market and we are working constructively with the CMA to demonstrate this.

A refocused SSE with plans to invest £6bn
A refocused SSE will feature a range of complementary businesses which, combined, create sustainable value for all our stakeholders through investment in energy assets and related infrastructure. We’ve set out new plans to invest around £6bn over the next five years in the UK and Ireland, mainly in upgrading electricity networks and in new sources of electricity generation.

This includes a new, first-of-a-kind gas-fired power station at Keadby in Lincolnshire that will be the most efficient in the UK, contributing to security of electricity supply and supporting the integration of more large-scale renewables onto the system.

New ambition to tackle carbon emissions
Our strategy will support the transition to a low-carbon future and efficient, flexible gas-fired power plant such as that planned for Keadby is part of that. SSE will also continue to invest in renewable energy, in support of a new ambition to reduce by 50% the carbon intensity of the electricity we generate by 2030. If we achieve this ambition, we’ll have cut the carbon intensity of the electricity we generate by 75% since 2006.

Creating value for shareholders
SSE’s continuing investment in modernising the electricity system and its contribution to the economy is made possible by the participation of shareholders, who have supported and are continuing to support SSE’s upgrades of its electricity networks and development of new sources of power generation.

Regular dividends are what they get in return for this investment, benefiting the hundreds of thousands of small-scale shareholders as well as supporting pension funds which provide an income for people in retirement. Today we have set out a new plan for paying dividends out to 2023. In all of this it’s worth noting that dividends are directly or indirectly subject to taxation which benefits the public purse.

Creating value for society and the economy through jobs and tax
SSE believes that sustainable business success requires value to be created for shareholders and society. Today we’ve announced that our contribution to UK Gross Domestic Productin 2017/18 was £8.6bn, taking the total for the past seven years to £65.2bn. SSE also supported 99,000 jobs across the UK. Related to this economic contribution, SSE remains the only FTSE 100 company with the independent Fair Tax Mark accreditation and it paid UK tax totalling £484.1m in 2017/18.

Drawing on key strengths to create value in a sustainable way
A refocused SSE will draw on the key strengths of financial discipline, high-quality assets, a history of partnering, specialism in large capital project management and a longstanding commitment to taking sustainable decisions and responsible actions. Above all, delivery of SSE’s strategy will be dependent on the shared talent, skills and values of its people.

Delivery of the strategy will create value. For shareholders, the value SSE creates is reflected in dividends; for society, it is reflected in economic contribution, tax, jobs, investment and infrastructure. 


Alistair Phillips-Davies
Chief Executive, SSE

VIDEO: SSE CEO outlines SSE's plans for the future

Alistair Phillips-Davies outlines the company's performance in the last 12 months and it's plans for the future.

2030 carbon reduction ambition

About SSE

SSE’s core purpose is to responsibly provide energy and related services needed now and in the future and its vision is to be a leading provider of energy and related services in a low carbon world.

Across the UK and Ireland, SSE has over 11,160MW of capacity for generating electricity. Its most material environmental impact is the carbon dioxide emitted when generating electricity and so it has an important part to play in supporting the transition to a low carbon energy system.

A decade of carbon intensity reduction

Following the UK’s Climate Change Act 2008, which targets a reduction of at least 80% in emissions of carbon dioxide and other greenhouse gases between 1990 and 2050, SSE set itself a target to cut the carbon intensity of the electricity it generates (g/kWh) by 50% between 2006 and 2020. That target was first met in March 2017.

Both the UK and Ireland ratified the Paris Agreement in 2016, committing to undertake ambitious efforts to combat climate change and adapt to its effects. In the UK, there is ongoing consensus to meet the ambitions of the 2008 Climate Change Act, exemplified by the work of the UK Committee on Climate Change and by the content of the UK Government’s Clean Growth Strategy. The Irish Government’s National Mitigation Plan, published in 2017, reaffirmed its commitment to decarbonising the energy mix through specific actions to achieve its 2050 target of an 80 to 95% reduction in greenhouse gases compared with 1990 levels.

