SSE PLC Preliminary Results for the year ended 31 March 24

RNS Number : 3756P

SSE PLC

22 May 2024

SSE PLC: PRELIMINARY results

for the YEAR ended 31 MARCH 2024

22 May 2024

A YEAR OF DELIVERY, RESILIENCE & GROWTH

· Delivered investment of £2.5bn in critical national energy infrastructure, including:

o Construction starting on Eastern Green Link 2 subsea transmission cable, the largest in the UK;

o Full power at Seagreen, the world's deepest fixed bottom offshore wind farm;

o Progressing the world's largest wind farm, with Dogger Bank A turbine installations continuing;

o Final commissioning under way on both Viking onshore wind farm and Shetland HVDC link.

· Reporting adjusted earnings per share of 158.5p, towards the top end of guidance and reflecting the resilience and quality of earnings from balanced business mix despite normalisation of energy markets.

· Enhanced visibility of accelerated growth in core regulated Transmission business creates significant depth to long-term earnings whilst complementing SSE's renewables capacity additions and demonstrating the benefit of optionality across networks, renewables and flexibility.

· Making a major contribution to communities, adding £6bn to UK GDP, supporting over 50,000 UK jobs with a further €1bn contribution to Ireland GDP and over 3,000 Irish jobs supported.

· Investing in safety, opening Scotland's first immersive safety training facility which will deliver innovative training to 7,000 people per year for the next three years. However, the combined Total Recordable Injury Rate for employees and contractors increased to 0.20 from 0.19 in 2023.

FINANCIAL SUMMARY

	Adjusted				Reported
(continuing operations¹)		Mar 2024	Mar 2023	% mvmt	Mar 2024	Mar 2023	% mvmt
Operating profit / (loss) (£m)		2,426.4	2,529.2	(4%)	2,608.2	(146.3)	+1,883%
Profit / (loss) before tax (£m)		2,174.7	2,183.6	(-%)	2,495.1	(205.6)	+1,314%
Earnings / (loss) per share (p)		158.5	166.0	(5%)	156.7	(14.7)	+1,166%
Investment, capital & acquisitions (£m)		2,476.7	2,803.3	(12%)	3,285.6	3,188.7	+3%
Net Debt and Hybrid Capital (£bn)²		(9.4)	(8.9)	+6%	(8.1)	(8.2)	(1%)

¹ Excluded discontinued operation relates to the disposal of the Gas Production business which contributed £nil to Reported profit for the year ended 31 March 2024 (2023: £35.0m profit). ² Reported numbers exclude equity accounted hybrid capital.

financial highlights: Delivering resilient earnings

· Adjusted earnings per share of 158.5p, towards the top end of guidance provided in the pre-close statement reflecting strong operational performance across the diversified business mix.

· Reported earnings per share of 156.7p, reflecting positive fair value movements on derivatives offset by impairments in Triton Power and Gas Storage, reversing previous valuation increases to reflect changing market conditions, and an impairment in non-core Neos Networks investment.

· Increased profits in SSEN Transmission driven by increased investment as the business progresses with delivery of the RIIO-T2 business plan, whilst the timing of cost inflation recovery in SSEN Distribution principally led to lower profitability in that business.

· Profitability in Renewables reflects higher hedged prices combined with lower hedge buyback costs, with higher year-on-year output reflecting Seagreen offshore wind farm reaching full power.

· In SSE Thermal, lower market income was partially offset by additional capacity from Triton Power and Keadby 2 offering the market increased flexibility, alongside strong future capacity auction results.

· Gas Storage earnings lower, in line with expectations, as gas prices and price volatility reduced

· £1.1bn of long-term debt issued in the period including a €750m eight-year Green Bond at a fixed coupon of 4.0% and a further £500m 20-year Green Bond at an all-in rate of 5.575%.

· Adjusted investment, capital and acquisition expenditure of £2.5bn.

· Adjusted net debt and hybrid capital at £9.4bn, in line with pre-close guidance, with a net debt to EBITDA ratio of 3.0 times, well within a strong investment grade credit rating range.

Final dividend in line with growth-enabling plan

· Intention to recommend a final dividend of 40.0p for payment on 19 September 2024, making the full year dividend 60p per share in line with growth aligned dividend plan.

· Scrip uptake continues to be capped at 25% and implemented by means of a share buy-back.

PREMIUM ASSETS CREATING HIGH QUALITY EARNINGS

· On track to deliver adjusted EPS of 175 - 200p by FY27, a CAGR of 13-16% over the five-year plan.

· Continued focus on delivery of the fully-funded £20.5bn Net Zero Acceleration Programme Plus (NZAP Plus), converting high quality organic project pipeline into long-term sustainable earnings.

o c.55% of capex focused on electricity networks with regulated, index-linked revenues

o c.35% of capex on renewables with increasing proportion under long-term index-linked contracts

o c.10% of capex on flexible power which is benefiting from increasing capacity market income

· Capex weighting reflects strong growth opportunities across the Group's portfolio, including:

o Gross electricity networks RAV to exceed £16bn by 2026/27, a >15% CAGR over the five-years

o Up to 5GW net renewables capacity additions over the period, although focus remains on creating long-term value over short-term capacity volume

· Maintaining balance sheet strength through diversified business mix with net debt / EBITDA expected to remain within or below 3.5 - 4.0x range over the course of the plan.

· Reiterating commitment to target annual dividend increases of between 5 - 10% to 2026/27, based on an expected 60 pence full year dividend for 2023/24, with retention of the scrip option capped at 25%.

STRATEGIC HIGHLIGHTS: DELIVERING ESSENTIAL INFRASTRUCTURE

· Eastern Green Link 2, a 2GW subsea HVDC project being delivered in partnership with National Grid, received confirmation from Ofgem of £4.4bn project assessment, with onshore works now under way in Peterhead. EGL2 will be the UK's biggest subsea transmission project.

· Strong progress has also been made on delivery of further ASTI¹ projects, which could collectively comprise c.£17bn of gross nominal investment to unlock renewable resource in Scotland.

· Installation of SSEN Transmission's Shetland HVDC reaching final commissioning ahead of energisation in Summer 2024.

· SSEN Distribution has completed the first year of its RIIO-ED2 price control, delivering accelerated investment in capital projects whilst unlocking its first Uncertainty Mechanism funding.

· Full power achieved at 1.1GW Seagreen, Scotland's largest and the world's deepest fixed bottom offshore wind farm and final commissioning reached at 440MW Viking, which is expected to be the UK's most productive onshore wind farm when it reaches full power later in 2024.

· Delivered first power at 3.6GW Dogger Bank, which will be the world's largest offshore wind farm when complete. Whilst phase one is behind original schedule, it is expected to deliver full value in line with FID.

· Secured 605MW of onshore wind in the UK fifth Contract for Difference auction (AR5) in addition to 101MW in Ireland's third RESS process.

¹Accelerated Strategic Transmission Investment

Alistair Phillips-Davies, Chief Executive, said:

"This is a strong performance where we have delivered essential energy infrastructure, benefited from the resilience of our business model, and made disciplined investment in our excellent growth opportunities.

"Renewables, flexible power and electricity networks are the building blocks of a cleaner and more secure energy system. With world-class assets and capabilities, and enhanced visibility of growth in transmission, SSE is ideally placed to benefit from this structural trend, creating value for shareholders and society.

"Our immediate focus is on delivering our financial and operational growth targets out to 2026/27 and we are on track to do this, converting our premium organic project pipeline into high-quality sustainable earnings."

Key Performance Indicators

Key Financial Indicators	Adjusted			Reported
(continuing operations)	Mar 2024	Mar 2023	Mar 2024		Mar 2023
Operating profit / (loss) by business £m
- SSEN Transmission	419.3	372.7	559.1		405.5
- SSEN Distribution	272.1	382.4	272.1		382.4
- SSE Renewables	833.1	561.8	630.3		428.1
- SSE Thermal & Gas Storage	818.9	1,244.4	602.2		1,338.7
- Other businesses inc. corporate unallocated	83.0	(32.1)	544.5		(2,701.0)
Operating profit / (loss) £m	2,426.4	2,529.2	2,608.2		(146.3)
EBITDA £m	3,295.6	3,382.1	3,333.1		557.9
Profit / (loss) before tax £m	2,174.7	2,183.6	2,495.1		(205.6)
Earnings / (loss) per share (EPS) pence	158.5	166.0	156.7		(14.7)

Full year dividend per share (DPS) pence	60.0	96.7	60.0		96.7

Investment and capital expenditure £m
- SSEN Transmission	595.6	495.5	797.5		543.8
- SSEN Distribution	505.1	421.0	657.1		502.0
- SSE Renewables	1,097.1	911.5	788.9		1,072.0
- SSE Thermal & Gas Storage	100.4	159.5	108.7		71.6
- Other businesses	178.5	173.1	933.4		999.3
Acquisition consideration £m	-	642.7	-		642.7
Investment, capital and acquisitions £m	2,476.7	2,803.3	3,285.6		3,831.4

Net debt and hybrid capital £m	9,435.7	8,894.1	8,097.8		8,168.1

2022/23 segmental numbers restated reflecting movement of Solar and Battery business to SSE Renewables, previously reported in SSE Enterprise. Excluded discontinued operation contributed £nil to Reported profit for the period ended 31 Mar 2024 (31 Mar 2023: £35.0m profit).

Operational Key Performance Indicators	Mar 2024	Mar 2023
SSE Thermal generation - GWh¹	15,247	18,313
SSE Renewables generation - GWh (inc. pumped storage and constrained-off GB wind)	11,158	10,159
Enterprise - GWh	105	96
Total generation output - all plant - GWh	26,510	28,568

SSEN Transmission gross RAV - £m²	5,676	4,836
SSEN Distribution RAV - £m	5,301	4,720
SSE Total Electricity Networks gross RAV - £m²	10,977	9,556

SSE Business Energy Electricity Sold - GWh	10,693	12,108
SSE Business Energy Gas Sold - mtherms	168	200
Airtricity Electricity Sold - GWh	6,400	5,795
Airtricity Gas Sold - mtherms	199	193

¹ 2022/23 excludes 1,184GWh of pre-commissioning output from Keadby 2 which entered commercial operation on 15 March 2023
² Gross of 25% non-controlling interest in SSEN Transmission.

ESG Key Performance Indicators	Mar 2024	Mar 2023
Carbon emissions (scopes 1&2) MtCO₂e	4.81	6.52
Scope 1 GHG intensity gCO₂e/kWh	205	254
Total water consumed (million cubic meters)	2.4	1.4

Total recordable injury rate per 100,000 hours worked	0.20	0.19
Total economic contribution - UK/Ireland (£bn/€bn)¹	5.96/1.06	6.04/0.43
Jobs supported - UK/Ireland (headcount)²	53,230/3,270	39,940/2,430
Total taxes paid UK/Ireland (£m/€m)	679.2/68.0	501.7/53.8
Employee retention/turnover rate (%)³	91.3/8.7	89.5/10.5
Employee engagement index (%)⁴	85	84

Average board tenure - years⁵	3.8	4.4
Female board members (%)⁶	42	46
Independent board members (%)⁶	73	75
Total number of board members	12	13

¹Direct, indirect and induced Gross Value Added, from PwC analysis; ² Direct, indirect and induced jobs supported, PwC analysis. ³ Includes voluntary and involuntary turnover, excludes end of fixed term contracts and internal transfers. ⁴ Results from SSE's annual employee engagement survey. ⁵ Non-Executive directors including non-Executive Chair ⁶Excludes non-Executive Chair.

Disclaimer

This financial report contains forward-looking statements about financial and operational matters. These statements are based on the current views, expectations, assumptions, and information of management, and are based on information available to the management as at the date of this financial report. Because they relate to future events and are subject to future circumstances, these forward-looking statements are subject to unknown risks, uncertainties and other factors which may not have been in contemplation as at the date of the financial report. As a result, actual financial results, operational performance, and other future developments could differ materially from those envisaged by the forward-looking statements. Neither SSE plc nor its affiliates assumes any obligations to update any forward-looking statements.

SSE plc gives no express or implied warranty, representation, assurance or undertaking as to the impartiality, accuracy, completeness, reasonableness or correctness of the information, opinions or statements expressed in the presentation or any other information (whether written or oral) supplied as part of it. Neither SSE plc, its affiliates nor its officers, employees or agents will accept any responsibility or liability of any kind for any damage or loss arising from any use of this presentation or its contents. All and any such responsibility and liability is expressly disclaimed. In particular, but without prejudice to the generality of the foregoing, no representation, warranty, assurance or undertaking is given as to the achievement or reasonableness of any future projections, forward-looking statements about financial and operational matters, or management estimates contained in the financial report.

This financial report does not constitute an offer or invitation to underwrite, subscribe for, or otherwise acquire or dispose of any SSE plc shares or other securities, or of any of the businesses or assets described in the financial report, and the information contained herein cannot be relied upon as a guide to future performance.

Definitions

The financial information set out in this Preliminary Results Statement has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and UK adopted International Accounting Standards.

In order to present the financial results and performance of the Group in a consistent and meaningful way, SSE applies a number of adjusted accounting measures throughout this financial report. These adjusted measures are used for internal performance management and are believed to present the underlying performance of the Group in the most useful manner for ordinary shareholders and other stakeholders.

The definitions SSE uses for adjusted measures are explained in the Alternative Performance Measures ("APMs") section before the Summary Financial Statements. SSE continues to prioritise the monitoring of developing practice in the use of APMs, ensuring the financial information in its results statements is clear, consistent, and relevant to the users of those statements.

For the purpose of calculating the 'Net Debt to EBITDA' metric, 'Net Debt' represents the group's 'Adjusted Net Debt and Hybrid Capital" APM and 'EBITDA' represents the full year group "Adjusted EBITDA" APM and including a further adjustment to remove the proportion of "Adjusted EBITDA" from equity-accounted Joint Ventures which relates to project financed debt.

Important note: Discontinued Operations - Gas Production

On 14 October 2021, the Group completed the sale of its Gas Production business which had been presented as a discontinued operation prior to disposal as the transaction constituted the exit of all activity in that industry. The Group's adjusted measures therefore exclude the contribution from this business in all periods presented. The Group continues to retain a 60% share of the decommissioning obligation of the Gas Production business following disposal. Any adjustments to the decommissioning obligation are accounted for through the Group's consolidated income statement and removed from the Group's adjusted profit measures as the revaluation of the provision is not considered to be part of the Group's core continuing operations.

Important note: Non-controlling equity stake sale

On 30 November 2022, the Group completed the sale of a 25% non-controlling equity stake in Scottish Hydro Electric Transmission plc ('SHET') (see note 12 of the Summary Financial Statements).

As this transaction did not result in a loss of control, the business continues to be classified as a continuing operation and its result continues to be included within the Group's adjusted profit-based measures, after removing the relevant share of profit attributable to holders of non-controlling equity stakes from the point when the ownership structure changed in accordance with the APM definitions.

Further Information

Investor Timetable
2024 Annual Report and Sustainability Report published on sse.com		14 June 2024
AGM and Q1 Trading Statement		18 July 2024
Final ex-dividend date		25 July 2024
Record date		26 July 2024
Scrip reference pricing days		25-31 July 2024
Scrip reference price confirm and released via RNS		1 August 2024
Final date for receipt of scrip elections		22 August 2024
Final dividend payment date		19 September 2024
Notification of Closed Period		Around 30 September 2024
Interim results for the six months ended 30 September 2024		13 November 2024

Contact Details
Institutional investors and analysts	ir@sse.com	+ 44 (0)345 0760 530
Shareholder services	SSE@linkgroup.co.uk	+ 44 (0)345 143 4005
Media	media@sse.com	+ 44 (0)345 0760 530
MHP Group, Oliver Hughes	oliver.hughes@mhpgroup.com	+ 44 (0)7885 224 532
MHP Group, James McFarlane	james.mcfarlane@mhpgroup.com	+ 44 (0)7584 142 665

Management presentation webcast and teleconference

SSE will present its full year results for the twelve months to 31 March 2024 on Wednesday 22 May at 10:00am BST.

You can join the webcast by visiting www.sse.com and following the links on either the homepage or investor pages; or directly using:

https://edge.media-server.com/mmc/p/6nczrdg7

This will also be available as a teleconference, for which participants can register to receive a unique pin code and conference call number using:

https://register.vevent.com/register/BI187dcac642ae47be89755db4e581283c

The presentation will be available to replay.

Online Information

News releases and announcements are made available on SSE's website at www.sse.com/investors and you can register for Regulatory News Service alerts using the following link: sse.com/investors/regulatory-news/regulatory-news-alerts/. You can also follow the latest news from SSE at www.twitter.com/sse.

Strategic Overview

POWERING SUSTAINABLE GROWTH

The work SSE is doing to accelerate the construction of renewables assets, provide critical flexible generation back-up and transform electricity networks goes to the very heart of a long-held purpose that is building a better world of energy. Renewables, flexibility and networks are the foundations of the future energy system and we have the skills, world-class assets and development pipeline to deliver it.

The same diversified business mix that performed so well in 2023/24 gives us the optionality to pivot our investment plans to where the best opportunities exist in the clean electricity value chain. In this way we are powering sustainable growth. Right now, that growth - and associated value creation - are coming through networks and renewables, and this is reflected in the adjustments we made in the year to capital allocation across the Group with 90% of our fully-funded £20.5bn Net Zero Acceleration Programme Plus (NZAP Plus) investment programme geared to these two areas, particularly as we get enhanced visibility of growth in our core regulated transmission business.

As the UK and Ireland's clean energy champion, there are significant tailwinds behind our core business and broad political and societal consensus on the need to slow climate change. Supportive market design will be key to SSE playing its part and we welcomed the bulk of the UK Government's long-awaited Review of Electricity Market Arrangements that will accelerate reform of the energy system. We also welcome the more strategic approach to network planning and continue to advocate for the deployment of more renewables, greater ambition on flexible generation technologies and streamlined planning and consenting frameworks for networks.

DELIVERY, RESILIENCE AND GROWTH

We can look back on 2023/24 as a year in which we accelerated the delivery of a strategic plan that is making significant inroads to a future energy system that is cleaner, secure and more affordable. It was another year of record investment, with £2.5bn spent on critical national infrastructure as we pushed ahead with our fully-funded capex programme to 2026/27 and reached a number of delivery milestones on our flagship infrastructure projects. At the same time we met our financial objectives, achieving the higher end of our guided range of full-year adjusted Earnings Per Share as the resilience of our diversified business mix proved its worth yet again.

It is all the more pleasing that progress in the year was accompanied by a significant reduction in our greenhouse gas (GHG) emissions. Performance against our climate targets represented the lowest value on record for SSE's total GHG emissions, scope 1 GHG emissions and carbon intensity. This was mainly attributable to a reduction in thermal generation output in the year and we will continue to track closely the progress we are making against interim science-based targets.

SSE's continued success is dependent on the talent and commitment of our highly-skilled employees and contract partners, and getting them home safe at the end of each working day remains our top priority. We were therefore deeply saddened by the loss of Richard Ellis, the employee of a contract partner, who died in an offsite incident in October 2023. Among direct employees we matched our best safety performance year, but this was of course overshadowed by Richard's death. We are redoubling efforts to ensure everyone at SSE is kept out of harm's way, and with a growing workforce - we filled over 4,000 roles last year - safety remains front of mind.

DELIVERY OF A CLIMATE-FOCUSED STRATEGY

One measure of the strategic progress we are making is the various milestones reached in the year on major infrastructure projects within SSE's two growth engines: networks and renewables. Working with our joint venture partners, the construction of SSE Renewables' flagship projects continued to progress, with Scotland's largest offshore wind farm, Seagreen, completed in the Firth of Forth. We also made good progress at Viking, on Shetland, and Yellow River and Lenalea in Ireland, while construction got under way at onshore sites in France and Spain. These are highly complex projects, however, and not without risk, as we have seen with Dogger Bank A which has been impacted by poor North Sea weather, installation vessel availability and supply chain delays with completion now expected in the first half of 2025.

At the same time, SSEN Transmission has been delivering critical grid infrastructure that is vital to the future energy system. Good progress was made in the year on enabling work for the Eastern Green Link 2, or EGL2, which is the High Voltage Direct Current (HVDC) undersea link from Peterhead to Yorkshire. Elsewhere, major RIIO-T2 projects moved ahead at pace, notably with the pioneering HVDC Shetland link where all 260km of the subsea cable was laid in 2023 and the project remains on track for full energisation in summer 2024.

resilience in a complex energy landscape

We operate in a highly dynamic energy landscape that is best navigated with a blend of diverse technologies and revenue streams. Our very deliberate mix of market-facing and economically-regulated businesses spans the clean energy value chain and offers stable economic returns for the Group as a whole, while providing multiple options for continued investment. The agility of the Group business model has enabled us to pivot capital to where it will have the biggest impact on net zero and create the greatest value. And while SSE Renewables and SSEN Transmission are the current drivers of growth, with Transmission in particular offering a 'once in a generation' growth opportunity, they are complemented by other businesses that contribute to delivery of our climate-focused, value-creating strategy.

SSE Thermal offers much of the system flexibility needed for energy security and secured significant capacity contracts in the year; SSEN Distribution is transforming itself and investing to electrify streets and homes as demand for its services increases; SSE Energy Markets is managing risk, navigating market volatility and securing value for our assets; and our customer businesses are ensuring a valuable route to market with new products and systems, bringing energy users with us on the road to net zero. As the constituent parts of a strategically cohesive group, these are quality businesses that are creating lasting value. Detail of how all of our businesses have played their part in the past year can be found in the following pages.

growth beyond the five-year plan

Looking beyond the NZAP Plus, we see more growth to come. With steady regulatory earnings and well-established infrastructure, electricity networks have long been an underappreciated part of the energy system. An impending surge in demand has changed all that. SSEN Transmission is required by its licence conditions to deliver £20bn of upgrades to the network in the north of Scotland under the Large Onshore Transmission Infrastructure (LOTI) and Accelerated Strategic Transmission Infrastructure (ASTI) frameworks, with additional investment of at least £5bn earmarked for early delivery in the north of Scotland in Ofgem's Beyond 2030 plan.

And we have an enviable development pipeline of energy assets that will be needed for net zero too. Renewables projects like Berwick Bank, Seagreen 1A, Coire Glas and Arklow will be complemented by future auction possibilities and other opportunities in our home markets and abroad. There is also a range of flexibility options across different technologies, from batteries and pumped storage hydro to carbon capture and storage and hydrogen.

on course with the nzap pluS

For now, our primary focus is on delivery of our five-year plan and the lasting value it will bring to shareholders and society. Much of the anticipated NZAP Plus growth is factored into the later years of the plan, and some 60% of the forecast earnings is regulated and inflation-linked. This - combined with a fully-funded investment plan; strict capital discipline; quality assets and people; a resilient business mix; and a strong balance sheet with the majority of debt held at fixed rates - gives us every confidence in our guidance to 2026/27.

Alistair Phillips-Davies
Chief Executive
SSE plc

Group financial review

Year ENDED 31 MARCH 2024

This Group Financial Review sets out the financial performance of the SSE Group for the year ended 31 March 2024. See also the separate sections on Group Financial Outlook, 2024/25 and beyond, and Supplemental Financial Information.

In order to present the financial results and performance of the Group in a consistent and meaningful way, SSE applies a number of adjusted accounting measures throughout this financial report. These adjusted measures are used for internal management reporting purposes and are believed to present the underlying performance of the Group in the most useful manner for shareholders and other stakeholders.

The SSE Renewables and SSE Business Energy comparative results have been restated to reflect the transfer of responsibility for the Solar and Battery business to SSE Renewables and Building Energy Management Systems to SSE Business Energy. These businesses both transfer from SSE Enterprise, where comparative results are also restated.

The definitions SSE uses for adjusted measures are consistently applied and are explained - including a detailed reconciliation to reported measures - in the Alternative Performance Measures section of this document before the Summary Financial Statements.

Key Financial Metrics	Adjusted		Reported
(continuing operations)¹	Mar 2024 £m	Mar 2023 £m	Mar 2024 £m	Mar 2023 £m
Operating profit / (loss)	2,426.4	2,529.2	2,608.2	(146.3)
Net finance (costs) / income	(251.7)	(345.6)	(113.1)	(59.3)
Profit / (loss) before tax	2,174.7	2,183.6	2,495.1	(205.6)
Current tax (charge) / credit	(371.0)	(358.8)	(610.7)	110.0
Effective current tax rate (%)	17.1	16.4	25.6	(12.7)
Profit / (loss) after tax	1,803.7	1,824.8	1,884.4	(95.6)
Less: hybrid equity coupon payments	(73.1)	(38.8)	(73.1)	(38.8)
Less: profits attributable to non-controlling interests	-	-	(100.8)	(23.6)
Profit / (loss) after tax attributable to ordinary shareholders	1,730.6	1,786.0	1,710.5	(158.0)

Earnings / (loss) per share (pence)	158.5	166.0	156.7	(14.7)

Number of shares for basic/reported and adjusted EPS (million)	1,091.8	1,075.6	1,091.8	1,075.6
Shares in issue at 31 March (million)²	1,093.4	1,090.3	1,093.4	1,090.3

¹ Excluded discontinued operation relates to the disposal of the Gas Production business which contributed £nil to Reported profit for the year ended 31 March 2024 (2023: £35.0m profit).

