against our strategy
We use a number of financial and non-financial measures to track progress against our strategy of developing, operating and owning energy-related assets and businesses.
“2018/19 presented challenges... but the Company has emerged with a clear purpose and opportunities for the future.”Alastair Phillips-Davies Chief Executive
SSE delivered a full-year dividend of 97.5 pence per share; and made good progress in its programme of capital and investment expenditure in support of future value creation. This is already reflected in the Regulatory Asset Value (RAV) of its energy networks and in its capacity for generating renewable electricity.
The first financial objective of SSE’s strategy is to remunerate shareholders’ investment through the payment of dividends.
In 2018/19, SSE delivered on the first step in its five-year dividend plan.
In order to provide a meaningful measure of underlying financial performance over the medium-term, SSE focuses on adjusted EPS.
SSE’s Earnings Per Share of 67.1p reflects mainly the loss incurred by Energy Portfolio Management.
SSE’s objective is to earn a sustainable level of profit over the medium term.
Adjusted PBT reflects the operating loss incurred by Energy Portfolio Management.
The Wholesale, Networks and Retail segmental structure reflects how SSE’s businesses were managed in 2018/19.
The majority of SSE’s Operating Profit is derived from renewable energy and regulated electricity networks.
“SSE’s long-term strategic focus on renewable energy and regulated networks is clear.”Gregor Alexander Finance Director
SSE applies strict financial discipline that supports investment in assets that provide returns that are greater than the cost of capital.
Investment Expenditure in 2018/19 of £1.42bn included more than £1bn investment in renewable energy and regulated electricity networks.
Extracting interest, tax, depreciation and amortisation from earnings provides a useful measure of SSE’s operational performance.
Adjusted EBITDA for the core renewable energy and regulated electricity networks businesses was more than £1.5bn, or 83% of Group total.
The main focus of SSE’s investment and capital expenditure is on low-carbon renewable energy and regulated electricity networks.
SSE is one year into a five-year, £6bn spending programme, 70% of which is expected to be devoted to renewables and networks.
SSE has an ownership interest in five economically-regulated networks, each of which has a Regulated Asset Value or RAV.
Completion of the Caithness- Moray link helped take Transmission RAV to more than £3.25bn.
"In 2018 we took the important decision to create SSE Renewables, in line with our strategy to give greater focus to our renewable energy assets, operations and developments."Martin Pibworth Energy Director
SSE depends on a healthy and thriving economy to enable its business success, which is why it calculates the value it adds to UK and Irish GDP each year.
SSE has added a total of £75.4bn and €6.8bn (in 2018/19 prices) of value to the UK and Irish economies since 2011/12.
Taxes support the public services everyone relies on. When companies do well, they should share their success with society through the payment of taxes.
Total taxes paid reduced significantly in 2018/19. This was driven by lower profits earned yet capital allowances received as a result of significant ongoing investment.
Renewables are core to SSE’s business strategy which is centred around the low-carbon transition.
2018/19 was a record year for SSE Renewables, with output increasing to 9,780GWh. This was mainly driven by an increase in average generation capacity as Stronelairg and Beatrice began to operate.
Safety is SSE’s number one core value, and everybody in the company operates to the safety license of ‘if it’s not safe, we don’t do it’.
2018/19 is SSE’s best ever safety performance making significant progress in achieving its target of halving its TRIR by 2020/21 since 2017/18.
As a significant generator of electricity, SSE has a responsibility to reduce its carbon intensity in line with climate science.
The carbon intensity of the electricity generated reduced by 7% this year, contributing to the company’s target to halve its carbon intensity by 2030.
SSE relies on the people that work for it in order to operate, with its activities supporting jobs in both urban and rural areas.
Across its operations in the UK and Ireland, SSE supports 101,170 and 4,080 jobs respectively.