It is in this context that SSE has considered its carbon intensity ambitions for the period to 2030.

Considerations in setting future carbon intensity ambitions

The UK government intends that electricity generated from unabated coal will be phased out of the UK electricity system by 2025. To demonstrate its support for this decision, SSE has joined the Powering Past Coal Alliance, a joint UK-Canada initiative, launched at the UN Climate Change Conference, COP23, in November 2017. The Alliance brings together a diverse range of governments, businesses and organisations that are united in taking action to accelerate clean growth and climate protection through the phase out of traditional coal power by 2030.

The retirement of coal means that flexible gas-fired electricity generation will have an important role to play in supporting the transition to a low carbon UK electricity system. As a non-nuclear generator, SSE believes that by having a greater focus on its core competences in wind (on- and offshore), hydro (including pumped storage) and flexible gas-fired generation, it can make an important contribution to the UK’s electricity needs in the period to 2030 and beyond.

To meet UK carbon targets, the Committee on Climate Change estimates the average grid intensity of electricity generated in 2030 should be between 50g/kWh and 100g/kWh. As would be expected from generators with flexible gas-fired generation plant still required to complement low carbon generation and provide other system security services, SSE anticipates the grid intensity of its generation will be above this average. SSE’s investment in Keadby 2, a new combined cycle gas-fired generation station with world-leading efficiency, will reduce the carbon intensity of its gas-fired fleet. Keadby 2 is also expected to reduce carbon emissions for the overall GB electricity system by reducing the need for older, lower efficiency CCGTs as well as single cycle generation, all of which produce higher carbon emissions when running.

The Committee has also highlighted the importance of carbon capture and storage (CCS) technology in helping the UK to achieve its carbon emissions targets. SSE has 10 years’ experience of working towards commercial demonstration of CCS technology in the UK and endorses the Committee’s view of its long-term importance.

More broadly, positioning SSE’s business strategy to realise carbon intensity ambitions requires the maintenance of a stable and investable UK and Irish public policy framework that ensures the electricity mix required to deliver the countries’ carbon targets. In particular, it is critical the UK government provides clarity around the timing and frequency of future Contracts for Difference allocation rounds and budgets for delivering low carbon generation as well as a robust carbon price signal out to 2030. In Ireland, a new renewable support scheme will be essential to deliver a wider range of renewable technologies, including offshore wind.

Carbon intensity ambitions based on future generation portfolio

SSE’s 2030 ambition is based on modelling of a number of scenarios in which it develops, constructs and operates the majority of its existing electricity generation development pipeline. However, the makeup and resultant carbon intensity of SSE’s electricity generation portfolio will fluctuate depending on the requirements of electricity customers, and of the UK electricity system as a whole and whether SSE deems itself the best owner of assets it has developed or of assets which it may have the opportunity to acquire.

Over a period of 12 years, it is possible – perhaps even likely – that the requirements of electricity customers and of the electricity system as a whole will result in some departure from the central scenarios as they appear in 2018.

As a company committed to ongoing disclosure of climate related data, SSE will continue to report its carbon emissions (including g/kWh) and its performance in managing climate change risks and opportunities, through its annual report, its participation in CDP’s carbon disclosure activities, and future enhanced disclosures in line with TCFD recommendations. SSE will maintain transparency on its progress towards its carbon intensity ambitions and continually assess the impact of developments in the electricity system, changes in electricity generation technology, public policy and SSE’s strategy. This reporting will enable investors and other stakeholders to assess whether SSE’s actions are consistent with the company’s vision of being a leading provider of energy and related services in a low carbon world.

A new carbon intensity ambition for 2030

Mindful of the considerations in setting future carbon intensity ambition, SSE is now setting a new, longer term ambition for the carbon intensity of the electricity it generates:

SSE aims to reduce the carbon intensity of its electricity production by a further 50% by 2030, based on 2017/18 levels.