² Excludes Treasury shares of 2.8m in March 2024 and 3.6m in March 2023

Dividend per Share (pence)	Mar 2024	Mar 2023
Interim Dividend	20.0	29.0
Final Dividend	40.0	67.7
Full Year Dividend	60.0	96.7

As announced alongside the NZAP Plus capital investment plan, and following completion of the Group's previous commitments to dividend growth, the 2023/24 dividend was rebased to 60.0 pence per share to support SSE's ongoing ambitions to accelerate investment in the assets required to reach net zero.

Operating profit performance for the Year to 31 march 2024

Business-by-business segmental	Adjusted		Reported
(continuing operations)	Mar 2024 £m	Mar 2023 £m	Mar 2024 £m	Mar 2023 £m
Operating profit / (loss)
SSEN Transmission	419.3	372.7	559.1	405.5
SSEN Distribution	272.1	382.4	272.1	382.4
Electricity networks total	691.4	755.1	831.2	787.9

SSE Renewables	833.1	561.8	630.3	428.1

SSE Thermal	736.1	1,031.9	644.4	1,089.5
Gas Storage	82.8	212.5	(42.2)	249.2
Thermal Total	818.9	1,244.4	602.2	1,338.7

SSE Business Energy	95.8	15.7	95.8	15.7
SSE Airtricity (NI and Ire)	95.0	5.6	94.5	5.2
Energy Customer Solutions Total	190.8	21.3	190.3	20.9

SSE Energy Markets (formerly EPM)	38.9	80.4	590.0	(2,626.0)

SSE Enterprise (formerly Distributed Energy)	(25.6)	(7.0)	(25.6)	(13.1)

Neos Networks	(32.3)	(39.8)	(116.1)	(56.0)

Corporate unallocated	(88.8)	(87.0)	(94.1)	(26.8)

Total operating profit / (loss)	2,426.4	2,529.2	2,608.2	(146.3)

Net finance (costs) / income	(251.7)	(345.6)	(113.1)	(59.3)

Profit / (loss) before tax	2,174.7	2,183.6	2,495.1	(205.6)

Notes: 2022/23 segmental numbers above restated to reflect movement of Solar and Battery business to SSE Renewables and Building Energy Management Systems to SSE Business Energy, both previously reported under SSE Enterprise. Excluded discontinued operation relates to the disposal of the Gas Production business which contributed £nil to Reported profit for the year ended 31 March 2024 (2023: £35.0m profit).

Segmental EBITDA results are included in Note 6 to the Summary Financial Statements.

Operating profit

Adjusted and reported operating profits/losses in SSE's business segments for the year to 31 March 2024 are set out below; comparisons are with the same period to 31 March 2023 unless otherwise stated.

SSEN Transmission: Adjusted operating profit increased by 13% to £419.3m from £372.7m in the prior year. 25% of this business was divested on 30 November 2022 and the prior year comparative therefore includes 100% of the operating profit for the business for the first eight months of the year and 75% thereafter, whilst the current year includes 75% of the operating profit for the full year. If the prior year comparative was normalised for this basis difference of £(68.6)m, adjusted operating profit would have increased by 38%.

SSEN Transmission saw a significant increase in allowed revenues during the year, reflecting both the increased portfolio of works under the RIIO-T2 price control as well as inflation uplifts in line with the regulatory framework, together with a positive timing variance following under-recovery of revenues in the previous year. These were partially offset by increases in operating costs as the business continues to grow its operational capabilities and depreciation as the asset base expands.

Reported operating profit increased by 38% to £559.1m compared to £405.5m, reflecting all of the movements above except for the non-controlling interest basis difference, as non-controlling interests are fully consolidated for all profit metrics under IFRS.

SSEN Distribution: Adjusted and reported operating profit decreased by 29% to £272.1m compared to £382.4m in the prior year.

The price control allowed revenue for 2023/24 is based on tariffs which were set in December 2021 and therefore over this period do not reflect the inflationary increases to the operating cost base since that date, which will be recovered in the 2024/25 financial year. As a result, the decrease in operating profit during the year principally reflects the increase in the operating cost base due to inflation alongside higher network costs due to maintenance volumes. The operating result also includes around £18m of additional fault and repair costs as the business reacted to a year with ten named storms as well as additional depreciation charges as the asset base expands under RIIO-ED2.

SSE Renewables: Adjusted operating profit increased by 48% to £833.1m from £561.8m in the prior year. The increase in profitability was largely driven by the growth in revenues during the year due to a combination of the higher power price environment combined with additional operating capacity which more than offset the lower wind speed environment in Scotland. Renewables forward hedged prices at the start of the year were between 35 - 40% higher than the previous year, reflecting forward hedging activity in a higher price environment. The increase in operational capacity as Seagreen offshore wind farm reached full commercial operations during October 2023, combined with the prior year reflecting a £(143)m one-off buy-back costs relating to Seagreen volumes hedged but not delivered, further improved the year-on-year result. However, this was partially offset by 4% lower wind speeds in Scotland which, when combined with the impact of ten named storms, meant onshore wind volumes were c.6% down year-on-year. Finally, at the operating cost level, the cessation of Balancing Services Use of System (BSUoS) charges as part of the network charging reform was offset by an increase in staff costs driven by inflation and increased headcount due to organic growth of the business.

Reported operating profit increased by 47% from £428.1m to £630.3m. In addition to the factors above, this is reflective of an increase in the share of Joint venture interest and tax of £(42.7)m and a £(37.4)m remeasurement on SSE's affiliate CfD arrangements which are classified as derivative contracts.

SSE Thermal: Adjusted operating profit decreased by 29% to £736.1m, compared to £1,031.9m in the prior year. This decrease is largely driven by the lower spark spread and lower volatility market environment, as energy commodity prices normalise down during the second half of the year from the peaks reached in 2022/23. This decrease was partially offset by a full year of financial contribution from 893MW Keadby 2 which entered full operations in March 2023 and therefore contributed to overall gross margin improvements.

Reported operating profit decreased by 41% to £644.4m, compared to £1,089.5m in the prior year which included a net gain of £128.0m from a number of exceptional items and remeasurements. Lower forward power prices has meant the current year result includes a £(15.4)m net remeasurement on Triton Power operating derivatives reflecting lower levels of in-the-money hedges compared to prior year. The power price environment also meant a £(63.2)m impairment was recognised on the Triton Power investment, as the previous years have seen strong realised cashflows from the asset. The reported result also reflects SSE's share of Joint Venture Interest and Tax expenditure decreasing from £(60.4)m in the prior year to £(13.1)m in the current year.

Gas Storage: Adjusted operating profit decreased by 61% to £82.8m, compared to £212.5m of profit in the prior year. The prior year result reflected a more volatile gas market as well as an inversion of the typical spread between higher-priced winter gas and lower-priced summer gas due to low Russian gas supplies and high demand as gas stores were built up. Whilst the year saw increased volumetric trading, this was offset by less overall volatility in the gas market and lower gas prices which therefore decreased trading profits.

Reported operating loss decreased 117% to £(42.2)m from a profit in the prior year of £249.2m. In addition to the movements above, the prior year included an impairment reversal of £45.7m compared to an impairment charge in the current year of £(134.1)m, reversing prior write-backs and reflecting a lower point-in-time estimate of future gas prices and lower volatility assumptions. In addition, the reported results include a £9.1m revaluation gain on gas held in storage, compared to a £(9.0)m loss in the prior year.

SSE Business Energy: Adjusted and reported profitability increased to £95.8m in the year compared to £15.7m in the prior year. The business has seen a challenging three years of profits below expectations due firstly to the global pandemic and then followed by a period of extreme commodity price volatility which affected consumer demand. The current year has seen the business return to a higher level of profitability, reflecting the well-established competitive pricing and hedging controls. However, it still remains a challenging environment for consumers and customer-facing businesses with bad debt expenses increasing by £5m on the prior year. During the year, the business established a £15m customer support fund for small businesses, voluntary and charitable organisations. The business has also seen an increase in its operating cost base during the year reflecting the implementation of a new customer management system called Evolve.

SSE Airtricity: Adjusted profitability increased to £95.0m from £5.6m in the prior year. This was aided by an increase in income from wind farms contracted to SSE Airtricity which rose from £28m in the prior year to £74m in the current year. The prior year saw Airtricity respond to the challenging circumstances faced by its domestic energy customers during the year by committing to not make a profit through tariff delays, price freezes for vulnerable customers and a €25m customer fund. Residual profits from the previous financial year of £5.6m were also redistributed in April 2023 via customer credits. Supporting customers continued to be the main focus during the current year, with two tariff reductions implemented and continuation of financial supports for vulnerable customers. Increased consumer demand combined with reduced commodity price volatility has meant supply margins have returned towards more normalised levels this year.

Reported operating profit increased to £94.5m compared to £5.2m in the prior year reflecting a £(0.1)m change in the share of interest and tax from Joint Ventures, in addition to the movements above.

SSE Energy Markets (formerly Energy Portfolio Management): Adjusted operating profit has decreased to £38.9m from a £80.4m profit in the prior year. Energy Markets continues to generate a relatively low level of baseline operating earnings through service provision to those SSE businesses requiring access to the Energy Markets. In addition, the business is permitted to take optimisation opportunities whilst managing liquidity and shape on external trades, but these optimisation opportunities are subject to strict internal VAR limits and controls. The business also looks to add value through contracting for third party PPA and route to market contracts and significant value is also generated from the optimisation of green certificates such as ROCs and REGOs. The decrease in year-on-year profitability is mainly due to a lower level of volatility and price of power and gas trades in the market, which has driven lower profits from trading, optimisation activities and wind PPA contracts.

Reported operating profit increased to £590.0m from £(2,626.0)m in the prior year. In addition to the movements above, the reported operating result includes the net remeasurement gain on forward commodity derivatives in the year relative to loss on the same remeasurement in the prior year. In line with previous years, these IFRS 9 remeasurements exclude any remeasurement of 'own use' contracts and are unrelated to underlying operating performance.

SSE Enterprise (formerly Distributed Energy): An adjusted operating loss of £(25.6)m was recognised, compared to a loss of £(7)m in the prior year. The business continues to incur planned losses as it invests to support business growth in localised and flexible, smart energy infrastructure.

Reported operating losses increased to £(25.6)m from £(13.1)m, with the prior year reflecting an exceptional charge of £(6.1)m which mainly related to provisions in connection with the sale of the Contracting and Rail business in June 2021.

Neos Networks: SSE's remaining 50% share in the Telecoms business Neos Networks Limited recorded an adjusted operating loss of £(32.3)m compared to £(39.8)m in the prior year, reflecting planned losses incurred to support future business growth, and a reported operating loss of £(116.1)m compared to a loss of £(56.0)m in the prior year.

The reported result in the current year includes an exceptional impairment of £(73.6m), reflecting the wide range of reasonably probable valuations for this business.

Corporate Unallocated: Adjusted operating loss of £(88.8)m compares against a loss of £(87.0)m in the prior year. The result reflects lower revenue recovered from disposed businesses following the cessation of transitional service contracts established as part of the strategic disposal programme completed in 2022, which have been offset by gains on disposal of £9m, and the unwind of liabilities associated with financial and performance guarantees.

Reported operating losses rose from £(26.8)m in the prior year to £(94.1)m, with the prior year benefiting from a £50.5m positive revaluation adjustment on legacy Gas Production decommissioning provisions relative to a £(9.9)m downward adjustment to the same provision in the current year. This is partially offset by an exceptional credit of £4.6m relating to the reacquisition of Enerveo Limited - the Contracting and Rail business that was previously sold by SSE in June 2021. SSE is currently conducting a review to develop and then implement a longer-term strategy for each part of the Enerveo business. Further details of the transaction are contained in the Summary Financial Statements.

Adoption of IFRS 17 "Insurance Contracts"

On 1 April 2023, the Group adopted IFRS 17 'Insurance Contracts' on a modified retrospective basis from the earliest period presented.

The Group provides guarantees in respect of certain activities of former subsidiaries and to certain current joint venture investments. Prior to adoption of IFRS 17, these contracts were designated as insurance contracts under IFRS 4 'Insurance Contracts' ('IFRS 4'). Under IFRS 4, existing accounting practices were grandfathered and the contracts were treated as contingent liabilities until such time as it became probable the Group would be required to make payment to settle the obligation. The adoption of IFRS 17 from 1 April 2022 resulted in a reassessment of these contracts and the Group elected to apply the valuation principles of IFRS 9 to these contracts. Adoption resulted in the recognition of financial guarantee liabilities of £54.9m; a £22.7m increase in equity investments in joint ventures and associates; and a £32.2m adjustment to retained earnings. On 1 September 2022, the Group acquired a 50% joint venture investment in Triton Power Holdings Limited ('Triton') and provided parent company guarantees to Saltend Cogeneration Company Limited, a subsidiary of Triton. In the comparative year to 31 March 2023, the Group has therefore recognised a further £16.0m increase to the Group's financial guarantee liabilities to reflect this guarantee and a £16.0m increase to the Group's equity investment in Triton.

Adjusted Earnings per share

To monitor its financial performance over the medium term, SSE reports on its adjusted earnings per share measure. This measure is calculated by excluding the charge for deferred tax, interest on net pension liabilities, exceptional items, depreciation on fair value adjustments, revaluation adjustments to the retained 60% Gas Production decommissioning obligation, results attributable to non-controlling interest holders and the impact of certain remeasurements.

SSE's adjusted EPS measure provides an important and meaningful measure of underlying financial performance. In adjusting for these items, adjusted EPS reflects SSE's internal performance management, avoids the volatility associated with mark-to-market IFRS 9 remeasurements and means that items deemed to be exceptional due to their nature and scale do not distort the presentation of SSE's underlying results. For more detail on these please refer to the Adjusted Performance Measures section of this statement.

In the twelve months ended 31 March 2024, SSE's adjusted earnings per share was 158.5p. This compares to 166.0p for the previous year and reflects the movements in adjusted operating profit outlined in the section above in addition to lower year-on-year net finance costs which were largely offset by higher taxation charges and coupon payments on hybrid bonds as set out in the Supplemental Financial Information section below.

financial outlook - 2024/25 and beyond

FINANCIAL OUTLOOK for 2024/25

SSE continues to focus on delivering long-term sustainable financial performance through implementation of its five-year NZAP Plus capex plan. And whilst energy prices have normalised from the highs seen over the last 24 months, SSE remains confident that its balanced business mix will continue to deliver strong and sustainable operating profit over the coming years.

In line with historical practice, and consistent with the approach taken before the period of extreme market volatility seen over the last couple of years, SSE is not providing full earnings guidance for 2024/25 at this stage of the financial year reflecting the inherent seasonality within its business. However, the Group has set out the following expectations for the forthcoming year:

· SSEN Transmission - It is expected that operating profit will be lower than the prior year as the taxation benefit from "full expensing" for qualifying capital expenditure is passed through to consumers through reduced tariffs. This is accompanied by an increase in the operational cost base as the business prepares to deliver over £20bn of capital investment in LOTI and ASTI projects over the rest of the decade.

· SSEN Distribution - It is anticipated that operating profit will be significantly higher than the prior year outturn, with the expected inflationary catch-up in tariffs expected to more than double operating profit.

· SSE Renewables - The c.30% increase in hedged prices during the year combined with additional volumes from key capital projects such as Seagreen (full year impact), Viking (operations expected in summer 2024) and Dogger Bank A (phased towards the end of the year) means that operating profits are expected to increase significantly year-on-year.

· SSE Thermal and Gas Storage - It is now expected that operating profit will be significantly lower than the prior year outturn, reflecting the continued normalisation of energy commodity prices seen in current forward price curves. However operating profit is expected to be higher than historical averages, and even with a low-case volatility scenario which limits the amount of extrinsic value the operating plant can capture, more than £200m.

· Energy Customer Solutions - It is expected that the stabilisation in customer margins seen through 2023/24 will continue into the 2024/25 financial year.

These expectations are subject to normal weather conditions, current market conditions and plant availability.

Following the rebase of the dividend to 60p for 2023/24, the 2024/25 financial year is expected to see the dividend increase by between 5 - 10%, in line with a commitment to aligning future dividends with SSE's ambitious growth profile.

Capital expenditure and investment in 2024/25 is expected to significantly increase to over £3bn, reflecting a ramping up of project delivery during the year, with the net debt to EBITDA ratio expected to be towards the lower end of the 3.5 - 4.0x targeted range.

Net Zero Acceleration Programme PLUS

Since releasing SSE's original Net Zero Acceleration Programme - or NZAP - in November 2021, energy market and wider economic disruption has amplified the shareholder and societal benefit that comes from a balanced energy business with a strategic focus aligned with the transition to net zero.

In an operating environment impacted by geopolitical conflict, abnormal meteorological patterns and economic volatility, SSE's purpose to provide energy needed today while building a better world of energy for tomorrow continues to enjoy broad political and societal consensus.

The progress made in delivery of a strategy that creates value for shareholders and society in a sustainable way by developing, building, operating and investing in the electricity infrastructure and businesses needed in the transition to net zero, coupled with growing momentum behind the global green transition, saw SSE upgrade the targets, ambitions and investment mix twice in the 24 months since the original NZAP was released.

NZAP Plus - an upweighted £20.5bn Five Year Investment Programme

SSE's strategy is built on the knowledge that the three pillars of networks, renewables and flexibility will be the foundations of the future energy system. The optionality and balance of the Group's business mix means that investment will pivot across the value chain, reacting to visibility of growth opportunities as well as relative attractiveness of returns. As ever, this optionality will be exercised in line with SSE's commitment to rigorous capital discipline.

The update to the NZAP presented in May 2023 reflected the strong progress made in delivering the original investment plan, whilst recognising the impact from a changing macroeconomic environment. And, in November 2023, the Group announced a further revision to increase its investment programme as a result of the increased visibility over the scale of investment opportunities available to SSEN Transmission.

This increase, which will now see the Group invest around £20.5bn over the five years to 2026/27, has the effect of upweighting the proportion of regulated electricity networks spend as outlined below:

Investment Plan (5 years)	NZAP (Nov 2021)	NZAP+ (May 2023)	NZAP+ Nov 23 update
Total adjusted investment	~£12.5bn	~£18.0bn	~£20.5bn
- Electricity networks	~40%	~50%	~55%
- Market based	~60%	~50%	~45%

Following this increase, SSE anticipates the investment will be focused on:

· SSEN Transmission (~37% or ~£7.5bn) to continue to comprise the majority of expected investment in regulated electricity networks. With the RIIO-T2 baseline investment programme continuing at pace, there is ever increasing visibility over incremental investment across three Large Onshore Transmission Investment ('LOTI') projects that have received approval of need from Ofgem, in addition to the early construction costs required for the eight Accelerated Strategic Transmission Investment ('ASTI') framework projects. These eleven projects - which are currently estimated to require a gross nominal investment of c.£20bn to deliver by 2030 - continue to progress and are expected to drive gross RAV for this business to at least £10bn by the end of 2026/27.

· SSEN Distribution (~17% or ~£3.5bn) remains on track to deliver its £3.6bn RIIO-ED2 investment programme. This baseline investment - alongside growth opportunities from Uncertainty Mechanisms which are already being secured - is expected to increase gross RAV to between £6 - 7bn by the end of 2026/27.

· SSE Renewables (~34% or ~£7bn) is continuing to deliver on its ambitious construction programme, with critical milestones achieved in the year such as full power from Seagreen offshore wind farm and first power from Dogger Bank offshore wind farm. Whilst the target to reach around 9GW of installed capacity by 2026/27 remains, the business continues to focus on financial discipline and selective renewables growth only where it is value accretive. With that focus, the allocation of capital continues to move across a diverse mix of renewable technologies such as battery storage projects where almost 700MW of capacity is currently in operation or under construction.

· SSE Thermal and other businesses (~12% or ~£2.5bn) comprise the remaining expected investment, with SSE Thermal's pipeline of lower-carbon generation projects - such as sustainable biofuels, carbon capture and ultimately hydrogen - continuing to make progress over the last 12 months.

With around 90% of the upweighted investment plan expected to be invested in electricity networks and renewables, the substantial majority is focused on climate solutions to achieve SSE's 2030 Goals which are linked to its most highly-material UN Sustainable Development Goals (SDGs) and aligned to the Technical Screening Criteria of the EU Taxonomy.

Fully-funded investment plan, with continued strong balance sheet
SSE has demonstrated its ability to realise value from disposals, create sustainable earnings growth and raise capital at highly attractive terms. In the current period, £1.1bn of long-term debt was issued at attractive, fixed coupons.

The Group's business mix, capital investment and funding plans are designed to ensure that it retains an investment grade credit rating which provides capacity to reach a 4.5x net debt / EBITDA ratio.

And the financial strength of the Group and continued earnings growth means that it expects to still be within or below the target range of 3.5 - 4.0x net debt / EBITDA over the course of the plan to 2026/27.

Maintaining disciplined investment and returns
SSE maintains its focus on allocating capital based on clear internal investment criteria intended to maximise investment returns whilst ensuring delivery of its strategy.

Against the backdrop of a changing macroeconomic environment, SSE remains fully committed to its disciplined approach of focusing investment on high-quality assets where its capabilities can deliver favourable risk-adjusted project returns, namely continuing to target:

· Solar: returns between 50-300 bps over WACC for unlevered projects, depending on the balance of merchant, technology and construction risk for each project;

· Onshore wind: returns between 100-300 bps over WACC for unlevered projects, also depending on the balance of merchant, technology and construction risk for each project;

· Offshore wind: more than 11% equity returns (excluding developer profits but including seabed lease fees) for project financed developments;

· Networks: between 7 - 9% return on equity assuming a level of outperformance, CPIH inflation of 2% p.a. and an average gearing ratio of 60%; and

· Emerging technologies (principally Batteries, CCS and Hydrogen): between 300-500 bps over WACC for unlevered projects, reflecting the expected increased operating and technology risk from newer, first-of-a-kind technologies.

These investment criteria - and targeted returns - continue to be applied in both domestic and overseas markets.

Updating segmental earnings guidance to 2026/27

The enhanced NZAP Plus capex plan was first announced in a period of extreme market volatility which saw individual businesses such as SSE Thermal and Gas Storage successfully navigate rapidly changing market condition. Whilst the market has begun to normalise, the strength and resilience of our balanced mix of businesses means we continue to have confidence in the long term earnings growth for the Group.

Taking into account the current forward price curves as well as progress made on key capital projects, we therefore set out the following updated expectations for segmental earnings to 2026/27:

· SSEN Transmission - The upweighting of investment towards Networks is also expected to upweight the adjusted operating profits (net of 25% Non-Controlling Interest) to more than £500m per annum on average across the five-year plan. The profile of earnings growth is expected to largely follow the profile of increased capital expenditure as the business receives an upfront revenue benefit through the regulatory mechanism.

· SSEN Distribution - In line with previous expectations, and reflecting the predictability of the regulatory businesses, we continue to expect to deliver expected adjusted operating profits of around £450m per annum on average across the five-year plan.

· SSE Renewables - Reflecting a lower baseload power price assumption for 2026/27 of c.£65/MWh, this business is now forecast to deliver a ~19% adjusted profit CAGR across the five-year plan, subject to weather and plant availability.

· SSE Thermal and Gas Storage - Following the continued normalisation of energy commodity prices seen in current forward price curves, it is now expected that the existing efficient, flexible thermal fleet will deliver adjusted operating profits of around £400m on average for the four financial years to 2026/27. The profile of earnings are expected to significantly rise towards the end of the plan, reflecting the upweighted revenue from contracted and index linked Capacity Market payments which are expected to increase by ~2.5x from 2024/25 to 2026/27.

· Energy Customer Solutions - Following an extended period of challenging conditions with a global pandemic followed by the extreme commodity price volatility, the stabilisation in margins seen during 2023/24 for the SSE Business Energy and SSE Airtricity businesses are expected to continue throughout the medium term.

Reaffirming expected earnings growth and dividend plan
Taking account of the Group's latest view of renewables and networks project delivery out to 2026/27, in addition to the normalisation of market prices seen over the course of the last few months, SSE continues to have confidence in reaching its 175 - 200p adjusted earnings per share guidance range for 2026/27. The increased visibility over investment through regulatory approvals for network upgrades, the progress made on the 2.8GW of renewable projects under construction and the extension of "full expensing" capital allowances more than offset the current nomalisation of market prices.

This view assumes a ~£65/MWh nominal baseload power price for renewable output in 2026/27; no assumed developer profits on project sell-downs; normal weather and plant availability; a ~4.5% average cost of debt across the plan which in turn assumes a 5.5% coupon on new debt issuance; and a ~12% average effective tax rate across the five-year plan.

Reflecting the SSE plc Boards' confidence in delivering this future earnings growth, the commitment to target dividend increases of between 5 to 10% per year across 2024/25, 2025/26 and 2026/27 - following the rebase to 60 pence per share in 2023/24 - remains unaffected. This plan retains the scrip dividend option for shareholders, with the cap on take-up still set at 25% and implemented (if necessary) by means of a share buy-back.

Supplemental financial information

Adjusted Investment and Capex Summary	Mar 2024 Share %	Mar 2024 £m	Mar 2023 £m
SSEN Transmission (excluding 25% MI from 1 Dec 2022)	24%	595.6	495.5
SSEN Distribution	21%	505.1	421.0
Regulated networks total	45%	1,100.7	916.5

SSE Renewables	45%	1,097.1	911.5

SSE Thermal	4%	99.6	153.2
Gas Storage	-	0.8	6.3
Thermal Energy Total	4%	100.4	159.5

Energy Customer Solutions	2%	58.5	49.8

SSE Energy Markets (formerly Energy Portfolio Management)	-	8.6	4.7

SSE Enterprise (formerly Distributed Energy)	2%	51.0	50.3

Corporate unallocated	2%	60.4	68.3

Adjusted investment and capital expenditure	100%	2,476.7	2,160.6

Acquisitions		-	642.7

Adjusted investment, capital and acquisitions expenditure		2,476.7	2,803.3

Note: 2022/23 segmental numbers above restated to reflect movement of Solar and Battery business to SSE Renewables and Building Energy Management Systems to SSE Business Energy, both previously reported under SSE Enterprise

SSE'S Capital Expenditure Programme

During the 12 months to 31 March 2024, SSE's adjusted investment, capital and acquisitions expenditure totalled £2,476.7m, compared to £2,803.3m in the same period last year. The reduction is driven largely by prior period acquisition expenditure relating to the purchase of the Southern European onshore wind development platform, and the acquisition of Triton Power Holdings, in separate transactions which both completed on 1 September 2022.

Investment in the reporting period was driven mainly by SSE's renewables and electricity networks divisions, with limited deployment of capital in thermal and other businesses, and no acquisitions expenditure.

In SSEN Transmission, £595.6m net capex was delivered, including £102m on the final stages of the Shetland connection with offshore works now complete and the project in the final commissioning phase. The East Coast Upgrade to 400kV also progressed well with a further £117m invested during the period, which sees the first of three phases complete and successfully energised. A further £41m was also invested as part of the Eastern Green Link 2 and 3 preliminary works.

The first year of SSEN Distribution's RIIO-ED2 saw capex increase by 20% to £505.1m, with a continued focus on network resilience and future proofing for the expected consumer-led uptake in low-carbon technology. £210m of this was delivered in the North in a wide variety of projects with £53m of this invested in subsea cables, including the Pentland Firth East cable which energised during the period. In the South, £295m of capex was delivered during the period across a broad range of projects, with significant investment in Bramley Thatcham and Iver Reinforcement.

SSE Renewables invested a total of £1,097.1m during the period, including £219m on Viking onshore wind farm on Shetland, where all turbines have now been installed and commercial operations are expected in Summer 2024. In Ireland, £90m of capex was delivered on the construction of the 101MW Yellow River wind farm, which is targeting commissioning in early 2025. In the North Sea, Seagreen offshore wind farm reached commercial operations in October 2023 and £86m equity was drawn down to fund the final stages of construction. £158m of combined equity and shareholder loans were drawn to fund construction works which are under way at Dogger Bank A, which has previously been funded by non-recourse project financing in the Joint Venture.

In SSE Thermal, investment totalled £100.4m in the period, £30m of which was incurred on Slough Multifuel station, a joint venture with CIP, which achieved first fire in March 2024.

SSE's Hedging Position at 31 March 2024

SSE has an established approach to hedging through which it generally seeks to reduce its broad exposure to commodity price variation at least 12 months in advance of delivery. SSE continues to monitor market developments and conditions and alters its hedging approach in response to changes in its exposure profile.

A summary of the hedging position for each of SSE's market-based businesses is set out below.

SSE Renewables - GB wind and hydro:

Energy output hedges are progressively established through the forward sale of either:

· Electricity - where market depth and liquidity allows;

· Gas and carbon equivalents - recognising that spark spread exposures remain; or

· Gas equivalents only - recognising that carbon and spark spread exposures remain.

This approach was developed in response to lower levels of available forward market depth and liquidity for certain energy products. Whilst some basis risk or commodity exposure will remain under this approach, it does facilitate the reduction of SSE Renewables' overall exposure to potentially volatile spot market outcomes.

For transparency, the table below notes both the proportion of hedges and prices of those hedges for electricity and equivalents (i.e. where gas and carbon equivalents have been hedged) and for gas alone (i.e. where the carbon leg has been unable to be hedged).

	2023/24	2024/25	2025/26	2026/27
Wind
Total energy output volumes hedged - TWh	5.5	6.4	5.2	1.5
- Hedge in electricity & equivalents - TWh	5.5	4.1	2.0	0.7
- Electricity hedge price - £MWh	£75	£91	£93	£80
- Hedge in Gas - TWh	-	2.3	3.2	0.8
- Gas hedge price - £MWh	-	£122	£77	£56

Hydro
Total energy output volumes hedged - TWh	3.0	2.9	1.9	0.6
- Hedge in electricity & equivalents - TWh	3.0	1.8	0.6	0.2
- Electricity hedge price - £MWh	£86	£96	£90	£74
- Hedge in Gas - TWh	-	1.1	1.3	0.4
- Gas hedge price - £MWh	-	£120	£82	£56

Note: where gas and carbon trades have been used as a proxy for electricity, a constant 1 MWh:69.444 th and 1MWh:0.3815 te/MWh conversion ratio between commodities has been applied. These same ratios have been used to convert underlying commodity prices into electricity £MWh and therefore no assumptions have been made on either spark or carbon.

The table excludes additional volumes and income for Balancing Mechanism activity, ROCs, ancillary services, capacity mechanism and shape variations and optimisations. It also excludes volumes and income relating to Irish wind output, pumped storage and CfDs.

The hedged volumes include SSE's equity share of forecast pre-CFD volumes from Seagreen offshore wind farm and Viking onshore wind farm. No volumes have been included for Dogger Bank offshore wind farm as hedging for this asset has not yet commenced.

For renewable energy output, SSE's established approach seeks to minimise the volumetric downside risk by targeting a hedge of less than 100% of its anticipated wind energy output for the coming 12 months. The targeted hedge percentage is reviewed and adjusted as necessary to reflect any changes in market and wind capture insights. The last such revision occurred in September 2023, setting a baseline target hedge of around 80% of the anticipated energy output from wind and hydro for the coming twelve months from that date.

Energy output hedges for both wind and hydro are progressively established over the 36 months prior to delivery (although the extent of hedging activity for future periods also depends on the level of available market depth and liquidity).

Target hedge levels are achieved through the forward sale of either electricity or a combination of gas or carbon equivalents as outlined above. When gas-and-carbon hedges are converted into electricity hedges a "spark spread" is realised which can lead to changes in the average hedge price expected. This can increase the previously published average hedge price or decrease it. Likewise, when gas hedges are subsequently converted into electricity hedges ahead of delivery, a carbon-and-spark spread value is realised which will also lead to changes in the average hedge price expected.

GB Thermal: In the 6 months prior to delivery, SSE aims to hedge all of the expected economic output of its CCGT assets, having progressively established this hedge over the 18 months prior to delivery.

This hedging approach is adjusted to take into account any changes in exposures as a result of current market conditions, such as the plant availability exposure, counterparty credit risk, and changes to cost of capital for collateral.

Hedging activity also depends on the availability of sufficient market depth and liquidity, which can be limited, particularly for periods further into the future.

Gas Storage: The assets are being commercially operated to optimise value arising from changes in the spread between summer and winter prices, market volatility and plant availability.

At 31 March 2024, 40 mTh of gas inventory was physically held which represents c.21% of SSE's share of gross capacity (at 31 March 2023, 126mTh of gas inventory representing c.65% of SSE's share of gross capacity).

SSE Business Energy: The business supplies electricity and gas to business and public sector customers. Sales to contract customers are hedged: at point of sale for fixed contract customers; upon instruction for flexi contract customers; and on a rolling hedge basis for tariff customers.

Given the pricing and macro-economic context, SSE Business Energy is dynamically monitoring nearer term consumption actuals for early signs of demand variability and adjusting future volumes hedged accordingly.

SSE Energy Markets: This business provides the route to market and manages the execution for all of SSE's commodity trading outlined above (spark spread, power, gas, oil and carbon). This includes monitoring market conditions and liquidity and reporting net Group exposures. The business operates under strict position limits and VAR controls.

There is some scope for position-taking to permit this business to manage around shape and liquidity whilst taking optimisation opportunities. This has been contained within a total daily VAR limit of £5m, which will be increased to £9m from 1 April 2024 to reflect growing optimisation opportunities as the SSE portfolio expands.

Ireland: Vertical integration of the generation and customer businesses in Ireland limits the Group's commodity exposure in that market.

Summarising movements on exceptional items
and certain remeasurements

Exceptional items

In the year ended 31 March 2024, SSE recognised a net exceptional charge within continuing operations of £(266.0)m before tax. The following table provides a summary of the key components making up the net charge:

Exceptional credits / (charges) within continuing operations	Total £m
Triton Power impairment	(63.2)
Gas Storage impairment	(134.1)
Neos Networks impairment	(73.6)
Enerveo reacquisition (previously SSE Contracting)	4.6
Other	0.3
Total exceptional charge	(266.0)

Note: The definition of exceptional items can be found in Note 4.2 of the Summary Financial Statements.

For a full description of exceptional items, see Note 7 of the Summary Financial Statements.

Certain remeasurements

In the year ended 31 March 2024, SSE recognised a favourable net remeasurement within continuing operations of £513.5m before tax. The following table provides a summary of the key components making up the favourable movement:

Certain remeasurements within continuing operations	Total £m
Operating derivatives (including share from jointly controlled entities net of tax)	498.3
Commodity stocks held at fair value	9.1
Financing derivatives	6.1
Total net favourable remeasurement	513.5

Operating derivatives

SSE enters into forward purchase contracts (for power, gas and other commodities) to meet the future demands of its energy supply businesses and to optimise the value of its generation assets. Some of these contracts are determined to be derivative financial instruments under IFRS 9 and as such are required to be recorded at their fair value as at the date of the financial statements.

SSE shows the change in the fair value of these forward contracts separately as this mark-to-market movement does not reflect the realised operating performance of the businesses. The underlying value of these contracts is recognised as the relevant commodity is delivered, which for the large majority of the position at 31 March 2024 is expected to be within the next 6 - 18 months.

The change in the operating derivative mark-to-market valuation was a £498.3m positive movement from the start of the year, reflecting a £452.2m positive movement on fully consolidated operating derivatives combined with a £46.1m share of positive movement on derivatives in jointly controlled entities (net of tax) driven by commodity contract revaluations.

The positive movement of £452.2m on fully consolidated operating derivatives includes:

· Settlement during the year of £1,025.3m of previously net "out-of-the-money" contracts in line with the contracted delivery periods; and

· An adverse net mark-to-market remeasurement of £(573.1)m on unsettled contracts including affiliate CfDs, largely entered into during the course of 2022/23 and 2023/24 and in line with the Group's stated approach to hedging. This mark-to-market remeasurement - which compares to a £(2,980.2)m adverse movement in the prior period - reflects the reduced volatility seen in commodity markets during the year.

As in prior years, the reported result does not include remeasurement of 'own use' hedging agreements which do not meet the definition of a derivative financial instrument under IFRS 9 "Financial Instruments".

Commodity stocks held at fair value

Gas inventory purchased by the Gas Storage business for secondary trading opportunities is held at fair value with reference to the forward month market price. The £9.1m favourable movement in the year reflects the combination of a higher forward market price at the period end when compared to the actual weighted average cost of gas stored at that time and the decrease in the amount of gas physically held.

However, whilst this movement reflects the net change in fair value of physical gas inventory held at the period end, it does not take into account any positive or negative mark-to-market movement on forward contracted sales. Therefore, similar to derivative contracts held at fair value, SSE does not expect that this valuation movement will reflect the final result realised by the business.

Financing derivatives

In addition to the movements above, a positive movement of £6.1m was recognised on financing derivatives in the year ended 31 March 2024, including mark-to-market movements on cross-currency swaps and floating rate swaps that are classed as hedges under IAS 39. These hedges ensure that any movement in the value of net debt is predominately offset by a movement in the derivative position. The recognised gain reflects a slight increase in the UK long term interest rates which means that the net "out of the money" position on these hedges has reduced slightly during the year.

These remeasurements are presented separately as they do not represent underlying business performance in the year. The result on financing derivatives will be recognised in adjusted profit before tax when the derivatives are settled.

Reported profit before tax and earnings per share

Taking all of the above into account, reported results for the twelve months to 31 March 2024 are significantly higher than the previous year. In addition to the £513.5m net gain on forward commodity, gas inventory and financing derivative fair value remeasurements and the £(266.0)m net pre-tax exceptional charge noted above - reported results also include, primarily, £26.2m of interest income on the net pension asset; £134.4m share of profits attributable to non-controlling interests; a £(9.9)m adjustment to legacy gas production decommissioning provisions; £(19.0)m depreciation on fair value uplifts; and a £(74.1)m share of joint venture interest and tax.

Reported results in the prior period reflected pre-tax certain re-measurement losses of £(2,351.9)m mainly driven by the significant volatility in commodity markets in the prior period, as well as pre-tax exceptional items of £(0.4)m reflecting various offsetting impairments, asset write-ups and a gain on sale, and £16.2m net interest income on the net pension asset.

Financial management and balance sheet

Debt metrics	Mar 2024 £m	Sep 2023 £m	Mar 2023 £m
Net Debt / EBITDA*	3.0x	N/A	2.7x
Adjusted net debt and hybrid capital (£m)	(9,435.7)	(8,943.8)	(8,894.1)
Average debt maturity (years)	6.4	5.9	6.4
Adjusted interest cover	8.9x	3.9x	7.6x
Average cost of debt at period end (including all hybrid coupon payments)	3.90%	4.02%	3.92%

* Note: Net debt represents the group adjusted net debt and hybrid capital. EBITDA represents the full year group adjusted EBITDA, less £179.6m at March 2024 (March 2023: £146.9m) for the proportion of adjusted EBITDA from equity-accounted Joint Ventures relating to project financed debt.

Net finance costs reconciliation	Mar 2024 £m	Mar 2023 £m
Adjusted net finance costs	251.7	345.6
Add/(less):
Lease interest charges	(25.8)	(29.4)
Notional interest arising on discounted provisions	(25.2)	(22.1)
Hybrid equity coupon payment	73.1	38.8
Adjusted finance costs for interest cover calculation	273.8	332.9

Principal Sources of debt funding	Mar 2024	Sep 2023	Mar 2023
Bonds	58%	54%	54%
Hybrid debt and equity securities	18%	18%	18%
European investment bank loans	5%	5%	5%
US private placement	8%	8%	10%
Short-term funding	8%	11%	9%
Index -linked debt	3%	4%	4%
% of which has been secured at a fixed rate	93%	91%	92%

Rating Agency	Rating	Criteria	Date of Issue
Moody's	Baa1 'stable outlook'	'Low teens' Retained Cash Flow/Net Debt	19 December 2023
Standard and Poor's	BBB+ 'outlook positive'	About 18% Funds From Operations/Net Debt	5 September 2023

Maintaining a strong balance sheet

A key objective of SSE's long-term approach to balancing capital investment, debt issuance and securing value and proceeds from disposals is by maintaining a strong net debt/EBITDA ratio. SSE calculates this ratio based on a methodology that it believes best reflects its activities and commercial structure, in particular its strategy to secure value from partnering by using Joint Ventures and non-recourse project financing.

SSE considers it has the capacity to reach a ratio of up to around 4.5x, comparable with private sector utilities across Europe, whilst remaining above the equivalent ratios required for an investment grade credit rating.

Given the strength of the Group's Balance Sheet, the current net debt/EBITDA ratio is well below this threshold at 3.0x. However it is expected that this ratio will trend upwards to around 4.0x, as the Group delivers on its £20.5bn investment plan to 31 March 2027.

SSE's Standard and Poor's credit rating was re-affirmed in September 2023 at BBB+ with 'outlook positive' and its Moody's rating was reaffirmed in December 2023 at Baa1 with 'stable outlook'.

Adjusted net debt and hybrid capital

SSE's adjusted net debt and hybrid capital was £9.4bn at 31 March 2024, an increase of £0.5bn from 31 March 2023. With no significant acquisitions or divestments in the period, the debt movement relates to capital investment expenditure and revaluation of currency debt as well as various working capital movements being offset by operating cash flows less dividend payments.

Debt summary as at 31 March 2024

The Group issued £1.1bn of new long-term debt in the financial year whilst also continuing to roll Commercial Paper at a broadly similar level as 31 March 2023:

· In September 2023, SSE plc issued an 8 year €750m green bond at a fixed coupon of 4.0% with an all-in cost of funding rate of just above 4% once fees have been included. The bond was left in Euros as a net investment hedge for the Group's Euro denominated subsidiaries.

· In January 2024, Scottish Hydro Electric Transmission plc issued a 20 year £500m green bond at a fixed coupon of 5.5% with an all-in funding cost of 5.575% once fees have been included.

· Over the course of the year, SSE plc rolled maturing short-term debt which takes the total outstanding Commercial Paper at 31 March 2024 to €990m (£852m). Commercial Paper has been issued in Euros and swapped back to Sterling at an average cost of debt of 5.75% and matures between April 2024 and May 2024.

In the year ended 31 March 2024, £0.7bn of medium-to-long-term debt has matured comprising £155m of US Private Placements which matured in April 2023 and September 2023, €700m (£514m) of Eurobonds which matured in September 2023 and £50m of European Investment Bank fixed rate loans which matured in September 2023.

Over the next financial year, there is a further £0.2bn of medium-to-long-term debt maturing being the £204m US Private Placement maturing in April 2024. As noted above, €990m (£852m) of short-term debt in the form of Commercial Paper is also due to mature in the first half of 2024/25, however the current intention is to roll this maturing short-term debt forward throughout the 2024/25 financial year.

Hybrid bonds summary as at 31 march 2024

Hybrid bonds are a valuable part of SSE's capital structure, helping to diversify SSE's investor base and most importantly to support credit rating ratios, as their 50% equity treatment by the rating agencies is positive for SSE's credit metrics.

A summary of SSE's hybrid bonds as at 31 March 2024 can be found below:

Issued	Hybrid Bond Value¹	All in rate²	First Call Date	Accounting Treatment
July 2020	£600m	3.74%	Apr 2026	Equity accounted
July 2020	€500m (£453m)	3.68%	July 2027	Equity accounted
April 2022	€1bn (£831m)	4.00%	Apr 2028	Equity accounted

¹ Sterling equivalents shown reflect the fixed exchange rate on date of receipt of proceeds and is not subsequently revalued.

² All in rate reflects coupon on bonds plus any cost of swap into sterling which currently only applies to July 2020 Hybrid.

Further details on each hybrid bond can be found in Note 14 to the Summary Financial Statements and a table noting the amounts, timing and accounting treatment of coupon payments is shown below:

Hybrid coupon payments	2024/25		2023/24
	HYe	FYe	HYa	FYa
Total equity (cash) accounted	£73m	£73m	£73m	£73m
Total debt (accrual) accounted	-	-	-	-
Total hybrid coupon	£73m	£73m	£73m	£73m

SSE's July 2020 and April 2022 hybrid bonds are perpetual instruments and are therefore accounted for as part of equity within the Summary Financial Statements but, consistent with previous years, have been included within SSE's 'Adjusted net debt and hybrid capital' to aid comparability.

The coupon payments relating to the equity accounted hybrid bonds are presented as distributions to other equity holders and are reflected within adjusted earnings per share when paid.

Managing net finance costs

SSE's adjusted net finance costs - which included interest on debt accounted hybrid bonds but not equity accounted hybrid bonds - were (£251.7m) in the year ended 31 March 2024, compared to (£345.6m) in the previous year. The lower level of finance costs in the year is driven by lower swap interest arising from higher short term interest rates on fixed rate swaps, the impact of lower inflation on index linked debt, and higher capitalised interest costs reflecting increasing construction activity. These were partially offset by a higher share of JV costs, predominantly due to Seagreen becoming fully operational during the year.

Reported net finance costs were (£113.1m) compared to (£59.3m) in the previous period. Higher interest charges incurred in Joint Ventures combined with a £195.8m decrease in beneficial movement on financing derivatives as previously referenced more than offset the reduction seen in adjusted net finance costs.

Summarising cash and cash equivalents

At 31 March 2024, SSE's adjusted net debt included cash and cash equivalents of £1.0bn, which is slightly higher than the £0.9bn at March 2023.

The cash collateral balance at 31 March 2024 was a net liability of £353.2m, consisting of a liability of £362.5m and an asset of £9.3m (2023: £nil liability and £316.3m asset). This reflects the lower levels of initial margin required for commodity contracts traded on exchanges following a reduction in risk factors and the Group replacing cash collateral with £100m of letters of credit. Additionally, variation margin positions for March 2024 have moved to being 'in the money' due to lower commodity prices versus the 'out the money' positions experienced in the prior year.

Cash collateral is only required for forward commodity contracts traded through commodity exchanges and comprises an 'initial margin' element based on the size and period of the trade and a 'variation margin' element which will change from day to day depending on the fair value of that trade each day. The level of cash collateral either provided or received therefore depends on the volume of trading through the exchanges, the periods being traded and the associated price volatility. As collateral is only required on a portion of trades, the movement in collateral provided or received will not correlate to the IFRS 9 fair value movement recognised, which also only covers a portion of the total Group trading activity. The decrease in cash collateral reflects the lower forward power and gas price environment, alongside reduced-price volatility in those markets.

Revolving Credit Facility / SHORT-TERM FUNDING

SSE has £3.5bn of committed bank facilities in place to ensure the Group has sufficient liquidity to allow day-to -day operations and investment programmes to continue in the event of disruption to Capital Markets preventing SSE from issuing new debt for a period of time. These facilities are set out in the table below.

Date	Issuer	Debt type	Term	Value
Mar 19	SSE plc	Syndicated Revolving Credit Facility with 10 Relationship Banks	2026	£1.3bn
Oct 19	SSE plc	Revolving Credit Facility with Bank of China	2026	£200m
Nov 22	SHET plc	Syndicated Revolving Credit Facility with 11 Relationship Banks	2026	£750m
Nov 22	SHEPD plc and SEPD plc	Syndicated Revolving Credit Facility with 11 Relationship Banks	2026	£250m
Feb 23	SSE plc	Syndicated Revolving Credit Facility with 10 Relationship Banks	2025	£1.0bn

In November 2022, SSEN Transmission entered a three-year £750m facility, including two one-year optional extensions with the first year's option exercised in September 2023. A £250m facility on the same terms has been entered into by SSEN Distribution. These facilities support the ongoing capital expenditure investment programmes that are required to deliver their ambitious future growth plans and will be drawn on as required.

The £1bn facility signed in February 2023 (and subsequently extended for a further year in February 2024) was executed to cover potential cash collateral balances required to cover commodity positions on exchanges or via credit support annexes on bilateral contracts.

The facilities can also be utilised to cover short-term funding requirements - however they remain undrawn for most of the year and were undrawn as at 31 March 2024 (2023: £100m drawn on the £750m SHET plc facility).

The two SSE plc facilities totalling £1.5bn that mature in 2026 are classified as sustainable facilities with interest rate and fees paid dependant on SSE's performance in environmental, social and governance matters, as assessed independently by Moody's ESG Solutions. The £750m Transmission facility is also classified as a sustainable facility with interest rate and fees paid dependant on four ESG-related KPI's being achieved.

In addition to the above, a $300m private placement shelf facility exists with NY Life which can be drawn in approximately two equal tranches 12 months apart over the next three years. At 31 March 2024, no drawings have been made on this facility. The Group also has access to a £15m overdraft facility.

Maintaining a prudent Treasury policy

SSE's treasury policy is designed to be prudent and flexible. In line with that, cash from operations is first used to finance regulatory and maintenance capital expenditure and then dividend payments, with investment and capital expenditure for growth generally financed by a combination of cash from operations, bank borrowings and bond issuance.

As a matter of policy, a minimum of 50% of SSE's debt is subject to fixed rates of interest. Within this policy framework, SSE borrows as required on different interest bases, with financial instruments being used to achieve the desired out-turn interest rate profile. At 31 March 2024, 93% of SSE's borrowings were at fixed rates (2023: 91%).

Borrowings are mainly in Sterling and Euros to reflect the underlying currency denomination of assets and cash flows within SSE. All other foreign currency borrowings are swapped back into either Sterling or Euros.

Transactional foreign exchange risk arises in respect of procurement contracts, fuel and carbon purchasing, commodity hedging and energy portfolio management operations, and long-term service agreements for plant.

SSE's policy is to hedge any material transactional foreign exchange risks using forward currency purchases and/or financial instruments. Translational foreign exchange risk arises in respect of overseas investments; hedging in respect of such exposures is determined as appropriate to the circumstances on a case-by-case basis.

Ensuring a strong debt structure through medium- and
long-term borrowings

The ability to raise funds at competitive rates is fundamental to investment. SSE's fundraising over the past five years, including senior bonds, hybrid capital and term loans, now totals £5.8bn and SSE's objective is to maintain a reasonable range of debt maturities.

A key objective of the Group's NZAP Plus five-year investment plan is to strike the right balance between capital investment, long-term debt issuance and securing value through disposals, all whilst maintaining a strong net debt / EBITDA ratio. Whilst this investment will naturally require a level of incremental debt issuance - in addition to refinancing of existing debt - the Group considers the plan to be fully-funded given expected continued access to debt markets and with SSE retaining a strong investment grade credit rating.