This means that SSE’s electricity generation carbon emissions are now forecast to be around 150 gCO2e/kWh by 2030, which also represents a 75% cut based on its original 2006 baseline. This target is consistent with the Paris Agreement.

Working towards a science based carbon target

While the carbon emitted from SSE’s electricity generation activities is its most material impact, there are other activities across the company’s value chain (e.g. electricity transmission, distribution and supply chain) that contribute to SSE’s total carbon emissions.

SSE’s current 2020 carbon intensity target is supported by additional targets to address further carbon emissions across the SSE group. For example, the reduction of carbon emissions relating to losses on the electricity distribution networks by 3% between 2015 and 2023, SSE is working towards setting a comprehensive science based target and will outline further targets that relate to these other emissions before the end of the next financial year (March 2020).


SSE plc
May 2018

Gas-fired Generation Technology Investment

Energy provider SSE plc has announced plans for capital and investment expenditure of £6 billion across the UK and Ireland over the next five years.

Upgrading electricity networks in the north of Scotland and central southern England and developing new sources of renewable energy, including offshore wind in the UK, are expected to account for around £4 billion of the £6 billion.

Included with the £6 billion is the £350 million which SSE has decided to invest in the construction of a new combined cycle gas turbine (CCGT) power station at Keadby in North Lincolnshire.

SSE and Siemens have partnered to introduce this first-of-a-kind, high efficiency gas-fired generation technology to the UK. Works will begin in Spring 2018 on an 840MW CCGT at Keadby 2. Once completed, the station will be the most efficient CCGT on the system (in the region of 63%), enabling the UK to move away from coal in the 2020s and to integrate more renewables into the power grid.

This partnership places Keadby 2 in a unique commercial position, with Siemens and SSE collaborating to deliver this project at the most competitive cost. Siemens will provide its 9000HL technology and will manage technical, construction risk until the plant is handed over to SSE as well as provide appropriate performance guarantees. SSE will invest around £350 million in the development and construction of the project, with a substantial proportion of its financial exposure deferred until the plant is operational.

SSE continues to believe the UK’s capacity market is the right mechanism to ensure the GB electricity system remains secure at the lowest cost to consumers. Alongside wholesale market and ancillary services revenues, capacity market payments remain an important aspect of the economics of Keadby 2, and SSE intends to participate in future auctions to secure a capacity market agreement.

The decision to invest in Keadby 2, with its high thermal efficiency, is compatible with SSE’s new ambition to achieve a further 50% reduction in the carbon intensity of electricity it generates, to around 150g/kWh. Keadby 2 is also expected to reduce carbon emissions for the overall GB electricity system by reducing the need for older, lower efficiency CCGTs as well as single cycle thermal generators, all of which produce higher carbon emissions when running.

The decision to proceed with Keadby 2 demonstrates SSE’s ongoing commitment to the North Lincolnshire region. SSE already operates a 735MW CCGT at Keadby, which employs 52 people as well as the adjacent £98m Keadby Wind Farm, through which SSE expects to deliver a total of £4.3 million in community benefit funds. Keadby 2 will continue to bring benefits to the regional economy through creation of jobs during the construction phase and the longer-term operation of the station.

Martin Pibworth, SSE’s Wholesale Director, said: “SSE is very pleased to have this unique opportunity now to be partner with Siemens to build a new state-of-the-art gas-fired power station at Keadby 2. Its highly efficient technology, not previously seen in the UK, will provide firm, reliable power from the early 2020s at half the carbon emissions of the coal generation it is replacing. New CCGT complements SSE’s ambitions to develop more offshore and onshore wind as CCGTs remain well-placed to provide flexible, grid-scale back up to complement the large volumes of renewables the UK needs to meet its low carbon targets.”