At 31 March 2024, the average debt maturity, excluding hybrid securities, was 6.4 years, consistent with the position at 31 March 2023. This position reflects the £1.1bn of new long-term debt issued in the last year, which has been offset by maturing long term debt.

SSE's average cost of debt is now 3.90%, compared to 3.92% at 31 March 2023. The small decrease relates to higher swap income on fixed rate swaps due to higher floating rates in the period.

Going Concern

The Directors consider that the Group has adequate resources to continue in operational existence for the period to 31 December 2025. The summary financial statements are therefore prepared on a going concern basis.

In reaching their conclusion, the Directors regularly review the Group's funding structure (see note 13 of the Summary Financial Statements) against the current economic climate to ensure that the Group has the short- and long-term funding required. The Group has performed detailed going concern testing, including the consideration of cash flow forecasts under stressed scenarios for the period to December 2025.

The Group has an established €1.5bn Euro commercial paper programme (paper can be issued in a range of currencies and swapped into Sterling) and as at 31 March 2024 there was £840m commercial paper outstanding. In the year ended 31 March 2024, the Group has issued new long-term debt instruments totalling £2.0bn and has redeemed £0.7bn of maturing medium- long-term debt. The Group also continues to have access to its £3.5bn of revolving credit facilities. As at 31 March 2024 there were no drawings against these committed facilities. The details of the five committed facilities at 31 March 2024 are:

· a £1.3bn revolving credit facility for SSE plc maturing March 2026;

· a £0.2bn bilateral facility for SSE plc maturing October 2026;

· a £0.75bn facility for Scottish Hydro Electric Transmission plc maturing November 2026;

· a £0.25bn facility for Scottish Hydro Electric Power Distribution plc and Southern Electric Power Distribution plc maturing November 2026; and

· a £1.0bn committed facility for SSE plc maturing February 2025.

The £1.3bn revolving credit facility and £0.2bn bilateral facility are both in place to provide back-up to the commercial paper programme and support the Group's capital expenditure plans. The Transmission and Distribution related facilities, both of which have a further 1-year extension option at the borrower's discretion, were entered into to help cover the capital expenditure and working capital of those businesses. The one year extension option on the £1bn committed facility for SSE plc was exercised in February 2024, and was entered into to provide cover for potential cash collateral requirements if periods of extreme volatility return to the commodity markets. There were no drawings against these facilities at 31 March 2024 compared to £100m drawn on the £750m Transmission facility at 31 March 2023.

Operating a Scrip Dividend Scheme

SSE's Scrip Dividend Scheme was last renewed for a three-year period at the 2021 AGM and will be proposed for renewal for a further three-year period at the 2024 AGM. As part of the Group's dividend plan to 2026/27, it is intended that take-up from the Scrip Dividend Scheme will be capped at 25%. This cap would be implemented by means of a share repurchase programme, or 'buyback', in October each year following payment of the final dividend. The scale of any share repurchase program would be determined by shareholder subscription to Scrip Dividend Scheme across the full year, taking into account the interim and final dividend elections.

Following approval of the dividend at the Annual General Meeting on 20 July 2023, and receipt of the final dividend scrip elections on 24 August 2023, the overall scrip dividend take-up for the 2022/23 financial year was less than the 25% threshold and therefore no buy-back to limit scrip dilution was required.

SSE believes limiting the dilutive effect of the Scrip in this way strikes the right balance in terms of giving shareholders choice, potentially securing cash dividend payment savings and managing the number of additional shares issued.

SSE's principal joint ventures and associates

SSE's financial results include contributions from equity interests in joint ventures ("JVs") and associates, all of which are equity accounted. The details of the most significant of these are included in the table below. This table also highlights SSE's share of off-balance sheet debt associated with its equity interests in JVs which totals around £3.6bn as at 31 March 2024.

SSE principal JVs and associates¹	Asset type	SSE holding	SSE share of external debt	SSE Shareholder loans
Marchwood Power Ltd	920MW CCGT	50%	No external debt	£12m
Seabank Power Ltd	1,234MW CCGT	50%	No external debt	No loans outstanding
SSE Slough Multifuel Ltd	50MW energy-from-waste facility	50%	No external debt	£158m
Triton Power Holdings Ltd	1,200MW CCGT & 140MW OCGT	50%	No external debt	No loans outstanding
Beatrice Offshore Windfarm Ltd	588MW offshore wind farm	40%	£623m	Project financed
Dogger Bank A Wind Farm	1,200MW offshore wind farm	40%	£928m	£88m
Dogger Bank B Wind Farm	1,200MW offshore wind farm	40%	£785m	Project financed
Dogger Bank C Wind Farm	1,200MW offshore wind farm	40%	£619m	Project financed
Ossian Offshore Windfarm Ltd	ScotWind seabed	40%	No external debt	No loans outstanding
Seagreen Wind Energy Ltd	1,075MW offshore wind farm	49%	£661m	£995m²
Seagreen 1a Ltd	Offshore wind farm extension	49%	No external debt	£22m
Lenalea Wind Energy Ltd	30MW onshore wind farm	50%	No external debt	£14m
Clyde Windfarm (Scotland) Ltd	522MW onshore wind farm	50.1%	No external debt	£127m
Dunmaglass Windfarm Ltd	94MW onshore wind farm	50.1%	No external debt	£47m
Stronelairg Windfarm Ltd	228MW onshore wind farm	50.1%	No external debt	£89m
Cloosh Valley Wind Farm	105MW onshore wind farm	25%	No external debt	£25m
Neos Networks Ltd	Private telecoms network	50%	No external debt	£58m

Notes:

¹ Greater Gabbard, a 504MW offshore windfarm, is proportionally consolidated and reported as a Joint Operation with no loans outstanding.

² For accounting purposes, £309m of the £995m of SSE shareholder loans advanced to Seagreen Wind Energy Limited have been classified as equity.

Taxation

SSE is one of the UK's biggest taxpayers, and in the 2023 PwC Total Tax Contribution survey published in December 2023 was ranked 17th out of the 100 Group of Companies in 2023 in terms of taxes borne (those which represent a cost to the company, and which are reflected in its financial results).

SSE considers being a responsible taxpayer to be a core element of its social contract with the societies in which it operates and seeks to pay the right amount of tax on its profits, in the right place, at the right time. While SSE has an obligation to its shareholders, customers and other stakeholders to efficiently manage its total tax liability, it does not seek to use the tax system in a way it does not consider it was meant to operate or use tax havens to reduce its tax liabilities.

Under its social contract SSE has an obligation to the society in which it operates, and from which it benefits - for example, tax receipts are vital for the public services SSE relies upon. Therefore, SSE's tax policy is to operate within both the letter and spirit of the law at all times.

SSE was the first FTSE 100 company to be Fair Tax Mark accredited and has now been accredited for ten years. The group's overseas expansion presented the opportunity to move to Fair Tax Foundation's Global Multinational Business Standard Accreditation, which was launched in late 2021. SSE was the first company to transition from the UK headquartered accreditation to the global accreditation in 2022.

In November 2023, SSE published its 'Talking Tax 2023: tax matters for net zero' report. It did this because it believes building trust with stakeholders on issues relating to tax is important to the long-term sustainability of the business. SSE won PwC's Building Public Trust Award for Tax Reporting in the FTSE 350 for the second consecutive year for the quality of its tax reporting.

In the year to 31 March 2024, SSE paid £679.2m of profit taxes, property taxes, environmental taxes, and employment taxes in the UK, compared with £501.7m in the previous year. The increase in total taxes paid in 2023/24 compared with the previous year was primarily due to higher levels of corporation tax being paid on UK profits, together with higher employment taxes and property taxes due to the expansion of the Group's activities.

In the year to 31 March 2024 SSE also paid €68.0m of taxes in Ireland, compared to €53.8m the previous year, due to increased profits in SSE's Irish businesses and a general increase in business activities. Ireland is the only country outside the UK in which SSE currently has significant trading operations - activities elsewhere are still at an early stage and are not yet paying material amounts of tax.

As with other key financial indicators, SSE's focus is on adjusted profit before tax and, in line with that, SSE believes that the adjusted current tax charge on that profit is the tax measure that best reflects underlying performance. SSE's adjusted current tax rate, based on adjusted profit before tax, was 17.1%, compared with 16.4% in 2022/23 on the same basis. The increase in rate is primarily as a result of the increase in UK corporation tax rate from 19% to 25% from 1 April 2023, partly mitigated by increased capital allowances as noted below.

On 23 March 2023, the Group's case concerning the availability of capital allowances on Glendoe Hydro Electric Station was heard at the Supreme Court. On 17 May 2023, the Supreme Court released its decision, which rejected HMRC's appeal in full. The matter is now concluded and is not subject to further appeal.

The adoption during the period of the "Deferred Tax related to Assets and Liabilities arising from a Single Transaction" amendment to IAS 12 "Income Taxes" resulted in an increase of £50.1m (2023: £45.5m) to the Group's gross deferred tax assets and gross deferred tax liabilities recognised in relation to the Group's decommissioning obligations and a reclassification between deferred tax categories of £79.5m. Adoption had no impact on retained earnings or profits recognised in presented periods.

The UK Spring Budget in March 2023 introduced "full expensing" for qualifying capital expenditure incurred during the period from 1 April 2023 to 31 March 2026, that measure then being made permanent in the November 2023 Autumn Statement. Capital allowances rates of 100% and 50% replace the existing rates of 18% and 6% respectively for qualifying capital expenditure, significantly increasing the amount of capital allowances available on SSE's capital investment programme.

The UK has now introduced legislation in respect of Multinational Top-up Tax in line with OECD BEPS pillar 2 principles. The Group has applied the exemption from recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes as required by the amendments to IAS 12 - International Tax Reform-Pillar Two Model Rules, which were issued in May 2023.The legislation will come into force for the year ended 31 March 2025. Similar draft legislation has been introduced in the Republic of Ireland and other EU jurisdictions. The Group has undertaken modelling and does not expect a material impact to arise as tax rates, including deferred tax, in the countries in which the Group operates are expected to exceed 15%.

Pensions

Contributing to employees' pension schemes - IAS 19	March 24 £m	March 23 £m
Net pension scheme asset recognised in the balance sheet before deferred tax £m	421.6	541.1
Employer cash contributions Scottish Hydro Electric scheme £m	1.0	1.0
Employer cash contributions Southern Electric scheme £m	27.1	52.1
Deficit repair contribution included above £m	16.3	38.0

In the year to 31 March 2024, the surplus across SSE's two pension schemes decreased by £119.5m, from £541.1m to £421.6m, primarily due to actuarial losses of £155.2m, offset partially by contributions to the schemes.

The valuation of the SSE Southern scheme decreased by £92.2m in 2023/2024 primarily due to actuarial losses of £118.1m driven by losses on plan assets, offset partially by contributions to the scheme of £27.1m.

The decrease in contributions in the year is driven by the new schedule of contributions agreed by the Group following finalisation of the scheme's most recent triennial valuation.

The Scottish Hydro Electric Pension scheme has partially insured against volatility in its deferred and pensioner members through the purchase of 'buy-in' contracts meaning that the Group only retains exposure to volatility in active employees. During the year the scheme's surplus decreased by £27.3m. This decrease was also mainly driven by actuarial losses relating to losses on plan assets.

Additional information on employee pension schemes can be found in note 15 to the Summary Financial Statements.

SUSTAINABILITY SUMMARY

Short-term progress with long-term goals in sight

Due to the essential nature of SSE's activities, sustainability has naturally been a long-standing feature of its business model, embedded at the heart of its strategy. It provides a framework that guides decisions as it transitions to net zero, ensuring it is done in a way that creates and shares value with stakeholders.

Sustainability is articulated at the highest level, with SSE's business strategy aligned to the UN's Sustainable Development Goals (SDGs). To embed this approach throughout the organisation, SSE has identified four SDGs which are highly material to the business, and to which it has linked its four core business goals for 2030. These 2030 Goals are focused on addressing the challenge of climate change in a way that is fair to working people, consumers and communities. SSE has identified a further three material SDGs, which are focused on the environment and guide the pillars of SSE's Environment Strategy.

This framework allows SSE to navigate complex economic, social and environmental impacts and address them in a balanced way to ensure the best outcomes for stakeholders.

MEASURING SSE's CARBON PERFORMANCE

Measuring and disclosing SSE's year-on-year carbon performance and progress against targets, keeps SSE accountable to its stakeholders for delivery against its Net Zero Transition Plan.

The scope 1 GHG intensity of electricity generated in 2023/24 was the lowest recorded by SSE, falling by 19% to 205gCO2e/kWh, from 254gCO2e/kWh the previous year. This represents a 41% progress against SSE's scope 1 GHG carbon intensity targets for 2030.

SSE's intensity performance is calculated based on two elements - total generation output, comprising thermal and renewable generation source, and total scope 1 GHG emissions (99% of which is from thermal generation). The increased proportion of total generation output contributed to by renewables, combined with a significant reduction in GHG emissions arising from thermal generation, drove the considerable improvement in scope 1 GHG intensity performance.

In 2023/24, SSE's total reported GHG emissions consisted of 47% scope 1 emissions, 5% scope 2 emissions and 48% scope 3 emissions. Overall, SSE's total reported GHG emissions fell by 18% between 2022/23 and 2023/24.

SSE's changing carbon footprint over time shows scope 1 emissions decreasing as a result of strategic intervention but is also balanced by an increase in scope 3 emissions over time. For the first year, SSE's scope 3 emissions represented the largest portion of SSE's total GHG emissions in 2023/24.

GHG emissions arising from thermal generation activities represents the single most material contribution to SSE's total recorded GHG emissions, making up 99% of SSE's scope 1 emissions and 36% of its scope 3 emission through its joint venture investments.

BUSINESS OPERATING REVIEW

SSE's businesses are highly complementary with significant growth potential given their key role in developing, building, operating and investing in the electricity infrastructure and businesses needed in the transition to net zero. With common skills and capabilities in the development, construction, financing and operation of highly technical and world-class electricity assets, these businesses have strong synergies between them. With their shared focus on decarbonisation they will be at the heart of a future energy system that is clean, secure and affordable. The review of the Business Units that follows provides details of performance and future priorities.

regulated ELECTRICITY networks

SSE's regulated electricity networks businesses benefit from inflation-linked remuneration under the RIIO (Revenue = Incentives + Innovation + Outputs) framework set by Ofgem. The regulator determines an annual allowed level of required capital expenditure and operating costs to meet required network outputs. These are added together to form total expenditure or 'totex', which is split by defined capitalisation rates which differ between the transmission and distribution businesses.

Regulatory operational expenditure ('fast money') flows into revenue, whereas regulatory capex ('slow money') is added to the regulatory asset value ('RAV') for each network. Both SSEN Transmission and SSEN Distribution earn a return on regulatory equity and receive an allowance for the cost of debt, both of which are calculated based on a notional split of their RAV. Under the RIIO T2 and ED2 regulatory mechanisms, revenues and RAV for both businesses are CPIH index-linked, providing protection against an inflationary environment. Each business can earn above its base return on equity through delivering efficiency totex savings that flow through to customer bills. If service levels improve against targets as set out in the price control, there is also an opportunity to earn additional income through incentives. However, if service levels fall below these targets, a penalty is incurred which reduces network revenue and therefore customer bills. In addition, RIIO-2 Uncertainty Mechanisms provide opportunities for each business to progress projects not included within their original business plans, or to recover supplementary costs which were not anticipated when the baseline expenditure was agreed.

SSEN Transmission, is paid by the Electricity System Operator based on a forecast of allowed revenue which is set three months in advance of the regulatory year. Revenue varies depending on actual versus forecast volumes transported and over- or under-recovered volumes - including any other changes to forecasted revenues - are accommodated in allowed revenue in the following regulatory year.

In SSEN Distribution, charges per MWh ('tariffs') are set by licensees 15 months in advance of the regulatory year and based on forecasts of: (a) revenue which licensees are entitled to collect in respect of the regulatory year ('allowed revenue'); (b) the incentives and totex outperformance for the last three months of the year in which the tariffs are set; and (c) the level of volumes which will be distributed within the regulatory year. Differences in collected versus allowed revenue (referred to as 'over- or under-recovery') are accommodated in allowed revenue two years after the year in which they occur.

The current RIIO-2 price control runs to 31 March 2026 for SSEN Transmission, and to 31 March 2028 for SSEN Distribution. Following the end of their RIIO-2 price controls, the businesses will commence a further five-year RIIO-3 price control period. The process to determine the parameters of the SSEN Transmission price control commenced during 2023, with Ofgem expected to confirm Final Determinations in Q4 2025 ahead of a Licence Decision in February 2026.

SSEN Transmission

SSEN Transmission	March 24	March 23
Transmission adjusted operating profit¹ - £m	419.3	372.7
Transmission reported operating profit - £m	559.1	405.5
Transmission adjusted investment and capital expenditure - £m	595.6	495.5
Gross Regulated Asset Value (RAV) - £m	5,676	4,836
SSE Share Regulated Asset Value (RAV) ¹ - £m	4,257	3,627
Renewable Capacity connected within SSEN Transmission Network area - MW²	9,312	9,208
¹ Excludes 25% minority interest from 1 December 2022 ² Transmission and distribution connected capacity within the SSEN Transmission Network area includes 300MW (2022/23: 300MW) of pumped storage and 334MW (2022/23: 285MW) of battery storage.

SSEN Transmission overview

SSEN Transmission owns, operates and develops the high voltage electricity transmission system in the north of Scotland and its islands. The business is well placed to capture the significant long-term growth opportunities from the development of renewables across the north of Scotland and the North Sea. Following a minority stake sale completed in November 2022, the business is owned 75% by SSE plc and 25% by Ontario Teachers' Pension Plan Board. All capex and RAV references in this update relate to 100% of the business unless otherwise stated.

RIIO-T2 Operational delivery

SSEN Transmission continues to deliver strong operational performance in 2023/24, achieving 95% of the available reward through the 'Energy Not Supplied' (ENS) incentive, equating to £730k additional income in the year (18/19 prices). This slight reduction in performance relates to one brief outage which was quickly resolved, while overall performance has earned 98.3% of available reward since the beginning of RIIO-T2 and £2.3m additional incentive income (18/19 prices). This performance is underpinned by a robust and ongoing programme of inspection, maintenance, refurbishment and replacement of SSEN Transmission's assets, keeping the lights on for communities across the north of Scotland and ensuring reliable network access for electricity generators to support security of supply in Great Britain.

Capital investment programme
SSEN Transmission's RIIO-T2 capital investment programme continues, with progress being made across major projects. This includes the Shetland High Voltage Direct Current (HVDC) Link, with all offshore cable works now complete including seabed rock placement. The onshore cable works are also complete following a successful high voltage test in January 2024. The project is now in the final commissioning stage, remaining on track for completion and full energisation in summer 2024. Work has also progressed to connect Shetland's existing electricity distribution network to the Shetland HVDC link, connecting Shetland's homes and business to the GB electricity network for the first time via the new Grid Supply Point being constructed at Gremista. The Kergord-Gremista 132kV circuits will then connect the HVDC link to the new Gremista Grid Supply Point. Following a well-publicised incident at the site earlier this month, which resulted in no injuries, work is expected to recommence in stages and the project remains on track to be complete by the end of 2025.

Progress has also been made on increasing the capacity of the North-East Scotland transmission network to 400kV, with all circuits in the first phase completed and energised in February 2024. Work to increase incrementally the voltage in this area of the network continues with the next phase due to be completed towards the end of 2026, in line with RIIO-T2 commitments. Further 400kV infrastructure is expected to enter construction as part SSEN Transmission's ASTI projects, from 2026 onwards.

As of 31 March 2024, the total installed capacity of the north of Scotland network was almost 10.6GW, of which just over 9.3GW is from renewable and other low carbon sources, including 0.6GW of pumped storage and batteries. Several large renewable schemes are scheduled to connect during 2024/25, and SSEN Transmission is on track to exceed its RIIO-T2 goal to deliver an electricity network in the north of Scotland with the capacity and flexibility to accommodate 10GW of renewable generation, enough to power more than 10m homes by 2026.

For financial performance commentary please refer to the Group Financial Review.

OTHER REGULATORY INVESTMENTS

The business has made significant progress over the course of the last few years in securing the regulatory approvals required to take forward several major investments over and above its baseline investment case secured at the start of RIIO-T2. Initially, large onshore transmission projects were taken forward through Ofgem's Large Onshore Transmission Investment (LOTI) Uncertainty Mechanism, with SSEN Transmission currently progressing three projects through that framework. However, to accelerate the regulatory process and facilitate delivery of the required offshore and onshore network reinvestments required for the energy transition, Ofgem introduced the Accelerated Strategic Transmission Investment (ASTI) regulatory framework in December 2022 with SSEN Transmission currently progressing a further eight projects through that framework.

To support the timely delivery of ASTI projects, SSEN Transmission is actively advocating for a maximum 12-month determination of all Section 37 overhead line planning applications. This is in line with the recommendations of the UK Government's Electricity Networks Commissioner, and others.

LOTI projects
In July 2023, Ofgem approved the Final Needs Case for the Orkney transmission link, the final piece in connecting all three of Scotland's main island groups to the GB electricity network. The Orkney transmission link will accommodate around 220MW of renewable electricity generation, helping further unlock Orkney's vast renewable potential alongside supporting the continued development and growth of Orkney's marine energy sector. Main construction works are due to commence in summer 2024, with full energisation expected in 2028.

In August 2023, Ofgem also approved the Final Needs Case for the Skye reinforcement project, which will see the replacement and upgrade of the existing Fort Augustus to Skye transmission line. This is required to maintain security of supply and enable the connection of renewable electricity generation along its route. Both substation applications were granted consent by the Highland Council in early 2024 with a decision on the Section 37 overhead line planning application expected during 2024 with construction works ready to begin and full energisation expected in 2028.

In October 2023, Ofgem approved the Final Needs Case for the Argyll and Kintyre 275kV Reinforcement, subject to all material planning consents being secured. The reinforcement is required to upgrade the local transmission network from 132kV to 275kV operation, supporting the forecast growth in renewables in the region. With all substation planning consents for the Argyll and Kintyre 275kV Reinforcement now secured, SSEN Transmission awaits the outcome of the Inveraray to Creagh Dhubh 275kV connection Section 37 planning application and the Public Local Inquiry for the Creag Dhubh to Dalmally 275kV connection, both of which are expected during 2024. Construction is planned to commence later in 2024, with full energisation expected during 2028.

ASTI projects
As part of the National Grid Electricity System Operator's NGESO Holistic Network Design (HND), eight projects were identified for SSEN Transmission to progress through Ofgem's ASTI framework which included several subsea cables, overhead line and substation installations and upgrades to support the connection of offshore wind and onshore electricity generation. These ASTI projects are wholly owned by SSEN Transmission, with the exception of the Eastern Green Link 2 (EGL2) and Eastern Green Link 3 (EGL3) which are being jointly developed with National Grid. The estimate of gross nominal investment required to deliver these projects is around £17bn.

The EGL2 project - which will see the installation of a 2GW subsea superhighway of electricity transmission between the north east of Scotland and Yorkshire - has made progress during the year with Marine Scotland granting a Marine Licence for cable protection measures in May 2023. The project also reached contract award status in February 2024 with Prysmian Group to supply around 1,000km of cable as well as Hitachi Energy and BAM to supply the converter stations at either end of the link. With the onshore works now underway in Peterhead, the project remains on track for targeted completion in 2029.

The other ASTI projects also continue to progress, with SSEN Transmission reaching 'preferred bidder' status with its supply chain partners for its North of Scotland ASTI subsea HVDC projects, Spittal to Peterhead and the Western Isles, in May 2023. In August 2023, SSEN Transmission entered into Capacity Reservation Agreements with the supply chain for the HVDC cable and converter stations, securing supply chain manufacturing capacity in what is an extremely competitive and constrained global supply chain market. Also in August 2023, SSEN Transmission also reached 'preferred bidder' status for all of its key onshore ASTI projects, a significant milestone in securing the supply chain for the delivery of all overhead line, cabling and substation components.

SSEN Transmission has also concluded its first round of public consultation across its 100% owned onshore and subsea ASTI projects. Further consultation will take place throughout 2024 in advance of submitting consent applications to the relevant consenting authorities.

Finally, work to progress EGL3 - which will see the installation of a 2GW subsea superhighway of electricity transmission between the north east of Scotland and south Lincolnshire/West Norfolk - is also progressing with the supply chain now engaged with the tender process.

RIIO-T3 price control
The process to determine the parameters of the RIIO-T3 price control for SSEN Transmission commenced during the year with the publication in October 2023 by Ofgem of their Future Systems and Networks Regulation consultation, which confirmed the framework for the new price controls.

While the signals from Ofgem to support investment in the SSMC were positive, the unprecedented level of investment required to deliver the SSEN Transmission's £20bn plus of LOTI, ASTI and RIIO-T3 projects means the final RIIO-T3 framework must be attractive to both equity and debt providers. SSEN Transmission will work constructively with Ofgem and wider stakeholders to ensure the future regulatory framework provides the flexibility and agility required to deliver the unprecedented level of required investment.

Work progresses to develop the SSEN Transmission Business plan, which will be submitted to Ofgem, currently scheduled for December 2024

Future growth Opportunities

'Beyond 2030' report
Further investment beyond the Pathway to 2030 is required to unlock the North of Scotland's full renewable potential and to deliver energy security and net zero targets.

These additional onshore and offshore network reinforcements were set out by National Grid Electricity System Operator through the publication of the second transitional Centralised Strategic Network Plan (tCSNP), titled 'Beyond 2030' in March 2024. This will connect another tranche of ScotWind whilst also setting out options to deliver the remainder. For the north of Scotland, the ESO's plan confirms the need for a number of projects to proceed now for delivery by 2035, which combined represent a potential estimated investment of over £5bn for SSEN Transmission. This includes a second HVDC link to Shetland and in May 2024, the Sumitomo Electric Van Oord Consortium was selected as preferred bidder for the proposed 1.8GW subsea cable, the anchor project enabling Sumitomo Electric Industries investment in its new cable manufacturing facility at Nigg.

SSEN DISTRIBUTION

SSEN Distribution	Mar 24	Mar 23
Distribution adjusted and reported operating profit - £m	272.1	382.4
Regulated Asset Value (RAV) - £m	5,301	4,720
Distribution adjusted investment and capital expenditure - £m	505.1	421.0
Electricity Distributed - TWh	37	36
Customer minutes lost (SHEPD) average per customer	66	59
Customer minutes lost (SEPD) average per customer	58	46
Customer interruptions (SHEPD) per 100 customers	57	60
Customer interruptions (SEPD) per 100 customers	51	44

Customer minutes lost and Customer interruptions figures estimated and subject to outturn of annual regulatory process

SSEN DISTRIBUTION OVERVIEW

SSEN Distribution, operating under licence as Scottish Hydro Electric Power Distribution plc (SHEPD) and Southern Electric Power Distribution plc (SEPD), is responsible for safely and reliably maintaining the electricity distribution networks supplying over 3.9m homes and businesses across central southern England and the North of Scotland. SSEN Distribution's networks cover the greatest land mass of any of the UK's Distribution Network Operators with over 75,000km² of extremely diverse terrain. The business has significant growth opportunities as a key enabler of the local and national transition to a net zero future.

RIIO-ED2 OPERATIONAL DELIVERY

SSEN Distribution has completed the first year of operating in the RIIO-ED2 price control period. This price control, which will run until March 2028, identified the need for £3.6bn of baseline expenditure, representing an increase of 22% on the previous price control, alongside the opportunity to trigger up to £0.7bn in additional funding under Uncertainty Mechanisms. This will include investment to satisfy new demand and generation growth, and to improve subsea cable resilience for connections to Scottish islands.

SSEN Distribution is working closely with Ofgem, and its stakeholders, to ensure the price control has the agility and flexibility needed to deliver the infrastructure needed for net zero requirements, supported by a three-point strategy. This is centred on growing the asset base to underpin the net zero transition and as a consequence the Regulatory Asset Value (RAV) will increase; by driving targeted improvements in customer performance and operational efficiency; and by continuing SSEN Distribution's lead role in developing the future flexible energy system.

Improving customer performance
Targets for improving service levels for customers are set for SSEN Distribution through the regulatory framework. Incentive rewards will typically be collected two years after they are earned. In RIIO-ED2, the ability to secure higher incentive returns has been tightened, compared with previous price controls. Within the Interruptions Incentive Scheme (IIS), SSEN is offered an incentive on its performance against the loss of electricity supply, through the recording of the number of Customer Interruptions (CI) and Customer Minutes Lost (CML). These include planned, as well as unplanned, interruptions.

SHEPD's Customer Interruption (CI) performance has improved in the first year of RIIO-ED2 compared to the last year of RIIO-ED1, by 5%. SEPD has seen a decrease in its CI performance by 12%. Both SHEPD and SEPD's Customer Minutes Lost (CML) performance has decreased from 2022/23 by 11% and 17% respectively. In the first year of RIIO-ED2, a penalty of ~£13.7m was incurred across both SEPD and SHEPD under the Interruptions Incentive Scheme (IIS). This penalty arose from the introduction of tougher targets under the IIS compared to RIIO-ED1. In addition to this, adverse weather had an impact on CI and CML performance.

To put these figures in context, SSEN Distribution's licence areas have been severely affected by several named storms. Investment of £35m in automation across network areas has had a tangible, positive impact on SSEN Distribution's ability to reconfigure the system quickly and remotely, if a storm-related fault occurs. This, alongside cable replacement work to reinforce the network, has mitigated service interruptions in what has been an unsettled winter period.

As SSEN Distribution's investment in network renewal and reinforcement increases, there is a need to initiate Planned Service Interruptions to enable the business to carry out the necessary works safely and efficiently. This investment will significantly improve the performance of the network.

SSEN Distribution's Customer Satisfaction performance is a clear focus for the business, and the service improvements being made are making a positive difference. In SHEPD, our score increased by 0.67%; in SEPD it is up by 0.4%. For SSEN Distribution as a whole, there is a 0.54% increase: in line with the industry average of 0.56%.

In the first year of this current price-control period, SSEN Distribution is delivering ongoing efficiencies. £2m a year is already being saved through redesigned tenders for plant and materials, including for SSEN's extensive subsea maintenance and inspection programme.

Capital investment programme
The first year of the current price control period has featured an acceleration of SSEN Distribution's major capital investment programme across both its networks. This is delivering performance improvements, an improved service for customers, and future earnings through RAV growth.

In 2023/24, capital expenditure has increased to £505m. This compares to £421m in 2022/23. In the past year, SSEN has spent £14.7m to upgrade the network from Aultbea to Ullapool. The £44m Pentland Firth East subsea cable was energised in September. This investment is now strengthening supplies in Orkney.

In the central southern England (SEPD) licence area, a new contracting system with three partners is now in place. A £1bn programme of investment, representing 25% of the total ED2 figure, is under way following the largest contract awards issued by SSEN Distribution. Three UK companies, Keltbray Energy Limited, OCU Services Limited and The Clancy Group Limited, are each responsible for a regional delivery zone. This new approach is reducing supply chain risk in delivering upgrades to the network in support of SSE's Net Zero Acceleration Plan, and is expected to deliver material efficiency benefits for customers through a collaborative approach to project delivery. The joint regional delivery teams are now well established, and are mobilised to accelerate the programme of capital delivery, including creating capacity for more new connections.

In the SHEPD licence area, in April 2024, SSEN Distribution issued opportunities to tender for a £320m programme of investment and infrastructure development in the north of Scotland. The investment will create greater network capacity, enable more connections, and increase network resilience. The change to award Framework Agreements based on geographical areas for underground cable works, substations, and overhead line projects gives a commitment to contract partners, which will help facilitate growth, and the development of locally-based workers, thus strengthening their own ability to deliver projects.

For financial performance commentary please refer to the Group Financial Review.

OTHER REGULATORY INVESTMENTS

SSEN Distribution has successfully triggered its first uncertainty mechanism with Ofgem approving over £30m in additional funding for cyber security following a submission in April 2023. A further submission was made in the October 2023 reopener window and is awaiting Ofgem's determination.

SSEN Distribution continued to work proactively with its stakeholders and the regulator to prepare robust, evidence-based submissions for a range of uncertainty mechanisms which were triggered in January 2024. These include security of supply on Shetland with a request for additional funding of £38m, the first phase of whole system investment for Hebrides and Orkney (HOWSUM) with a request of £59m and a request of £14m for an investment programme to enhance network resilience following the impact of Storm Arwen. Consultations and decision on these reopeners are still to take place.

Looking further ahead to load-related uncertainty mechanisms which will open for submissions in January 2025, SSEN Distribution is leading the way in taking a 'Net Zero First' approach to investment in distribution infrastructure to meet future generation and demand needs.

Leading on the future system

SSEN Distribution's goal is to facilitate the connection of around two million EVs and one million heat pumps by 2030. The growth in the take-up of low carbon technologies is needed in order to get to net zero, and demand is increasing sharply; there has been a 13-fold increase in the number of electric vehicles connected in the past six years. In addition to more demand-side connections to the network, an increasing number of generation projects like solar and battery are seeking to connect too. SSEN Distribution is working with transmission companies, NGESO, and other DNOs to modernise the connections system to connect more projects which are ready, while also reducing the impact of 'first come, first served' queueing.

In West London, SSEN Distribution and National Grid - in partnership with Electricity System Operator and Greater London Authority - have devised innovative solutions to unlocking electricity network capacity. By enabling ramped connections that deliver increased electricity supply over time, housing developments in parts of the London boroughs of Hounslow, Hillingdon and Ealing have had their connection dates brought forward. This means that project developments totalling 7,800 homes have had their connection dates accelerated.

SSEN's strong support for net zero planning at a local level, is also borne out by its proactive relationships with local authorities. This is epitomised by SSEN's sector-leading Local Energy Net Zero Accelerator (LENZA) Tool. LENZA is a geospatial planning tool, which empowers local authorities to make effective, efficient net-zero plans. It is designed to bring together a range of datasets, including SSEN's network data, to assist with strategic energy planning, and ensure that local plans are incorporated into SSEN's longer-term strategic network investment. LENZA also provides SSEN with the robust evidence for regulatory funding of future investment.

SSEN has onboarded more than half the applicable local authorities in how to use this tool. LENZA complements SSEN's support for local authorities in developing their own Local Area Energy Planning programmes.

FUTURE GROWTH OPPORTUNITIES

Smart. Fair. Now.
SSEN Distribution is at the forefront of sector-wide development around smart, flexible, electricity systems. Over the past year, it has published detailed plans for how its Distribution System Operations (DSO) will operate. These plans are based on SSEN's 'Smart, Fair, Now' principles, committing it to developing the smart electricity system of the future, in a way that is fair for all users, quickly.

Over the past few months, the DSO team has been following through on its overarching action plan with details on how and why decisions will be made, on the flexibility roadmap for between now and the end of the decade, on how data will be responsibly harnessed to make the electricity system smarter, and about how the network will develop through capital investment, and the efficient use of Flexibility Services.

On a practical level, SSEN Distribution continues to increase the tendering of Flexibility Services in areas where localised high demand can be offset to extend overall network capacity. During 2023/24, SSEN contracted 703MW of flexibility services for dispatch in ED2, and our network-wide call for flexibility is targeting a total of 5GW of flexible capacity by end of RIIO-ED2.

SSE Renewables

SSE Renewables	Mar 24	Mar 23
Renewables adjusted operating profit - £m	833.1	561.8
Renewables reported operating profit - £m	630.3	428.1
Renewables adjusted investment & capital expenditure before acquisitions - £m	1,097.1	911.5
Generation capacity - MW
Onshore wind capacity (GB) - MW	1,285	1,285
Onshore wind capacity (NI) - MW	117	117
Onshore wind capacity (ROI) - MW	582	567
Total onshore wind capacity - MW	1,984	1,969
Offshore wind capacity (GB) - MW	1,014	487
Conventional hydro capacity (GB) - MW	1,159	1,159
Pumped storage capacity (GB) - MW	300	300
Total renewable generation capacity (inc. pumped storage) - MW	4,457	3,915
Contracted capacity	2,792	2,792
Generation output - GWh
Onshore wind output (GB) - GWh	2,461	2,770
Onshore wind output (NI) - GWh	251	286
Onshore wind output (ROI) - GWh	1,352	1,357
Total onshore wind output - GWh	4,064	4,413
Offshore wind output (GB) - GWh	2,477	1,846
Conventional hydro output (GB) - GWh	3,071	3,037
Pumped storage output (GB) - GWh	315	301
Total renewable generation (inc. pumped storage) - GWh	9,927	9,597
Total renewable generation (also inc. constrained off GB wind) - GWh	11,158	10,159

Note 1: Capacity and output based on 100% of wholly owned sites and share of joint ventures

Note 2: Contracted capacity includes sites with a CfD, eligible for ROCs, or contracted under REFIT

Note 3: Onshore GB wind output excludes 530GWh of compensated constrained off generation in 2023/24 and 456GWh in 2022/23; Offshore GB wind output excludes 701GWh of compensated constrained off generation in 2023/24 and 106GWh in 2022/23

Note 4: Biomass capacity of 15MW and output of 78GWh in 2023/24 and 68GWh 2022/23 is excluded, with the associated operating profit or loss reported within SSE Enterprise

Note 5: Offshore capacity increased by 527MW with Seagreen offshore windfarm fully operational in October 2023

Note 6: ROI Onshore capacity increased by 15MW with Lenalea fully operational December 2023

SSE Renewables overview

SSE Renewables is a leading developer and operator of renewable energy generation, focusing on onshore and offshore wind, hydro, solar and battery storage. The business' core focus is on the UK and Ireland, with a growing presence internationally, and comprises 1,900 renewable energy professionals predominately based across the UK and Ireland with a growing presence in Continental Europe and Japan.

Operational delivery

In onshore wind, the lower-than-expected wind speeds in early summer led to the accelerated delivery of normal maintenance campaigns which were all completed ahead of plan. Asset availability has remained high throughout the year, particularly given the busy winter period which included 10 named storms. The second half of the year saw a return towards more normal wind speeds, albeit still below long-term averages, resulting in output around 6% down year-on-year.

In offshore, Beatrice (588MW, SSE share 40%) and Greater Gabbard (504MW, SSE share 50%) maintained high levels of availability throughout the year, however, Beatrice output was impacted by a wider transmission network fault during part of December. Greater Gabbard experienced higher than anticipated wind resource, whilst Beatrice was lower than expected, demonstrating the value of geographical diversity in the fleet.

Whilst there were some commissioning delays at Seagreen (1,075MW, SSE share 49%), the asset has since achieved significant stable and reliable generation towards the end of the financial year. The addition of Seagreen - which has more than doubled the installed offshore wind capacity - more than offset lower than average wind speeds, with output around 34% up year-on-year.

In hydro, teams managed extremely challenging weather conditions well throughout a number of major named storms. Plant availability was strong throughout 2023/24 and production was 3,071GWh, with normal storage levels ahead of the drier spring and summer months.

As part of standard practice, SSE Renewables periodically reviews its P50 production estimates (the forecast average measure of output over the project's life) across the fleet, updating assumptions for the latest data including weather conditions. The last four years have seen lower-than-expected weather resource, which has triggered a more detailed review of these assumptions. Whilst that review highlighted some small immaterial changes to expected output on an asset-by-asset basis, there was no net material effect across the whole fleet. The detailed review also validated the use of long-term wind speed averages - around 30 years - in the P50 production estimates, as a more accurate estimate of expected long-term profitability of these assets over their useful lives.

For financial performance commentary please refer to the Group Financial Review.

DELIVERING WORLD-CLASS ASSETS

Seagreen formally entered into commercial operations in October 2023 with all 114 Vestas V164-10MW turbines now fully operational. Seagreen is now Scotland's largest wind farm as well as the world's deepest fixed-bottom offshore wind farm, with its deepest foundation installed at 58.7m below sea level.

Construction remains ongoing at all three phases of the world's largest offshore wind farm at Dogger Bank (each 1,200MW, SSE share 40%) off the coast of England.

All monopiles and transition pieces have now been installed at Dogger Bank A, with inter-array cable installation also well progressed. However, turbine installation has been affected by challenging weather conditions with vessel availability and supply chain delays further impacting progress. The return of the installation vessel back to site in early May has meant that turbine installation has now resumed and, assuming continued clear weather conditions, it is expected that installation activity will continue uninterrupted over the summer months, with the project targeting full commercial operations during the first half of 2025. With the HVDC Transmission system fully commissioned, it is expected that turbine commissioning and export will happen in conjunction with installation. It is not expected that the delays noted will materially affect project returns.

On Dogger Bank B, all monopiles, transition pieces and cables have been fabricated, with monopile installation having commenced in early May. An offshore substation platform utilising HVDC technology has also been successfully installed. It is expected that the delays seen on Dogger Bank A will impact the Dogger Bank B timetable, with completion of that phase expected in early 2026. Dogger Bank C works remains on track offshore and onshore with fabrication of components under way with completion of that phase expected in early 2027.

Onshore, construction of Viking (443MW) in Shetland is nearing completion. Turbine commissioning was completed throughout the winter months and the project is expected to be fully operational by Summer 2024 following energisation of the associated transmission link. When complete, Viking is expected to be the UK's most productive onshore wind farm.

In hydro, SSE Renewables continues to make progress with the Tummel Bridge power station refurbishment project, reaching a significant milestone in April 2024 with the successful commissioning and energisation of the first bespoke turbine. Full focus is now on the installation and commissioning of the second turbine, which is expected to be complete by mid-summer 2024 increasing the station's potential output to 34-40MW and extending its life by 30 years.

SSE Renewables continues to advance technology diversity as it progresses grid-scale solar and battery storage technology projects. In England, SSE's first 50MW battery energy storage system at Salisbury in Wiltshire is now fully operational while a second 150MW battery storage project at Ferrybridge in Yorkshire is due to reach completion within the next 12 months, located at the site of SSE's former coal power station. Construction is also under way at SSE's 320MW battery energy storage project at Monk Fryston, also in Yorkshire, which will be completed in 2025/26. In December 2023, SSE Renewables took a final investment decision and started construction of a 150MW / 300MWh battery energy storage system project in Warrington, Cheshire, at the site of SSE's former Fiddler's Ferry coal-fired power station. The asset is expected to be operational in summer 2025.

In Ireland, the 30MW Lenalea onshore wind farm in Donegal (SSE share 50%) became fully operational in December 2023. Together with co-development partners FuturEnergy Ireland, the business has entered into a multi-year Corporate Power Purchase Agreement (CPPA) with Microsoft which will see the renewable electricity produced at Lenalea contributing towards Microsoft's goal of powering its data centre operations with 100% renewable energy by 2025. This is the first long-term CPPA which SSE Renewables has entered into for one of its assets. In the country's Midlands, turbine installation at the 29-turbine, 101MW Yellow River wind farm is on track to be completed by Summer 2024, with commercial operations expected in early 2025. It secured a 16.5-year contract for low carbon power under RESS 3 for all installed capacity.

Good progress is also being made at the first of SSE's onshore Continental Europe wind projects with Chaintrix (28MW) in France and Jubera (64MW) in Spain under construction and targeting commissioning at the end of 2024 and 2025, respectively.

DOMESTIC opportunities

Onshore wind

SSE Renewables has maintained its focus on growing its onshore wind portfolio in home markets. It was the biggest winner in the UK Government's fifth Contracts for Difference (CfD) Allocation Round. Strathy South, Aberarder, and Bhlaraidh Extension onshore wind farm projects in the Scottish Highlands, and the Viking wind farm project secured CfDs for a total of 605MW at a guaranteed strike price of £52.29/MWh, based on 2012 prices but annually indexed for CPI inflation. A final investment decision was announced on Aberarder (50MW) in May 2024, and enabling works on Bhlaraidh Extension (101MW) are scheduled to complete in June 2024 with main construction works expected to commence in early 2025, subject to a final investment decision.

SSE Renewables, together with Bord na Móna, announced in March 2024 one of the largest ever joint venture renewable energy deals in the Irish market to accelerate delivery of up to 800MW (SSE share 50%) of new onshore wind generation over the next decade. The joint venture includes three projects already in pre-planning development (c.250MW) as well as a portfolio of 550MW of future prospects.

Offshore wind

Turning to offshore wind, SSE Renewables did not enter offshore bids for AR5 because the process did not meet SSE's investment criteria. However, progress continues to be made on a number of development opportunities that could deliver significant volumes of offshore wind needed to help the UK achieve energy security targets. Located in the North Sea, in the outer Firth of Forth, Berwick Bank wind farm has the potential to deliver up to 4.1GW of installed capacity, making it one of the largest offshore opportunities in the world. In December 2023, East Lothian Council granted planning permission in principle for the project's onshore transmission infrastructure and grid connection at Branxton. However, the project continues to await consent for the offshore array from the Scottish Government, which is now expected during 2024.

In partnership with Equinor, SSE Renewables is also actively developing a fourth phase of Dogger Bank wind farm, Dogger Bank D (up to 2GW, SSE share 50%). In March 2024, National Grid ESO published the Transitional Centralised Strategic Network Plan (tCSNP2) which included confirmation that Dogger Bank D will connect into Birkhill Wood, a proposed new 400kV substation located in the East Riding of Yorkshire. The tCSNP2 publication also included details of the onshore design requirements for SSE Renewables 3.6GW floating offshore wind project, Ossian, (SSE share 40%) which will be located in Lincolnshire.

In Ireland, the business remains committed to delivering Arklow Bank Wind Park 2 (up to 800MW), despite being unsuccessful in Ireland's first Offshore Renewable Energy Support Scheme (ORESS) auction in May 2023. It will proceed to submit a planning application in Spring 2024 to Ireland's planning board, An Bord Pleanála, and will continue to demonstrate discipline whilst it considers alternative routes to market.

The next ORESS auction (ORESS 2.1) will be for a 900MW site within the South Coast Designated Maritime Area Plan (DMAP) announced in May 2024 and is expected to take place in the first half of 2025. Subsequent auctions, within this and new DMAPs are expected to follow annually to 2030.

Hydro / pumped Storage

In January 2024, the UK Government published a consultation on how it intends to support the deployment of long-duration electricity storage projects, a process with which SSE has actively engaged. Subject to being successful in the administrative allocation of an investable cap and floor mechanism, SSE Renewables hopes to make a final investment decision on Coire Glas (1,300MW) in late 2025 or early 2026, allowing for main construction to commence in the second half of 2026. Construction is expected to last up to seven years, which means the project could be operating in 2032 and fully completed during 2033. Plans are also progressing to convert the existing plant at Sloy power station into pumped storage hydro.

Solar and batteries

SSE Renewables continues to view solar and battery technologies as key net zero enablers. Its ~2GW secured pipeline of projects across the UK and Ireland includes a recently-acquired and fully-consented 100MW / 200MWh battery storage project in County Tyrone, Northern Ireland, on which SSE hopes to make a final investment decision in the next 12 months.

Overall, the deliverability of the future prospects pipeline is being assessed in light of the ongoing NGESO Connections Reform proposals.

INTERNATIONAL opportunities

Continental Europe
SSE Renewables is progressing its Southern European onshore wind development portfolio of ~4.5GW. It is currently expected that over 120MW of projects will aim for a final investment decision in the next 12 months, with a total of 220MW in operation by March 2027. In Northern Europe, the business is progressing a 959MW portfolio of solar photovoltaics ('solar PV') projects in Poland. This early-stage pipeline will be progressed under Developer Services Agreements with local development partners.

SSE Renewables also has other selective offshore wind opportunities in Northern Europe. In the Netherlands, it has bid into the Dutch Government's Ijmuiden Ver zone tender (2 x 2GW), with its joint venture partner APG (acting on behalf of Dutch pension fund ABP), with winning bids expected to be announced in Summer 2024. The business will continue to assess participation in offshore leasing rounds across selected markets in Northern Europe, where they offer attractive returns.

Japan
SSE Renewables is continuing to pursue offshore wind opportunities in Japan through its joint ownership company SSE Pacifico (80% stake) and its dedicated team in Tokyo where it has both self-developed sites alongside targeted bid partnerships with which to enter auctions.

Project	Capacity (MW)	SSE Share (MW)
In construction
Offshore wind	3,600	1,440
Onshore wind	686	686
Solar and battery	650	651
Total in construction - GW		2.8GW
Late-stage development
Offshore wind	500	245
Onshore wind	892	861
Solar and battery	250	250
Pumped storage	1,300	1,300
Total late-stage development - GW		2.6GW
Early-stage development
Offshore wind	9,004	6,592
Onshore wind	3,431	2,782
Solar and battery	1,950	2,009
Total early-stage development - GW		11.4GW

TOTAL SECURED PIPELINE - GW		16.8GW

Other Future prospects
Offshore wind	~8,000	~6,000
Onshore wind	~3,000	~3,000
Solar and battery	~3,000	~2,300
Hydro	~1,800	~900
Total future prospects		~12GW

Notes: Table reflects ownership and development status as at 31 March 2024. All capacities are subject to change as projects refined. Onshore includes solar and battery hybridisation. Late-stage is consented in GB and Ireland and grid or land security elsewhere, early-stage has land/seabed rights in GB and Ireland and some security over planning or land elsewhere. Future prospects are named sites where non-exclusive development activity is under way.

SSE Thermal

SSE Thermal key performance indicators

SSE Thermal	March 24	March 23
Thermal adjusted operating profit - £m	736.1	1,031.9
Thermal reported operating profit - £m	644.4	1,089.5
Thermal adjusted investment and capital expenditure, before acquisitions - £m	99.6	153.2
Generation capacity - MW
Gas- and oil-fired generation capacity (GB) - MW	5,538	5,538
Gas- and oil-fired generation capacity (ROI) - MW	672	1,292
Total thermal generation capacity - MW	6,210	6,830
Generation output - GWh
Gas- and oil-fired output (GB) - GWh	13,597	16,781
Gas- and oil-fired output (ROI) - GWh	1,650	1,532
Total thermal generation - GWh	15,247	18,313

Note 1: Capacity is wholly owned and share of joint ventures, and reflects Transmission Entry Capacity

Note 2: ROI capacity in March 24 reflects closure of Tarbert oil-fired station

Note 3: Output is based on SSE 100% share of wholly owned sites and 100% share of Marchwood PPAs due to the contractual arrangement.