Willi Meixner, CEO Power and Gas Division, Siemens AG, said: “Siemens is delighted to be selected by SSE to work in partnership in the deployment of our new 50hz 9000HL gas turbine technology which will allow SSE to compete in the UK energy market. Siemens has invested significantly in the development and deployment of this new engine, which is a combination of proven and new technologies to offer leading efficiencies to global power plant operators.”

Energy and Clean Growth Minister Claire Perry said: “Today’s announcement by SSE to invest almost £6bn into the UK and build a state of the art power station in North Lincolnshire is a testament to the success of our power sector in attracting international investment and delivering a diverse and increasingly lower carbon mix.

“Our modern Industrial Strategy sets out a long-term plan to decarbonise the power sector adding to security and prosperity while cutting consumer bills and pollution.”

Creating Value in a Sustainable Way


Sustainability is embedded throughout all of SSE's business operations. This report provides a summary of SSE’s sustainability impacts in 2017/18.

Helping Britain do Business


As one of the largest companies in Britain with a workforce of over 20,000 people and operations across the country, SSE is an important contributor to the UK economy. This report sets out how SSE helps Britain do business and creates economic value across the UK.

BLOG: A year of significant progress and transition in Retail

This morning SSE has published its full-year results statement, setting out how the SSE group as a whole performed in 2017/18. This year’s statement has a strong emphasis on the way in which the SSE is adapting and evolving to create long-term value, seeking to give each of its businesses the best platform for success.

As part of this focus on transition, for the first time we’ve included within the Retail section of these results a breakdown of the performance of SSE Energy Services, our household energy and essential services business in GB. This follows the internal restructuring which was completed on 1 April this year to complete this separation process, which began back in 2014, with more formal separation between Wholesale and Retail.

We’ve also reiterated in the results statement our belief that the separation of SSE Energy Services from the SSE group and, subject to the necessary shareholder and regulatory approvals, combination with npower to create a new, independent, listed retail company in Great Britain can deliver real benefits for the business, its customers and the energy market as a whole.

A significant amount of progress has been made since we first announced the planned merger at our half-year results last November.

  • approval to proceed with the merger was granted by innogy (npower’s parent company)’s Supervisory Board in December;
  • planning for the integration of the two businesses is progressing well, using a third party managed process to preserve SSE’s and npower’s independence from one another;
  • we’ve engaged constructively with the Competition and Markets Authority (CMA) before and throughout its Phase One investigation into the merger;
  • we’ve announced the appointment of Katie Bickerstaffe, Chief Executive of UK and Ireland at Dixons Carphone plc and former Non-Executive Director of SSE plc, as the Chief Executive Designate of the new combined organisation – a position she will take up later this year, from which point she will lead the integration planning work;
  • the CMA has commenced its ‘Phase Two’ investigation, which has a deadline of 22 October 2018 for the publication of its final report;
  • we’re on course to publish a shareholder circular on 27 June, in advance of a vote at SSE’s General Meeting on 19 July; and
  • further appointments to the senior management team designate of the new company are expected to be made in the coming weeks and months.

All of this represents real progress and we remain confident that the transaction is on course to complete in the final quarter of 2018 or first quarter of 2019. However, until such time as the necessary approvals are in place and the transaction is completed, we continue to operate completely separately from npower, competing as normal. With that in mind, we’ve also set out today the four key strategic priorities that will help us respond to the ‘core’ challenges of intense competition, increasing operating costs, regulatory intervention and evolving customer expectations:

  1. attracting and retaining more customers;
  2. reducing our cost to serve and driving efficiencies;
  3. delivering smart meters in a safe, cost-effective and customer-centric way; and
  4. building on our customer-centric culture.

We can be pleased with what we’ve set out in the results statement highlighting all we’ve achieved in all these areas in 2017/18. But we know we need to redouble our efforts this year to ensure we meet the challenges head on and continue to deliver for our customers – and that’s exactly what we’re doing.


Tony Keeling
Chief Commercial Officer & Co-Head of Retail

Steve Forbes
Chief Commercial Officer & Co-Head of Retail, SSE


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