Note 4: Output in GB in year to March 2023 excludes 1,184GWh of pre-commissioning output from Keadby 2 CCGT which commissioned 15 March 2023

SSE Thermal overview

SSE Thermal owns and operates conventional flexible thermal generation in GB and Ireland, whilst actively exploring opportunities for growth in technologies such as carbon capture and storage (CCS) and hydrogen power generation. The business seeks to become the leading provider of flexible thermal energy in a net zero world through transforming existing high-carbon generation assets to low-carbon, whilst ensuring a just transition for our people.

SSE Thermal's flexible and efficient fleet of gas-fired generation will continue to play a critical role in the transition to a net zero future, providing reliable back-up power and complementing renewable energy. However, the business has committed to not constructing any further gas-fired power stations without a clear route to decarbonisation and it is actively seeking ways to decarbonise current assets.

Operational delivery

SSE Thermal's fleet delivered another strong year of performance in GB and Ireland, despite lower spark prices and less volatility compared to 2022/23. Value has been secured by selling output to the market and contracting forward ahead of delivery, using the fleet's inherent flexibility to optimise the value received.

In GB, the impact of unplanned outages, most notably at Keadby 2 and a one-off extended outage at Marchwood, were offset by value captured during pockets of volatility throughout the year. This demonstrates the importance of asset availability in line with system needs, where the ability to efficiently flex output is becoming more valuable. Managing availability responsibly, both within year and taking a view of future system needs, continues to be a priority for SSE Thermal.

Keadby 2 (893MW), which entered commercial operation in March 2023, is Europe's most efficient CCGT, displacing older more carbon intensive plant on the system. A planned outage was successfully delivered across the summer, alongside unplanned outages, both recognising the first-of-a-kind nature of this plant. In October 2023, Keadby 2's 15-year Capacity Market agreement commenced in line with expectations, with all milestones having been met.

In February 2024, the GB four-year ahead Capacity Market auction cleared at a record high clearing price of £65/kW, with all of SSE Thermal's wholly-owned and Joint Venture CCGTs securing agreements. A similar trend was seen in Ireland T-4 auction results, with a record high clearing price for delivery in 2027/28. Great Island (374MW derated) and SSE Thermal's two smaller peaking plant (89MW derated) secured agreements in this auction. Keadby 1 (692 MW) and Medway (673MW) also secured one-year ahead agreements commencing in October 2024, having not taken agreements in the four-year ahead auction. These auction results demonstrate the enduring need for flexible capacity on the GB and Ireland system.

In Ireland, Great Island (464MW) continued to see increased output year-on-year, demonstrating the ongoing need for dispatchable plant in that constrained marked. Tarbert oil-fired power station (620MW) closed at the end of December 2023, in line with requirements under the Industrial Emissions Directive.

SSE Thermal has now secured ISO 55001 certification across its portfolio - an international asset management standard which underlines the approach we take to ensure effective management of plant availability across the lifecycle of our portfolio.

For financial performance commentary please refer to the Group Financial Review.

SSE Thermal Capacity Contract Awards

The following agreements have been awarded through competitive auctions:

Station	Asset type	Station Capacity	SSE share of contract	Capacity obligation
Medway (GB)	CCGT	735MW	100%	To September 2028
Keadby (GB)	CCGT	755MW	100%	To September 2028
Keadby 2 (GB)	CCGT	893MW	100%	16 years commencing October 2022
Peterhead (GB)	CCGT	1,180MW	100%	To September 2028
Seabank (GB)	CCGT	1,234MW	50%	To September 2028
Marchwood (GB)	CCGT	920MW	100%	To September 2028
Saltend (GB)	CCGT	1,200MW	50%	To September 2028
Indian Queens (GB)	OCGT	140MW	50%	To September 2028
Slough Multifuel (GB)	Energy from Waste	50MW	50%	15 years commencing October 2024
Burghfield (GB)	OCGT	45MW	100%	To September 2028
Chickerell (GB)	OCGT	45MW	100%	To September 2028
Great Island (Ire)	CCGT	464MW	100%	To September 2028
Rhode (Ire)	Gas/oil peaker	104MW	100%	To September 2028
Tawnaghmore (Ire)	Gas/oil peaker	104MW	100%	To September 2028
Tarbert (Ire)	Biofuel	300MW	100%	10 years commencing October 2026
Platin (Ire)	Biofuel	150MW	100%	10 years commencing October 2026

Capacity contracts are based on de-rating factors issued by the delivery body for each contract year, therefore will not directly match SSE's published station capacity.

Capacities stated reflect Transmission Entry Capacity

Marchwood (SSE equity share 50%) tolling arrangement means SSE receives 100% of economic benefit from capacity contract

Medway has capacity obligation in 2023/24 and 2026/27 but none in 2025/26.

Keadby 2 16 year obligation comprised of a T-1 and a 15 year contract

The Tarbert oil-fired station previously reported was closed in September 2023.

CONSTRUCTION PROGRAMME

Final commissioning is continuing at Slough Multifuel (55MW), the energy-from-waste facility which is a 50:50 Joint Venture with Copenhagen Infrastructure Partners. First fire was achieved in March 2024 and the project is on track to enter commercial operations ahead of schedule in summer 2024.

In Ireland, construction is ongoing on a Temporary Emergency Generation unit at our Tarbert site in County Kerry. This is being delivered at the request of Irish authorities, with the 150MW plant to run on distillate oil. The unit is scheduled for delivery in September 2024. Under legislation from the Irish Government, it will cease operations when the temporary electricity emergency has been addressed and no later than March 2028. Until then, it would only be utilised when it is clear that market-sourced generation will not be sufficient to meet system needs and with a maximum duration of 500 hours per year.

Growth opportunities

Flexibility, along with renewables and networks, is a core pillar of the future energy system and there is a critical need for new low-carbon flexible power in both GB and Ireland this decade. SSE Thermal continues to progress its low-carbon plans to help meet this urgent requirement while working to decarbonise its CCGT fleet where possible - vital actions for delivering our goal of an 80% reduction in carbon intensity by 2030.

In GB, there is cross-party support on the need for both CCS and hydrogen, underlining the strategic rationale of SSE's growing low-carbon portfolio. To enable these technologies, Government intervention is needed both in terms of relevant policies and in building the shared CO2 and hydrogen pipeline infrastructure that new assets will connect to and rely on. However, policy progress has been slow.

For CCS, the Government is expected to launch the Track 2 process during 2024/25, which will allow projects within the Scottish Cluster and Viking Cluster the opportunity to connect to shared infrastructure. Progress is also expected on the Track 1 Expansion process, which would support projects within existing Track 1 clusters in the north-east and north-west of England. This could create opportunities for SSE Thermal's CCS projects being developed in a 50/50 collaboration with Equinor - Keadby Carbon Capture Power Station (910MW) in North Lincolnshire and Peterhead Carbon Capture Power Station (900MW) in Aberdeenshire to secure Dispatchable Power Agreements. FEED studies have been completed at Keadby Carbon Capture, which has planning consent in 2022. At Peterhead, FEED studies continue while a planning decision is expected in the current financial year.

Recognising that progress to decarbonise is slower than expected, SSE Thermal has evolved its CCGT strategy to ensure new projects can meet the short-term capacity challenge while driving long-term decarbonisation efforts. In 2024/25, Keadby Hydrogen Power Station will go into planning with the application being 'dual fuel' in nature. This means that the 900MW plant - being developed on a 50/50 basis with Equinor - could either run on hydrogen or natural gas whilst being operational by 2030. While the ambition would be to run on 100% hydrogen from inception, Keadby Hydrogen would have the capability to run on natural gas for an initial period if the necessary hydrogen infrastructure is not fully in place, while also utilising market-leading turbine technology to ensure maximum efficiency.

To minimise the risk of locking-in unabated emissions, SSE has set clear criteria against which it will evaluate whether to enter potential hydrogen-ready CCGT projects into planning. This includes proximity to planned national or regional hydrogen networks, location within an established cluster, grid connection access and compatibility with SSE's Net Zero Transition Plan. SSE will assess whether a project has a clear pathway to full decarbonisation by 2035, within a supportive regulatory framework, before taking any Final Investment Decision.

In addition, development continues on other projects across the hydrogen value chain. A strategic investment has been made to acquire 50% of H2NorthEast, a proposed blue hydrogen production facility in Teesside co-owned with Kellas Midstream. Blue hydrogen production will be essential to scaling up broader hydrogen production efforts and providing volumes required to decarbonise power generation. As part of the East Coast Cluster, H2NorthEast is expected to participate in the Track 1 Expansion process.

SSE Thermal also continues to progress green hydrogen production projects into UK Government's HAR2 allocation round, which aims to provide revenue support to 850MW of green hydrogen production capacity. This includes Aldbrough Hydrogen Pathfinder, which in addition to hydrogen production also includes hydrogen storage and hydrogen power generation. Additionally, SSE is continuing to develop options for hydrogen blending into Keadby 2, with pre-FEED activity under way, and at Saltend Power Station, part of the Triton Power portfolio co-owned by SSE Thermal and Equinor.

In Ireland, the business continues to advance new power stations which would utilise sustainable biofuels (in accordance with EU sustainability standards) and would be capable of converting to hydrogen in the future. A decision is expected from An Bord Pleanála this summer on planning consent for the 300MW Tarbert Next Generation power station. Initial consent is secured on the 170MW Platin power station from Meath County Council, with the decision now referred to An Bord Pleanála and a decision also expected this summer. This will allow final investment decisions to be made this year, with both projects holding 10-year Capacity Market agreements due to commence in the 2026/27 delivery year.

Gas Storage

Gas Storage	March 24	March 23
Gas Storage adjusted operating profit - £m	82.8	212.5
Gas Storage reported operating (loss) / profit - £m	(42.2)	249.2
Gas storage adjusted investment and capital expenditure - £m	0.8	6.3
Gas storage level at period end - mTh	40	126
Gas storage level at period end - %	21	65

Gas Storage overview

SSE holds around 40% of the UK's conventional underground gas storage capacity at two sites on the East Yorkshire coast. The Atwick facility, near Hornsea, is wholly-owned by SSE, while the Aldbrough facility is operated as a joint venture with Equinor. These two sites offer flexibility and hedging services to the UK and interconnected gas markets.

As part of the transition to a net zero future, opportunities to convert gas storage facilities to store low-carbon hydrogen, which can be used to decarbonise power generation, industry, heat, transport and other key sectors are being explored.

Operational delivery

SSE's Gas Storage assets continue to respond to market needs, optimising assets to help ensure security of gas supply for the UK whilst providing important liquidity to the market. These assets are an important risk management tool to the Group's generation portfolio by offering short-notice flexibility, as a result of their technical ability to cycle quickly, to mitigate exposures from wind speeds and demand variability. Positive spreads between summer and winter, combined with trading optimisation, supported a year of strong performance.

In Aldbrough, after successfully returning to service ahead of winter 2022/23, Caverns 6 and 9 have performed well, providing valuable additional capacity and deliverability to the UK system. And with the equivalent of two caverns being added over the past three years at Atwick, work to optimise maximum and minimum operation pressures also continues. Work is also under way to rewater Aldbrough Cavern 4Z, which has been operating at a reduced level due to cavern instability, with completion of this work expected in 2024.

In April 2023, Gas Storage secured ISO 55001 certification, an international asset management standard, for Atwick and Aldbrough facilities.

For financial performance commentary please refer to the Group Financial Review.

GROWTH OPPORTUNITIES

In December 2023, an updated view of gas security of supply and demand was published by the UK Government alongside an exploration of the future role that flexible sources of gas supply, including storage, might play in gas security over the medium to long term. This concluded that natural gas will continue to play a role in delivering energy security to 2050, as part of a net zero emissions trajectory, with additional requirements for flexibility. The UK Government intends to issue a call for evidence on gas flexibility, to explore potential roles and policy frameworks. SSE Thermal remains committed to working with UK Government departments and Ofgem to ensure the critical role of UK storage is properly valued, and low-carbon options can be delivered in tandem.

Following the publication of a minded-to position on Hydrogen Storage Business Model support, the UK Government has undertaken further market engagement on allocation of support. The first allocation round is expected to open later in 2024, to support investments in nationally strategic hydrogen storage assets. SSE is developing Aldbrough Hydrogen Storage, a new build hydrogen storage facility, with a view to participating in this allocation round.

Energy Customer Solutions

ENERGY CUSTOMER SOLUTIONS OVERVIEW

SSE Business Energy in Great Britain (non-domestic) and SSE Airtricity on the island of Ireland (domestic and non-domestic) provide a shopfront and route to market for SSE's generation, renewable green products and low-carbon energy solutions. Across Great Britain and the island of Ireland, the primary focus has been on supporting customers, managing external market volatility, modernising systems and expanding the green energy and low carbon product offerings to enable customers to reduce their energy consumption and carbon emissions.

SSE Business Energy

SSE Business Energy key performance indicators

SSE Business Energy	March 24	March 23
SSE Business Energy adjusted & reported operating profit - £m	95.8	15.7
Electricity Sold - GWh	10,693	12,108
Gas Sold - mtherms	168	200
Aged Debt (60 days past due) - £m	336	167
Bad debt expense - £m	113	108
Energy customers' accounts - m	0.38	0.43

operational delivery

The current year has seen the business return to a higher level of profitability, reflecting the well-established competitive pricing and hedging controls in the business. However, it still remains a challenging environment for consumers and customer-facing businesses which has led to a customer support fund of £15m being established in the period to support customers including small businesses, voluntary and charitable organisations.

Enabling customers to optimise their energy consumption remains a key focus with the development of data tools and a 26% increase in smart meter installations year on year. The business has also invested considerably to improve customer experience and to meet future needs by upgrading its legacy billing platform and implementing digital technologies.

Connecting customers with SSE Renewables assets continues to grow with additional corporate customers taking CPPA products during the year. SSE Business Energy has also trialled a new flexibility service called EnergiFlex, enabling customers to participate in National Grid's Demand Flexibility Service (DFS) and incentivising businesses to reduce demand during peak hours to help balance the grid.

For additional financial performance commentary please refer to the Group Financial Review.

GROWTH OPPORTUNITIES

The strength of the BE book and the strong portfolio mix means the business is well positioned to expand its product suite. Under the SSE Energy Solutions brand, the business is delivering solutions to help customers reduce carbon emissions and energy costs across multiple sectors. Our digital capability is rapidly expanding, enabling us to offer increased flexibility and energy optimisation.

SSE Airtricity

SSE Airtricity key performance indicators

SSE Airtricity	March 24	March 23
Airtricity adjusted operating profit - £m	95.0	5.6
Airtricity reported operating profit - £m	94.5	5.2
Aged Debt (60 days past due) - £m	18.3	11.0
Bad debt expense - £m	13.7	7.8
Airtricity Electricity Sold - GWh	6,400	5,795
Airtricity Gas Sold - mtherms	199	193
All Ireland energy market customers (Ire) - m	0.75	0.74

OPERATIONAL DELIVERY

Maintaining SSE Airtricity's commitment to help its customers remains a key focus for the business with consecutive tariff reductions taking effect in October 2023 and February 2024.

Continuation into 2023/24 of support for financially vulnerable customers was provided under the terms of the €25m customer support fund established in 2022/23. A further €5m all-island Community Fund was announced in May 2024 to support communities on the path to net zero.

SSE Airtricity continued its focus on enabling access to low carbon solutions for its customers including the delivery of 500 home energy upgrades during the year. The business strives to continually improve customer experience, including through the expansion of digital tools such as AI to enhance the offering.

For additional financial performance commentary please refer to the Group Financial Review.

GROWTH OPPORTUNITIES

SSE Airtricity remains focused on continued growth of its energy efficiency and low-carbon solutions offering with planned expansion into the Northern Ireland's domestic and business markets. Investment in innovations such as demand side management and the further expansion of low-carbon solutions provides additional avenues for growth.

SSE Enterprise

SSE Enterprise key performance indicators

SSE ENTERPRISE	March 24	March 23
SSE Enterprise adjusted operating (loss) - £m	(25.6)	(7.0)
SSE Enterprise reported operating (loss) - £m	(25.6)	(13.1)
SSE Heat Network Customer Accounts	12,104	11,431
Biomass, heat network and other capacity - MW	26	26
Biomass, heat network and other output - GWh	105	96

SSE Enterprise overview

SSE Enterprise (previously Distributed Energy) aspires to be the UK and Ireland's leading provider of local clean energy infrastructure. The business is well positioned for future growth, providing local authorities and commercial customers with low-carbon and smart digital energy solutions with district heat networks, EV charging infrastructure, private wires, behind the meter solar and battery, and Independent Distribution Network Operator (IDNO) capability.

Operational delivery

Operational availability across the portfolio of 18 heat networks across Scotland and England has remained strong during the year, with Slough Heat and Power in particular benefiting from additional connections to deliver electric, water and steam services across Slough Trading Estate.

SSE Enterprise has continued to advance its IDNO capabilities, including the development of a 150MVA private network connection trial at Imperial Park, bringing the total capacity at that site to around 400MVA.

Progression of the businesses' EV infrastructure growth strategy continues, with 13 electric charging hubs either completed or built during the period. This includes the upcoming launches of Scotland's most powerful EV charging hub in Myrekirk, Dundee (2.5MVA) and SSE's first EV hub in the Republic of Ireland in Lough Sheever (800kVA).

The smart digital energy solutions business continues to support value creation within SSE, working with the Energy Markets team to optimise the front of meter battery trading activity for the Group. Externally, the business also secured contracts to provide optimisation services for a 500MW battery energy storage system project in Coalburn, Scotland, one of the largest of its kind in Europe.

For financial performance commentary please refer to the Group Financial Review.

Growth opportunities

The size and scale of the pipeline of opportunities for SSE Enterprise has continued to increase during the year, as the business looks to develop its whole-system approach to local networks, including behind-the-meter solar and battery, and energy optimisation services.

The business has seized a number of opportunities to help local authorities execute local energy projects, signing several strategic energy partnerships with Greater Manchester Combined Authority, West Midlands Combined Authority and Newcastle City Council, with an ambition to go further.

In December 2023, the UK Government published a consultation on proposals for a new regulatory and zoning regime to support investment in heat networks in England. The legislative passage of these proposals would help unlock an ambitious heat project pipeline under development by the business that is pioneering innovation in heat distribution. This includes capturing heat from data centres, deep geothermal, electricity network transformers and energy from waste plants.

SSE Energy Markets

SSE Energy markets key performance indicators

SSE ENERGY MARKETS	March 24	March 23
SSE Energy Markets adjusted operating profit - £m	38.9	80.4
SSE Energy Markets reported operating profit/(loss) - £m	590.0	(2,626.0)

SSE ENERGY MARKETS OVERVIEW

SSE Energy Markets - previously Energy Portfolio Management (EPM) - commercially optimises all of SSE's market-based Business Units assets in the wholesale energy markets, securing value on behalf of these businesses by trading in wholesale energy markets and managing volatility through active risk management.

This involves trading the principal commodities to which SSE's asset portfolios are exposed, as well as the spreads between two or more commodity prices (e.g. spark spreads): power (baseload and other products); gas; and carbon (emissions allowances). Each commodity has different risk and liquidity characteristics, which impacts the quantum of hedging possible.

OPERATIONAL DELIVERY

SSE Energy Markets continues to optimise the flexibility of the Group, maximising benefits from the diverse portfolio while mitigating risk around natural market turbulence. Having successfully optimised energy assets in the short-term, Energy Markets is now also the primary decision maker for longer term trading periods, allowing decisions to be made quickly from one Centre of Excellence.

The value Energy Markets secured for SSE's asset portfolio continues to be reported against individual Business Units.

For financial performance commentary please refer to the Group Financial Review.

GROWTH OPPORTUNITIES

As well as taking on a leading role in optimising SSE's market-based assets, SSE Energy Markets is also expanding the ways in which it independently adds value to the Group.

This includes contracts being secured with Copenhagen Infrastructure Partners and Sheaf Energy Limited to deliver trading and optimisation services for their respective energy storage projects. It also includes an increase in trading in European power and gas markets which will also support the wider group's ambition of international growth.

In addition, Energy Markets continues to develop its data and advanced analytics capabilities setting it up well for future developments in the markets.

Alternative Performance Measures

When assessing, discussing and measuring the Group's financial performance, management refer to measures used for internal performance management. These measures are not defined or specified under International Financial Reporting Standards ("IFRS") and as such are considered to be Alternative Performance Measures ("APMs").

By their nature, APMs are not uniformly applied by all preparers including other participants in the Group's industry. Accordingly, APMs used by the Group may not be comparable to other companies within the Group's industry.

Purpose

APMs are used by management to aid comparison and assess historical performance against internal performance benchmarks and across reporting periods. These measures provide an ongoing and consistent basis to assess performance by excluding items that are materially non-recurring, uncontrollable or exceptional. These measures can be classified in terms of their key financial characteristics:

· Profit measures allow management to assess and benchmark underlying business performance during the year. They are primarily used by operational management to measure operating profit contribution and are also used by the Board to assess performance against business plan. The Group has six profit measures, of which adjusted operating profit and adjusted profit before tax are the main focus of management through the financial year and adjusted earnings per share is the main focus of management on an annual basis. In order to derive adjusted earnings per share, the Group has defined adjusted operating profit, adjusted net finance costs, and adjusted current tax charge as components of the adjusted earnings per share calculation. Adjusted EBITDA is used by management as a proxy for cash derived from ordinary operations of the Group.

· Capital measures allow management to track and assess the progress of the Group's significant ongoing investment in capital assets and projects against their investment cases, including the expected timing of their operational deployment and also to provide a measure of progress against the Group's strategic Net Zero Acceleration Programme Plus objectives.

· Debt measures allow management to record and monitor both operating cash generation and the Group's ongoing financing and liquidity position.

There have been no changes to the way the Group calculates its APMs in the current year.

The following section explains the key APMs applied by the Group and referred to in these Summary Financial Statements:

Profit Measures

Group APM	Purpose	Closest equivalent IFRS measure	Adjustments to reconcile to primary financial statements
Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation)	Profit measure	Operating profit	· Movement on operating and joint venture operating derivatives ('certain re-measurements') · Exceptional items · Adjustments to retained Gas Production decommissioning provision · Share of joint ventures and associates' interest and tax · Depreciation and amortisation before exceptional charges (including depreciation and amortisation expense on fair value uplifts) · Share of joint ventures and associates' depreciation and amortisation · Non-controlling share of operating profit · Non-controlling share of depreciation and amortisation · Release of deferred income
Adjusted Operating Profit	Profit measure	Operating profit	· Movement on operating and joint venture operating derivatives ('certain re-measurements') · Exceptional items · Adjustments to retained Gas Production decommissioning provision · Depreciation and amortisation expense on fair value uplifts · Share of joint ventures and associates' interest and tax · Non-controlling share of operating profit
Adjusted Profit Before Tax	Profit measure	Profit before tax	· Movement on operating and financing derivatives ('certain re-measurements') · Exceptional items · Adjustments to retained Gas Production decommissioning provision · Non-controlling share of profit before tax · Depreciation and amortisation expense on fair value uplifts · Interest on net pension assets/liabilities (IAS 19) · Share of joint ventures and associates' tax
Adjusted Net Finance Costs	Profit measure	Net finance costs	· Exceptional items · Movement on financing derivatives · Share of joint ventures and associates' interest · Non-controlling share of financing costs · Interest on net pension assets/liabilities (IAS 19)
Adjusted Current Tax Charge	Profit measure	Tax charge	· Share of joint ventures and associates' tax · Non-controlling share of current tax · Deferred tax including share of joint ventures, associates and non-controlling interests · Tax on exceptional items and certain re-measurements
Adjusted Earnings Per Share	Profit measure	Earnings per share	· Exceptional items · Adjustments to retained Gas Production decommissioning provision · Movements on operating and financing derivatives ('certain re-measurements') · Depreciation and amortisation expense on fair value uplifts · Interest on net pension assets/liabilities (IAS 19) · Deferred tax including share of joint ventures, associates and non-controlling interests

Rationale for Adjustments to Profit Measure

1. Movement on operating and financing derivatives ('certain re-measurements')

This adjustment can be designated between operating and financing derivatives.

Operating derivatives are contracts where the Group's SSE Energy Markets (formerly Energy Portfolio Management ('EPM')) function enters into forward commitments or options to buy or sell electricity, gas and other commodities to meet the future demand requirements of the Group's SSE Business Energy and SSE Airtricity operating units, or to optimise the value of the production from SSE Renewables and Thermal generation assets or to conduct other trading subject to the value at risk limits set out by the Energy Markets Risk Committee. Certain of these contracts (predominantly purchase contracts) are determined to be derivative financial instruments under IFRS 9 and as such are required to be recorded at their fair value. Changes in the fair value of those commodity contracts designated as IFRS 9 financial instruments are reflected in the income statement (as part of 'certain re-measurements'). The Group shows the change in the fair value of these forward contracts separately as this mark-to-market movement is not relevant to the underlying performance of its operating segments due to the volatility that can arise on revaluation. The Group will recognise the underlying value of these contracts as the relevant commodity is delivered, which will predominantly be within the subsequent 12 to 24 months. Conversely, commodity contracts that are not financial instruments under IFRS 9 (predominantly sales contracts) are accounted for as 'own use' contracts and are consequently not recorded until the commodity is delivered and the contract is settled. Gas inventory purchased by the Group's Gas Storage business for secondary trading opportunities is also held at fair value with gains and losses on re-measurement recognised as part of 'certain re-measurements' in the income statement. Finally, the mark-to-market valuation movements on the Group's contracts for difference contracts entered into by SSE Renewables that are not designated as government grants and which are measured as Level 3 fair value financial instruments are also included within 'certain re-measurements'.

Financing derivatives include all fair value and cash flow interest rate hedges, non-hedge accounted (mark-to-market) interest rate derivatives, cash flow foreign exchange hedges and non-hedge accounted foreign exchange contracts entered into by the Group to manage its banking and liquidity requirements as well as risk management relating to interest rate and foreign exchange exposures. Changes in the fair value of those financing derivatives are reflected in the income statement (as part of 'certain re-measurements'). The Group shows the change in the fair value of these forward contracts separately as this mark-to-market movement is not relevant to the underlying performance of its operating segments.

The re-measurements arising from operating and financing derivatives, and the tax effects thereof, are disclosed separately to aid understanding of the underlying performance of the Group.

2. Exceptional items

Exceptional charges or credits, and the tax effects thereof, are considered unusual by nature or scale and of such significance that separate disclosure is required for the underlying performance of the Group to be properly understood. Further explanation for the classification of an item as exceptional is included in note 4.2.

3. Adjustments to retained Gas Production decommissioning provision

The Group retains an obligation for 60% of the decommissioning liabilities of its former Gas Production business which was disposed in October 2021. The revaluation adjustments relating to these decommissioning liabilities are accounted for through the Group's consolidated income statement and are removed from the Group's adjusted profit measures as the revaluation of the provision is not considered to be part of the Group's core continuing operations.

4. Share of joint ventures and associates' interest and tax

This adjustment can be split between the Group's share of interest and the Group's share of tax arising from its investments in equity accounted joint ventures and associates. The Group is required to report profit before interest and tax ('operating profit') including its share of the profit after tax from its equity accounted joint ventures and associates. However, for internal performance management purposes and for consistency of treatment, SSE reports its adjusted operating profit measures before its share of the interest and/or tax on joint ventures and associates.

5. Share of joint ventures and associates' depreciation and amortisation

For management purposes, the Group considers EBITDA (earnings before interest, tax, depreciation and amortisation) based on a sum-of-the-parts derived metric which includes a share of the EBITDA from equity accounted investments. While this is not equal to adjusted cash generated from operating activities, it is considered useful by management in assessing a proxy for such a measure, given the complexity of the Group structure and the range of investment structures utilised. For the purpose of calculating the 'Net Debt to EBITDA' metric, 'adjusted EBITDA' is further refined to remove the proportion of adjusted EBITDA from equity-accounted joint ventures relating to off-balance sheet debt (see note 6.3).

6. Depreciation and amortisation expense on fair value uplifts

The Group's strategy includes the realisation of value (developer gains) from divestments of stakes in SSE Renewables' offshore and international developments. In addition, for strategic purposes the Group may also decide to bring in equity partners to other businesses and assets. Where SSE's interest in such vehicles changes from full to joint control, and the subsequent arrangement is classified as an equity accounted joint venture, SSE may recognise a fair value uplift on the remeasurement of its retained equity investment. Those non-cash accounting uplifts will be treated as exceptional gains in the year of the relevant transactions completing. Furthermore, SSE may acquire businesses or joint venture interests which are determined to generate an exceptional opening gain on acquisition and accordingly will record an accounting fair value uplift to the opening assets acquired. These uplifts create assets or adjustments to assets, which are depreciated or amortised over the remaining life of the underlying assets or contracts in those businesses with the charge being included in the Group's depreciation and amortisation expense. The Group's adjusted operating profit, adjusted profit before tax and adjusted earnings per share are adjusted to exclude any additional depreciation, amortisation and impairment expense arising from the fair value uplifts given these charges are derived from significant one-off gains, which are treated as exceptional when initially recognised.

7. Release of deferred income

The Group deducts the release of deferred income in the year from its adjusted EBITDA metric as it principally relates to customer contributions against depreciating assets. As the metric adds back depreciation, the income is also deducted.

8. Interest on net pension assets/liabilities (IAS 19 "Employee Benefits")

The Group's interest income relating to defined benefit pension schemes is derived from the net assets of the schemes as valued under IAS 19. This will mean that the credit or charge recognised in any given year will be dependent on the impact of actuarial assumptions such as inflation and discount rates. The Group excludes these from its adjusted profit measures due to the non-cash nature of these charges or credits.

9. Deferred tax

The Group adjusts for deferred tax when arriving at adjusted profit after tax, adjusted earnings per share and its adjusted effective rate of tax. Deferred tax arises as a result of differences in accounting and tax bases that give rise to potential future accounting credits or charges. As the Group remains committed to its ongoing capital programme, the liabilities associated are not expected to reverse and accordingly the Group excludes these from its adjusted profit measures.

10. Results attributable to non-controlling interest holders

The Group's structure includes non-wholly owned but controlled subsidiaries which are consolidated within the financial statements of the Group under IFRS. The most significant of those is SSEN Transmission, a 25% stake in which was divested on 30 November 2022 (see note 12). In the current and prior year the Group has removed the share of profit attributable to holders of non-controlling equity stakes in such businesses from the point when the ownership structure changed (i.e. for SSEN Transmission, with effect from 1 December 2022) from all of its profit measures, to report all metrics based on the share of profits items attributable to the ordinary equity holders of the Group. The adjustment has been applied consistently to all of the Group's adjusted profit measures, including removing proportionate non-controlling share of operating profit and depreciation and amortisation from the Group's adjusted EBITDA metric; removing the non-controlling share of operating profit from the Group's adjusted operating profit metric; removing the non-controlling share of net finance costs from the Group's adjusted net finance costs metric; and removing the non-controlling interest share of current tax from the Group's adjusted current tax metric. There is no impact to disclosures for 31 March 2022.

	March 2024
Continuing operations (£m)		Reported	Movement on derivatives	Exceptional items	Adjustments to Gas Production decommissioning provision	Depreciation on FV uplifts	Joint venture interest and tax	Interest on net pension asset	Deferred tax	Share of profit attributable to non-controlling interests		Adjusted
Operating Profit		2,608.2	(522.7)	266.3	9.9	19.0	184.8	-	-		(139.1)	2,426.4
Net finance costs		(113.1)	(6.1)	(0.3)	-	-	(110.7)	(26.2)	-		4.7	(251.7)
Profit before taxation		2,495.1	(528.8)	266.0	9.9	19.0	74.1	(26.2)	-		(134.4)	2,174.7
Taxation		(610.7)	130.3	(23.3)	-	-	(74.1)	-	198.8		8.0	(371.0)
Profit after taxation		1,884.4	(398.5)	242.7	9.9	19.0	-	(26.2)	198.8		(126.4)	1,803.7
Attributable to other equity holders		(173.9)	-	-	-	-	-	-	(25.6)		126.4	(73.1)
Profit attributable to ordinary shareholders		1,710.5	(398.5)	242.7	9.9	19.0	-	(26.2)	173.2		-	1,730.6
Number of shares for EPS		1,091.8										1,091.8
Earnings per share		156.7										158.5

EBITDA

		March 2024
Adjusted operating profit from continuing operations £m				Share of joint ventures and associates' depreciation and amortisation £m		Release of deferred income £m			Depreciation on FV uplifts £m		Depreciation, impairment and amortisation before exceptional charges £m		Share of depreciation, impairment and amortisation before exceptional items attributable to non-controlling interests £m				Adjusted EBITDA £m
2,426.4				208.8		(13.0)			(19.0)		724.9		(32.5)				3,295.6

	March 2023
Continuing operations (£m)			Reported		Movement on derivatives		Exceptional items	Adjustments to Gas Production decommissioning provision		Depreciation on FV uplifts		Joint venture interest and tax	Interest on net pension asset	Deferred tax	Share of profit attributable to non-controlling interests			Adjusted
Operating (loss)/profit			(146.3)		2,514.3		0.6	(50.5)		28.8		213.2	-	-		(30.9)		2,529.2
Net finance costs			(59.3)		(201.9)		(0.2)	-		-		(70.1)	(16.2)	-		2.1		(345.6)
(Loss)/profit before taxation			(205.6)		2,312.4		0.4	(50.5)		28.8		143.1	(16.2)	-		(28.8)		2,183.6
Taxation			110.0		(460.5)		34.1	-		-		(143.1)	-	99.6		1.1		(358.8)
(Loss)/profit after taxation			(95.6)		1,851.9		34.5	(50.5)		28.8		-	(16.2)	99.6		(27.7)		1,824.8
Attributable to other equity holders			(62.4)		-		-	-		-		-	-	(4.1)		27.7		(38.8)
(Loss)/profit attributable to ordinary shareholders			(158.0)		1,851.9		34.5	(50.5)		28.8		-	(16.2)	95.5		-		1,786.0
Number of shares for EPS			1,075.6															1,075.6
(Losses)/earnings per share			(14.7)															166.0

EBITDA

	March 2023
Adjusted operating profit from continuing operations £m		Share of joint ventures and associates' depreciation and amortisation £m			Release of deferred income £m		Depreciation on FV uplifts £m		Depreciation, impairment and amortisation before exceptional charges £m		Share of depreciation, impairment and amortisation before exceptional items attributable to non-controlling interests £m			Adjusted EBITDA £m
2,529.2		201.1			(13.9)		(28.8)		704.2		(9.7)			3,382.1
March 2022
Continuing operations (£m)			Reported	Movement on derivatives		Exceptional items		Adjustments to Gas Production decommissioning provision	Depreciation on FV uplifts	Joint venture interest and tax		Interest on net pension asset	Deferred tax	Adjusted
Operating profit			3,749.5	(2,097.8)		(301.8)		13.1	20.6	147.3		-	-	1,530.9
Net finance costs			(273.2)	(21.0)		(3.2)		-	-	(67.8)		(7.6)	-	(372.8)
Profit before taxation			3,476.3	(2,118.8)		(305.0)		13.1	20.6	79.5		(7.6)	-	1,158.1
Taxation			(881.3)	408.0		323.7		-	-	(79.5)		-	122.0	(107.1)
Profit after taxation			2,595.0	(1,710.8)		18.7		13.1	20.6	-		(7.6)	122.0	1,051.0
Attributable to other equity holders			(50.7)	-		-		-	-	-		-	-	(50.7)
Profit attributable to ordinary shareholders			2,544.3	(1,710.8)		18.7		13.1	20.6	-		(7.6)	122.0	1,000.3
Number of shares for EPS			1,055.0											1,055.0
Earnings per share			241.2											94.8

EBITDA

March 2022

Adjusted operating profit from continuing operations

£m

Share of joint ventures and associates' depreciation and amortisation

£m

Release of deferred income

£m

Depreciation on FV uplifts

£m

Depreciation, impairment and amortisation before exceptional charges

£m

Adjusted EBITDA

£m

1,530.9

146.6

(17.6)

(20.6)

612.0

2,251.3

Debt Measure

Group APM

Purpose

Closest equivalent IFRS measure

Adjustments to reconcile to primary financial statements

Adjusted Net Debt and Hybrid Capital

Debt measure

Unadjusted net debt

· Hybrid equity

· Cash held and posted as collateral

· Lease obligations

· Non-controlling share of borrowings and cash

rationale for Adjustments to Debt measure

11. Hybrid equity

The characteristics of certain hybrid capital securities mean that they qualify for recognition as equity rather than debt under IFRS. Consequently, their coupon payments are presented within equity rather than within finance costs. As a result, the coupon payments are not included in SSE's adjusted profit before tax measure. In order to present total funding provided from sources other than ordinary shareholders, SSE presents its adjusted net debt measure inclusive of hybrid capital to better reflect the Group's funding position.

12. Cash held and posted as collateral

Cash held and posted as collateral refers to cash balances received from and deposited with counterparties including trading exchanges. Collateral balances mostly represent initial and variation margin, required as part of the management of the Group's exposures on commodity contracts, that will be received on maturity of the related trades. Loans with a maturity of less than three months are also included in this adjustment. The Group includes this adjustment in order to better reflect the immediate cash resources to which it has access, which in turn better reflects the Group's funding position.

13. Lease obligations

SSE's reported loans and borrowings include lease liabilities on contracts within the scope of IFRS 16, which are not directly related to external financing of the Group. The Group excludes these liabilities from its adjusted net debt and hybrid capital measure to better reflect the Group's underlying funding position with its primary sources of capital.

14. Debt and cash attributable to non-controlling interests

	March 2024	March 2023	March 2022
	£m	£m	£m
Unadjusted net debt	(8,097.8)	(8,168.1)	(8,015.4)
Cash (held)/posted as collateral	(353.2)	316.3	74.7
Lease obligations	407.5	405.9	393.5
External net debt attributable to non-controlling interests	490.2	434.2	-
Adjusted Net Debt	(7,553.3)	(7,011.7)	(7,547.2)
Hybrid equity	(1,882.4)	(1,882.4)	(1,051.0)
Adjusted Net Debt and Hybrid Capital	(9,435.7)	(8,894.1)	(8,598.2)

Capital Measures

Group APM

Purpose

Closest equivalent IFRS measure

Adjustments to reconcile to primary financial statements

Adjusted Investment and Capital Expenditure

Capital measure

Capital additions to intangible assets and property, plant and equipment

· Customer funded additions

· Allowances and certificates

· Additions acquired through business combinations

· Joint ventures and associates' additions funding

· Non-controlling share of capital expenditure

· Lease asset additions

Adjusted Investment, Capital and Acquisition Expenditure

Capital measure

Capital additions to intangible assets and property, plant and equipment

· Customer funded additions

· Allowances and certificates

· Additions acquired through business combinations

· Joint ventures and associates' additions funding

· Non-controlling share of capital expenditure

· Lease asset additions

· Acquisition cash consideration

rationale for Adjustments to Capital Measures

15. Customer funded additions

Customer funded additions represents additions to electricity and other networks funded by customer contributions. Given these are directly funded by customers, these additions have been excluded to better reflect the Group's underlying investment position.

16. Allowances and certificates

Allowances and certificates consist of purchased carbon emissions allowances and generated or purchased renewable obligations certificates (ROCs) and additions in the year are not included in the Group's 'capital expenditure and investment' APM to better reflect the Group's investment in enduring operational assets.

17. Additions acquired through business combinations

Where the Group acquires an early-stage development company, which is classified as the acquisition of an asset, or group of assets and not the acquisition of a business, the acquisition is treated as an addition to intangible assets or property, plant and equipment and is included within 'adjusted investment and capital expenditure'. Where the Group acquires an established business or interest in an equity-accounted joint venture requiring a fair value assessment in line with the principles of IFRS 3 'Business Combinations', the fair value of acquired consolidated tangible or intangible assets are excluded from the Group's 'adjusted investment and capital expenditure', as they are not direct capital expenditure by the Group. However, the fair valuation of consideration paid for the business or investment is included in the Group's 'adjusted investment, capital and acquisition expenditure' metric, see 23 below. Please refer to note 12 for detail of the Group's acquisitions in the year.

18. Additions subsequently disposed or impaired

For consistency of presentation, any capital additions in the year that are subsequently written-down or disposed are removed from the APM.

19. Joint ventures and associates' additions funding

Joint ventures and associates' additions included in the Group's capital measures represent the direct loan or equity funding provided by the Group to joint venture and associate arrangements in relation to capital expenditure projects. This has been included to better reflect the Group's use of directly funded equity accounted vehicles to grow the Group's asset base. Asset additions funded by project finance raised within the Group's joint ventures and associates are not included in this adjustment.

20. Non-controlling share of capital expenditure

21. Refinancing proceeds/refunds

The Group's model for developing large scale capital projects within joint ventures and associates involves project finance being raised within those entities. Where the Group funds early-stage capex which is then subsequently reimbursed to SSE following the receipt of project finance within the vehicle, the refinancing proceeds are included in the Group's net adjusted investment and capital expenditure metric. This is consistent with the inclusion of the initial investment in the metric as explained at 17 above. There were no refinancing proceeds in the year ended 31 March 2024 (2023: £nil). In the year ended 31 March 2022, Doggerbank windfarm reimbursed SSE for previous funding of £136.7m. These receipts have been deducted from the Group's adjusted investment and capital expenditure metric.

22. Lease additions

Additions of right of use assets under the Group's IFRS 16 compliant policies for lease contracts are excluded from the Group's adjusted capital measures as they do not represent directly funded capital investment. This is consistent with the treatment of lease obligations explained at 13, above.

23. Acquisition cash consideration in relation to business combinations

The Group has outlined a significant investment programme which will partly be achieved through the acquisition of businesses with development opportunities for the Group. The cash consideration paid for these entities is included within the Group's adjusted investment, capital and acquisition expenditure metric as it provides stakeholders an accurate basis of cash investment into the Group's total development pipeline and is consistent with the reporting of the Group's Net Zero Acceleration Programme Plus.

	March 2024	March 2023	March 2022
	£m	£m	£m
Capital additions to intangible assets	1,314.2	1,688.6	921.0
Capital additions to property, plant and equipment	1,971.4	1,500.1	1,392.9
Capital additions to intangible assets and property, plant and equipment	3,285.6	3,188.7	2,313.9
Customer funded additions	(152.0)	(80.9)	(91.3)
Allowances and certificates	(774.5)	(805.2)	(544.5)
Additions through business combinations	-	(515.2)	(197.8)
Additions subsequently disposed/impaired	-	-	(13.9)
Joint ventures and associates' additions	390.0	498.4	682.5
Non-controlled interests share of capital expenditure	(199.4)	(46.7)	-
Refinancing (proceeds)/refunds	-	-	(136.7)
Lease asset additions	(73.0)	(78.5)	(85.7)
Adjusted Investment and Capital Expenditure	2,476.7	2,160.6	1,926.5
Acquisition cash consideration	-	642.7	141.3
Adjusted Investment, Capital and Acquisition Expenditure	2,476.7	2,803.3	2,067.8

Impact of discontinued operations on the Group's APMs

The following metrics have been adjusted in all years presented to exclude the contribution of the Group's investment in Scotia Gas Networks Limited ("SGN") which was disposed on 22 March 2022 and the Group's Gas Production operations which were disposed on 14 October 2021:

· Adjusted EBITDA;

· Adjusted operating profit;

· Adjusted net finance costs;

· Adjusted profit before tax;

· Adjusted current tax charge; and

· Adjusted earnings per share.

'Adjusted net debt and hybrid capital'; 'adjusted investment and capital expenditure'; and 'adjusted investment, capital and acquisition expenditure' have not been adjusted as the Group continues to fund the discontinued operations until the date of disposal.

The following table summarises the impact of excluding discontinued operations from the APMs of the continuing activities of the Group in the year ended 31 March 2022:

	March 2024	March 2023	March 2022
	£m	£m	£m
Adjusted EBITDA of SSE Group (including discontinued operations)	3,295.6	3,382.1	2,384.8
Less: Gas Production profit	-	-	(101.4)
Less: SGN profit	-	-	(32.1)
Adjusted EBITDA of continuing operations	3,295.6	3,382.1	2,251.3

Adjusted operating profit of SSE Group (including discontinued operations)	2,426.4	2,529.2	1,653.3
Less: Gas Production profit	-	-	(101.4)
Less: SGN profit	-	-	(21.0)
Adjusted operating profit of continuing operations	2,426.4	2,529.2	1,530.9

Adjusted net finance costs of SSE Group (including discontinued operations)	251.7	345.6	377.6
Less: Gas Production	-	-	(0.1)
Less: SGN	-	-	(4.7)
Adjusted net finance costs of continuing operations	251.7	345.6	372.8

Adjusted profit before tax of SSE Group (including discontinued operations)	2,174.7	2,183.6	1,275.7
Less: Gas Production profit	-	-	(101.3)
Less: SGN profit	-	-	(16.3)
Adjusted profit before tax of continuing operations	2,174.7	2,183.6	1,158.1

Adjusted current tax of SSE Group (including discontinued operations)	371.0	358.8	109.4
Less: SGN current tax charge	-	-	(2.3)
Adjusted current tax of continuing operations	371.0	358.8	107.1

Adjusted earnings per share of SSE Group (including discontinued operations)	158.5	166.0	105.6
Less: Gas Production earnings per share	-	-	(9.6)
Less: SGN earnings per share	-	-	(1.2)
Adjusted earnings per share of continuing operations	158.5	166.0	94.8

The remaining APMs presented by the Group are unchanged in all periods presented by the discontinued operations.

summary Financial Statements

Consolidated Income Statement

for the year ended 31 March 2024

		2024			2023
		Before exceptional items and certain re-measure ments	Exceptional items and certain re-measure-ments (note 7)	Total	Before exceptional items and certain re-measure-ments	Exceptional items and certain re-measure-ments (note 7)	Total
	Note	£m	£m	£m	£m	£m	£m

Continuing operations
Revenue	6	10,457.2	-	10,457.2	12,490.7	-	12,490.7
Cost of sales		(6,568.3)	461.3	(6,107.0)	(9,933.2)	(2,717.2)	(12,650.4)
Gross profit/(loss)		3,888.9	461.3	4,350.2	2,557.5	(2,717.2)	(159.7)
Operating costs		(1,577.7)	(270.9)	(1,848.6)	(1,431.6)	(230.4)	(1,662.0)
Debt impairment charges		(128.8)	-	(128.8)	(91.0)	-	(91.0)
Other operating income		116.7	4.6	121.3	1,015.0	89.1	1,104.1
Operating profit/(loss) before joint ventures and associates		2,299.1	195.0	2,494.1	2,049.9	(2,858.5)	(808.6)
Joint ventures and associates:
Share of operating profit		237.5	-	237.5	531.9	140.7	672.6
Share of interest		(110.7)	-	(110.7)	(70.1)	-	(70.1)
Share of movement in derivatives		-	61.4	61.4	-	202.9	202.9
Share of tax		(58.8)	(15.3)	(74.1)	(104.0)	(39.1)	(143.1)
Share of profit on joint ventures and associates		68.0	46.1	114.1	357.8	304.5	662.3
Operating profit/(loss) from continuing operations	6	2,367.1	241.1	2,608.2	2,407.7	(2,554.0)	(146.3)
Finance income	8	198.8	6.4	205.2	135.3	202.1	337.4
Finance costs	8	(318.3)	-	(318.3)	(396.7)	-	(396.7)
Profit/(loss) before taxation		2,247.6	247.5	2,495.1	2,146.3	(2,351.9)	(205.6)
Taxation	9	(519.0)	(91.7)	(610.7)	(355.5)	465.5	110.0
Profit/(loss) for the year from continuing operations		1,728.6	155.8	1,884.4	1,790.8	(1,886.4)	(95.6)
Discontinued operations
Profit from discontinued operation, net of tax		-	-	-	-	35.0	35.0
Profit/(loss) for the year		1,728.6	155.8	1,884.4	1,790.8	(1,851.4)	(60.6)

Attributable to:
Ordinary shareholders of the parent		1,554.7	155.8	1,710.5	1,728.4	(1,851.4)	(123.0)
Non-controlling interests		100.8	-	100.8	23.6	-	23.6
Other equity holders		73.1	-	73.1	38.8	-	38.8

Earnings/(losses) per share
Basic (pence)	11			156.7			(11.4)
Diluted (pence)	11			156.5			(11.4)
Earnings/(losses) per share - continuing operations
Basic (pence)	11			156.7			(14.7)
Diluted (pence)	11			156.5			(14.7)

Dividends
Interim dividend paid per share (pence)	10			20.0			29.0
Proposed final dividend per share (pence)	10			40.0			67.7
				60.0			96.7

The accompanying notes are an integral part of the financial information in this announcement.

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2024

	2024 £m	2023 £m
Profit/(loss) for the year
Continuing operations	1,884.4	(95.6)
Discontinued operations	-	35.0
	1,884.4	(60.6)

Other comprehensive income:

Items that will be reclassified subsequently to profit or loss:
Net gains on cash flow hedges	6.5	43.3
Transferred to assets and liabilities on cash flow hedges	2.1	(12.7)
Taxation on cashflow hedges	(0.3)	(8.1)
	8.3	22.5

Share of other comprehensive (loss)/income of joint ventures and associates, net of taxation	(40.9)	342.4
Exchange difference on translation of foreign operations	(66.6)	72.5
Gain/(loss) on net investment hedge	30.9	(43.1)
	(68.3)	394.3

Items that will not be reclassified to profit or loss:
Actuarial loss on retirement benefit schemes, net of taxation	(116.4)	(59.4)
Gains/(losses) on revaluation of investments in equity instruments, net of taxation	3.5	(0.4)
	(112.9)	(59.8)

Other comprehensive (loss)/gain, net of taxation	(181.2)	334.5

Total comprehensive income for the year	1,703.2	273.9

Total comprehensive income for the year arises from:
Continuing operations	1,703.2	238.9
Discontinued operations
Profit from discontinued operations	-	35.0
Total comprehensive income from discontinued operations	-	35.0
Total comprehensive income for the year	1,703.2	273.9


Attributable to:
Ordinary shareholders of the parent	1,529.3	206.4
Non-controlling interests	100.8	28.7
Other equity holders	73.1	38.8
	1,703.2	273.9

The accompanying notes are an integral part of the financial information in this announcement.

Consolidated Balance Sheet

as at 31 March 2024

	Note	2024 £m	2023 (restated*) £m
Assets
Property, plant and equipment		16,611.5	15,395.9
Goodwill and other intangible assets		2,324.6	1,960.3
Equity investments in joint ventures and associates		1,963.2	1,975.7
Loans to joint ventures and associates		1,352.9	1,115.4
Other investments		3.2	27.4
Other receivables		170.1	149.5
Derivative financial assets		64.2	246.0
Retirement benefit assets	15	421.6	541.1
Non-current assets		22,911.3	21,411.3

Intangible assets		754.7	454.9
Inventories		343.0	394.9
Trade and other receivables		2,654.1	3,245.1
Current tax asset		35.1	19.9
Cash and cash equivalents		1,035.9	891.8
Derivative financial assets		536.1	759.2
Current assets		5,358.9	5,765.8
Total assets		28,270.2	27,177.1

Liabilities
Loans and other borrowings	13	1,128.0	1,820.6
Trade and other payables		3,322.5	2,658.6
Current tax liabilities		9.3	9.1
Financial guarantee liabilities		3.1	4.4
Provisions		52.7	29.4
Derivative financial liabilities		345.2	1,021.0
Current liabilities		4,860.8	5,543.1

Loans and other borrowings	13	8,005.7	7,239.3
Deferred tax liabilities		1,536.8	1,299.1
Trade and other payables		1,092.8	959.9
Financial guarantee liabilities		36.4	66.5
Provisions		712.4	742.7
Derivative financial liabilities		222.2	243.3
Non-current liabilities		11,606.3	10,550.8
Total liabilities		16,467.1	16,093.9
Net assets		11,803.1	11,083.2

Equity
Share capital	14	548.1	547.0
Share premium		820.1	821.2
Capital redemption reserve		52.6	52.6
Hedge reserve		407.6	441.2
Translation reserve		(2.6)	32.1
Retained earnings		7,345.0	6,657.6
Equity attributable to ordinary shareholders of the parent		9,170.8	8,551.7
Hybrid equity	14	1,882.4	1,882.4
Attributable to non-controlling interests		749.9	649.1
Total equity		11,803.1	11,083.2

*The comparative Consolidated Balance Sheet has been restated. See notes 2.3.2 and 3.1.

The accompanying notes are an integral part of the financial information in this announcement.

Consolidated Statement of Changes in Equity

for the year ended 31 March 2024

	Share capital	Share premium	Capital redemption reserve	Hedge reserve	Translation reserve	Retained earnings	Total attributable to ordinary shareholders	Hybrid equity	Total equity before non-controlling interests	Non-controlling interests	Total equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 April 2023 (restated*)	547.0	821.2	52.6	441.2	32.1	6,657.6	8,551.7	1,882.4	10,434.1	649.1	11,083.2

Profit for the year	-	-	-	-	-	1,710.5	1,710.5	73.1	1,783.6	100.8	1,884.4
Other comprehensive loss	-	-	-	(33.6)	(34.7)	(112.9)	(181.2)	-	(181.2)	-	(181.2)
Total comprehensive income for the year	-	-	-	(33.6)	(34.7)	1,597.6	1,529.3	73.1	1,602.4	100.8	1,703.2
Dividends to shareholders	-	-	-	-	-	(956.4)	(956.4)	-	(956.4)	-	(956.4)
Scrip dividend related share issue	1.1	(1.1)	-	-	-	38.6	38.6	-	38.6	-	38.6
Issue of treasury shares	-	-	-	-	-	9.2	9.2	-	9.2	-	9.2
Distributions to Hybrid equity holders	-	-	-	-	-	-	-	(73.1)	(73.1)	-	(73.1)
Credit in respect of employee share awards	-	-	-	-	-	20.2	20.2	-	20.2	-	20.2
Investment in own shares	-	-	-	-	-	(21.8)	(21.8)	-	(21.8)	-	(21.8)
At 31 March 2024	548.1	820.1	52.6	407.6	(2.6)	7,345.0	9,170.8	1,882.4	11,053.2	749.9	11,803.1

*The comparative Statement of Changes in Equity has been restated. See note 3.1.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2023

	Share capital	Share premium	Capital redemption reserve	Hedge reserve	Translation reserve	Retained earnings	Total attributable to ordinary shareholders	Hybrid equity	Total equity before non-controlling interests	Non-controlling interests	Total equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 April 2022	536.5	835.1	49.2	77.5	6.6	6,572.9	8,077.8	1,051.0	9,128.8	40.6	9,169.4
Impact of adoption of IFRS 17 (see note 3.1)	-	-	-	-	-	(32.2)	(32.2)	-	(32.2)	-	(32.2)
At 1 April 2022 (restated*)	536.5	835.1	49.2	77.5	6.6	6,540.7	8,045.6	1,051.0	9,096.6	40.6	9,137.2
Profit for the year	-	-	-	-	-	(123.0)	(123.0)	38.8	(84.2)	23.6	(60.6)
Other comprehensive income/(loss)	-	-	-	363.7	25.5	(59.8)	329.4	-	329.4	5.1	334.5
Total comprehensive income for the year	-	-	-	363.7	25.5	(182.8)	206.4	38.8	245.2	28.7	273.9
Dividends to shareholders	-	-	-	-	-	(955.8)	(955.8)	-	(955.8)	-	(955.8)
Scrip dividend related share issue	13.9	(13.9)	-	-	-	481.5	481.5	-	481.5	-	481.5
Issue of treasury shares	-	-	-	-	-	18.0	18.0	-	18.0	-	18.0
Distributions to Hybrid equity holders	-	-	-	-	-	-	-	(38.8)	(38.8)	-	(38.8)
Issue of Hybrid equity	-	-	-	-	-	-	-	831.4	831.4	-	831.4
Share buy back	(3.4)	-	3.4	-	-	(107.6)	(107.6)	-	(107.6)	-	(107.6)
Disposal of stake in SSEN Transmission (see note 12)	-	-	-	-	-	868.3	868.3	-	868.3	579.8	1,448.1
Credit in respect of employee share awards	-	-	-	-	-	18.7	18.7	-	18.7	-	18.7
Investment in own shares	-	-	-	-	-	(23.4)	(23.4)	-	(23.4)	-	(23.4)
At 31 March 2023 (restated*)	547.0	821.2	52.6	441.2	32.1	6,657.6	8,551.7	1,882.4	10,434.1	649.1	11,083.2

*The comparative Statement of Changes in Equity has been restated. See note 3.1.

Consolidated Cash Flow Statement

for the year ended 31 March 2024

	Note	2024 £m	2023 £m
Operating profit/(loss) - continuing operations	6	2,608.2	(146.3)
Less share of profit of joint ventures and associates		(114.1)	(662.3)
Operating profit/(loss) before jointly controlled entities and associates		2,494.1	(808.6)
Pension service charges less contributions paid		(9.5)	(19.2)
Movement on operating derivatives		(443.4)	2,691.6
Depreciation, amortisation, write downs and impairments		859.0	640.7
Impairment of joint venture investment including shareholder loans		136.8	329.3
Charge in respect of employee share awards (before tax)		20.2	18.7
Profit on disposal of assets and businesses	12	(9.0)	(89.1)
Charge/(release) of provisions		14.6	(114.9)
Credit in respect of financial guarantees		(12.5)	-
Release of deferred income		(13.0)	(13.9)
Cash generated from operations before working capital movements		3,037.3	2,634.6
Decrease/(increase) in inventories		39.6	(137.3)
Decrease/(increase) in receivables		763.1	(996.0)
Increase in payables		243.0	166.7
Decrease in provisions		(33.9)	(15.3)
Cash generated from operations		4,049.1	1,652.7
Dividends received from investments		223.7	296.5
Interest paid		(67.0)	(199.9)
Taxes paid		(345.8)	(255.3)
Net cash from operating activities		3,860.0	1,494.0

Purchase of property, plant and equipment	6	(1,970.3)	(1,479.7)
Purchase of other intangible assets	6	(542.2)	(336.4)
Receipt of government grant income	6	93.4	-
Deferred income received		17.4	13.9
Proceeds from disposals	12	14.9	60.0
Purchase of businesses, joint ventures and subsidiaries		(42.9)	(642.7)
Loans and equity provided to joint ventures and associates		(443.6)	(621.8)
Loans and equity repaid by joint ventures		14.6	61.4
Decrease/(increase) in other investments		0.4	(19.1)
Net cash from investing activities		(2,858.3)	(2,964.4)

Proceeds from issue of share capital	14	9.2	18.0
Dividends paid to company's equity holders	10	(917.8)	(474.3)
Share buy backs		-	(107.6)
Proceeds from divestments		-	1,448.1
Hybrid equity dividend payments	14	(73.1)	(38.8)
Employee share awards share purchase	14	(21.8)	(23.4)
Issue of hybrid instruments	14	-	831.4
New borrowings		1,982.2	1,914.7
Repayment of borrowings		(1,842.7)	(2,242.5)
Settlement of cashflow hedges		6.4	(12.7)
Net cash from financing activities		(857.6)	1,312.9

Net increase/(decrease) in cash and cash equivalents		144.1	(157.5)

Cash and cash equivalents at the start of year		891.8	1,049.3
Net increase/(decrease) in cash and cash equivalents		144.1	(157.5)
Cash and cash equivalents at the end of year		1,035.9	891.8

The accompanying notes are an integral part of the financial information in this announcement.

Notes to the Summary FInancial Statements

for the year ended 31 March 2024

1. Financial Information

The financial information set out in this announcement does not constitute the Group's consolidated financial statement for the years ended 31 March 2024 or 2023 but is derived from those accounts. Consolidated financial statements for the year ended 31 March 2023 were delivered to the Registrar of Companies, and those for the year ended 31 March 2024 will be delivered in due course. The auditors have reported on those accounts and their reports were (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. This preliminary announcement was authorised by the Board on 21 May 2024.

2. Basis of preparation and presentation

2.1 Basis of preparation

The financial information set out in this announcement has been extracted from the consolidated financial statements of SSE plc for the year ended 31 March 2024. These consolidated financial statements were prepared under the historical cost convention, excepting certain assets and liabilities stated at fair value and the liabilities of the Group's pension schemes which are measured using the projected unit credit method, in conformity with the requirements of the Companies Act 2006 and in accordance with UK adopted International Accounting Standards. This consolidated financial information has been prepared on the basis of accounting policies consistent with those applied in the consolidated financial statements for the year ended 31 March 2024 unless expressly stated otherwise.

The Directors consider that the Group has adequate resources to continue in operational existence for the period to 31 December 2025. The consolidated financial statements are therefore prepared on a going concern basis with the basis for that conclusion explained in the consolidated financial statements at note A6.3.

The Summary Financial Statements are presented in Pounds Sterling.

2.2 Basis of presentation

The Group applies the use of adjusted accounting measures or alternative performance measures ("APMs") throughout these statements. These measures enable the Directors to present the underlying performance of the Group and its segments to the users of the statements in a consistent and meaningful manner. The adjustments applied and certain terms such as 'adjusted operating profit', 'adjusted earnings per share', 'adjusted investment and capital expenditure', 'adjusted EBITDA', 'adjusted investment, capital and acquisition expenditure' and 'adjusted net debt and hybrid capital' are not defined under IFRS and are explained in more detail in note 4.

2.3 Changes to presentation and prior year adjustments

The prior year comparatives at 31 March 2023 have been restated following the adoption of IFRS 17 'Insurance Contracts' ("IFRS 17") and the amendment to IAS 12 'Deferred Tax relating to Assets and Liabilities arising from a Single Transaction' ("IAS 12").

2.3.1 Segments

In accordance with the requirements of IFRS 8 'Operating Segments' the Group has aligned its segmental disclosures with its revised internal reporting following changes to the Group's structure and operations. These segments are used internally by the Group Executive Committee in order to assess operating performance and to make decisions on how to allocate capital. Consequently, the segmental results reported in the Group's operating segments have been restated with effect from 1 April 2022. During the year to 31 March 2024, SSE Renewables assumed responsibility for the development, delivery and operation of battery storage and solar assets in Great Britain from SSE Enterprise (formerly Distributed Energy), aligning that activity with its international operations. In addition, the Building Energy Management Systems ('BEMS') activity has been assumed by SSE Business Energy. Accordingly, the result from the Group's battery and solar business and BEMS will now be reported within SSE Renewables and Energy Customers Solutions respectively. Comparative segmental information in note 6 has been re-presented to reflect the change to these segments. The impacts of the restatements are a decrease to the adjusted operating profit of SSE Renewables (2023: £18.2m), a decrease to the adjusted operating profit of SSE Business Energy (2023: £2.2m) and a decrease to the adjusted operating loss of SSE Enterprise (2023: £20.4m). Additionally, adjusted capital expenditure has been re-presented with an increase to SSE Renewables (2023: £74.0m), an increase to SSE Business Energy (2023: £0.4m) and a decrease to SSE Enterprise (2023: £74.4m). Revenue has been re-presented with an increase to SSE Business Energy (2023: £46.0m) and a decrease to SSE Enterprise (2023: £46.0m). Finally, note that there were two changes to the names of segments in the year: 1) Distributed Energy was renamed SSE Enterprise and 2) EPMI was renamed SSE Energy Markets.

2.3.2 Derivative financial liabilities prior year adjustment

A prior year adjustment has been made to reflect the restatement of derivative financial liabilities as a result of an incorrect classification split in the prior year. The adjustment has been to present non-current derivative financial liabilities as £243.3m (previously £1,021.0m) and current derivative financial liabilities as £1,021.0m (previously £243.3m). This adjustment has no impact on retained earnings, net assets or adjusted performance measures of the Group, at any reporting date.

2. Basis of preparation and presentation (CONTINUED)

2.3.3 Investments presentation change

In the current year the classification of an investment of £24.1m has been reassessed and reclassified from 'Other investments' to 'Equity investments in joint ventures and associates'. The investment has been recognised as an associate reflecting the Group's level of ownership and influence over the investee; comparative amounts have not been re-presented.

2.4 Changes to estimates

On 31 March 2024, the Group's Thermal business unit reviewed the useful economic life of the Peterhead, Keadby and Medway CCGT assets and extended their useful lives to 2030 following the award of capacity mechanism contracts. The change in useful economic life had no impact on the depreciation charge for the year ended 31 March 2024, but will reduce the depreciation charge for the year ending 31 March 2025 by £16.4m.

3. New accounting policies and reporting changes

The basis of consolidation and principal accounting policies applied in the preparation of these Summary Financial Statements are set out below and included within A1 Accompanying Information to the Group's consolidated Financial Statements.

3.1 New standards, amendments and interpretations effective or adopted by the Group

On 1 April 2023, the Group adopted IFRS 17 and the amendments to IAS 12 on a modified retrospective basis from the earliest period presented in these financial statements.

During the current year to 31 March 2024, the Group recognised a net decrease in financial guarantee liabilities of £31.4m, a reduction in the value of its joint venture investments of £6.9m and a settlement of £12.0m resulting in a net income statement credit of £12.5m, of which £5.1m has been treated as exceptional. During the six month period to 30 September 2023, the Group recognised an exceptional expense of £50.5m in relation to guarantees provided to its former subsidiary Enerveo Limited. During the second half of the financial year the Group completed the reacquisition of Enerveo and reversed the entries arising from the adoption of IFRS 17 that eliminate on consolidation (see note 7 for further details).

The Group has identified that IFRS 17 impacts the results of its captive insurance subsidiary as it issues insurance contracts, however only the subsidiary's reinsurance contracts do not eliminate on consolidation. The accounting for these contracts under IFRS 17 is immaterial to the Group's consolidated financial statements.

The adoption of the amendments to IAS 12 resulted in an increase of £50.1m (2023: £45.5m) to the Group's gross deferred tax assets and gross deferred tax liabilities recognised in relation to the Group's decommissioning obligations and a reclassification of £79.5m of gross deferred tax assets. Adoption had no impact on retained earnings or profits recognised in presented periods.

In the year, the Group also adopted the amendments to:

• IAS 1 'Presentation of Financial Statements' and IFRS Practice Statement 2 'Making Materiality Judgements' in relation to disclosure of accounting policies;

• IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' in relation to the definition of accounting estimates; and

• Pillar Two Model Rules (Amendments to IAS 12) as issued on 23 May 2023, was substantively enacted in the UK from 20 June 2023. The amendments to IAS 12 introduce a temporary mandatory relief from accounting for deferred tax that arises from legislation implementing OECD Pillar Two. SSE has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.

Adoption of these other amendments had no material impact on these Financial Statements. There were no other standards, amendments to standards or interpretations relevant to the Group's operations which were adopted during the year.

3.2 New standards, amendments and interpretations issued, but not yet adopted by the Group

On 9 April 2024, subsequent to the balance sheet date, the IASB issued IFRS 18 'Presentation and Disclosure in Financial Statements'. The Group will assess the expected impact of the adoption of the standard during the forthcoming year. A number of other standards, amendments and interpretations have been issued but not yet adopted by the Group within these financial statements, because application is not yet mandatory or because UK adoption remains outstanding at the date the financial statements were authorised for issue. These amendments are not anticipated to have a material impact on the Group's consolidated financial statements.

4. Adjusted accounting measures

The Group applies the use of adjusted accounting measures or alternative performance measures ('APMs') throughout the Annual Report and Financial Statements. These measures enable the Directors to present the underlying performance of the Group and its segments to the users of the statements in a consistent and meaningful manner. The adjustments applied and certain terms such as 'adjusted operating profit', 'adjusted earnings per share', 'adjusted EBITDA', 'adjusted investment and capital expenditure', 'adjusted investment, capital and acquisition expenditure' and 'adjusted net debt and hybrid capital' that are not defined under IFRS and are explained in more detail below. In addition, the section 'Alternative Performance Measures' at page 55 provides further context and explanation of these terms.

4.1 Adjusted measures

The Directors assess the performance of the Group and its reportable segments based on 'adjusted measures'. These measures are used for internal performance management and are believed to be appropriate for explaining underlying performance to users of the accounts. These measures are also deemed to be the most useful for ordinary shareholders of the Company and for other stakeholders.

The performance of the reportable segments is reported based on adjusted profit before interest and tax ('adjusted operating profit'). This is reconciled to reported profit before interest and tax by adding back exceptional items and certain re-measurements (see note 4.2 below), depreciation and amortisation expense on fair value uplifts, the share of operating profit attributable to non-controlling interests, adjustments to the retained Gas Production decommissioning provision and after the removal of interest and taxation on profits from equity-accounted joint ventures and associates.

The performance of the Group is reported based on adjusted profit before tax which excludes exceptional items and certain re-measurements (see note 4.2 below), depreciation and amortisation expense on fair value uplifts, the share of profit before tax attributable to non-controlling interests, the net interest costs associated with defined benefit schemes, adjustments to the retained Gas Production decommissioning provision and taxation on profits from equity-accounted joint ventures and associates. The interest charges or credits on defined benefit schemes removed are non-cash and are subject to variation based on actuarial valuations of scheme liabilities.

The Group also uses adjusted earnings before interest, taxation, depreciation and amortisation ('adjusted EBITDA') as an alternative operating performance measure which acts as a management proxy for cash generated from operating activities. This does not take into account the rights and obligations that SSE has in relation to its equity-accounted joint ventures and associates. This measure excludes exceptional items and certain re-measurements (see note 4.2 below), the depreciation charged on fair value uplifts, the share of EBITDA attributable to non-controlling interests, adjustments to the retained Gas Production decommissioning provision, the net interest costs associated with defined benefit schemes, depreciation and amortisation from equity-accounted joint ventures and associates and interest and taxation on profits from equity-accounted joint ventures and associates. For the purpose of calculating the 'Net Debt to EBITDA' metric, 'adjusted EBITDA' is further adjusted to remove the proportion of adjusted EBITDA from equity-accounted joint ventures relating to off-balance sheet debt (see note 6.3.)

The Group's key performance measure is adjusted earnings per share (EPS), which is based on basic earnings per share before exceptional items and certain re-measurements (see note 4.2 below), depreciation and amortisation on fair value uplifts, adjustments to the retained Gas Production decommissioning provision, the net interest costs/income associated with defined benefit schemes and after the removal of deferred taxation and other taxation items. Deferred taxation is excluded from the Group's adjusted EPS because of the Group's significant ongoing capital investment programme, which means that the deferred tax is unlikely to reverse. Adjusted profit after tax is presented on a basis consistent with adjusted EPS except for the non-inclusion of payments to holders of hybrid equity.

The Summary Financial Statements also include an 'adjusted net debt and hybrid capital' measure. This presents financing information on the basis used for internal liquidity risk management. This measure excludes obligations due under lease arrangements and the share of net debt attributable to non-controlling interests, and includes cash held and posted as collateral on commodity trading exchanges, and other short term loans. The measure represents the capital owed to investors, lenders and equity holders other than the ordinary shareholders. As with 'adjusted earnings per share', this measure is considered to be of relevance to the ordinary shareholders of the Group as well as other stakeholders and interested parties.

Finally, the financial statements include an 'adjusted investment and capital expenditure' and an 'adjusted investment, capital and acquisition expenditure' measure. These metrics represent the capital invested by the Group in projects that are anticipated to provide a return on investment over future years or which otherwise support Group operations and are consistent with internally applied metrics. They therefore include capital additions to property, plant and equipment and intangible assets and also the Group's direct funding of joint venture and associates capital projects. The Group has considered it appropriate to report these values both internally and externally in this manner due to its use of equity-accounted investment vehicles to grow the Group's asset base and to highlight where the Group is providing funding to the vehicle through either loans or equity. The Group does not include project funded capital additions in these metrics, nor does it include other capital invested in joint ventures and associates. Where initial capital funding of an equity accounted joint venture is refunded, these refunds are deducted from the metrics in the year the refund is received. In addition, the Group excludes from this metric additions to its property, plant and equipment funded by Customer Contributions and additions to intangible assets associated with Allowances and Certificates. The Group also excludes the share of investment and capital expenditure attributable to non-controlling interests in controlled but not wholly owned subsidiaries, disposed or impaired additions and refinancing proceeds and refunds.

4. adjusted accounting measures (CONTINUED)

4.1 Adjusted measures (continued)

The 'adjusted investment, capital and acquisition expenditure' measure also includes cash consideration paid by the Group in business combinations which contribute to growth of the Group's capital asset base and is considered to be relevant metric in context of the Group's Net Zero Acceleration Programme Plus. As with 'adjusted earnings per share', these measures are considered to be of relevance to management and to the ordinary shareholders of the Group as well as to other stakeholders and interested parties.

Reconciliations from reported measures to adjusted measures along with further description of the rationale for those adjustments are included in the "Adjusted Performance Measures" section at pages 55 to 62 before the Summary Financial Statements.

4.2 Exceptional items and certain re-measurements

Exceptional items are those charges or credits that are considered unusual by nature and/or scale and of such significance that separate disclosure is required for the financial statements to be properly understood. The trigger points for recognition of items as exceptional items will tend to be non-recurring although exceptional charges (or credits) may impact the same asset class or segment over time.

Examples of items that may be considered exceptional include material asset, investment or business impairment charges; reversals of historic exceptional impairments; certain business restructuring and reorganisation costs; significant realised gains or losses on disposal; unrealised fair value adjustments on acquisition or disposals; and provisions in relation to significant disputes and claims.

The Group operates a policy framework for establishing whether items should be considered to be exceptional. This framework, which is reviewed annually, is based on the materiality of the item, by reference to the Group's key performance measure of adjusted earnings per share. This framework estimates that any qualifying item greater than £40.0m (2023: £40.0m) will be considered exceptional, with a potentially lower threshold applied to strategic restructuring of activities or discontinued operations, which will respectively be considered on a case by case basis or will always be treated as exceptional. The only exception to this threshold is for gains or losses on disposal, or divestment of early-stage SSE Renewables international or offshore wind farm development projects within SSE Renewables, which are considered non-exceptional in line with the Group's strategy to generate recurring gains from developer divestments. Where a gain arises on a non-cash transaction, the gain is treated as exceptional.

Certain re-measurements are re-measurements arising on certain commodity, interest rate and currency contracts which are accounted for as held for trading or as fair value hedges in accordance with the Group's policy for such financial instruments; or remeasurements on stocks of commodities held at the balance sheet date; or movements in fair valuation of contracts for difference not designated as government grants. The amount recorded in the adjusted results for these contacts is the amount settled in the year as disclosed in note 16.

This excludes commodity contracts not treated as financial instruments under IFRS 9 where the contracts are held for the Group's own use requirements; the fair value of these contracts is not recorded and the value associated with the contract is not recognised until the underlying commodity is delivered.

The impact of changes in Corporation Tax rates on deferred tax balances are also included within certain remeasurements.

4.3 Other additional disclosures

As permitted by IAS 1 'Presentation of financial statements', the Group's income statement discloses additional information in respect of joint ventures and associates, exceptional items and certain re-measurements to aid understanding of the Group's financial performance and to present results clearly and consistently.

5. Accounting judgements and estimation uncertainty

In the process of applying the Group's accounting policies, management is necessarily required to make judgements and estimates that will have a significant effect on the amounts recognised in the financial statements. Changes in the assumptions underlying the estimates could result in a significant impact to the financial statements. The Group's key accounting judgement and estimation areas are noted below, with the most significant financial judgement areas as specifically considered by the Audit Committee highlighted separately.

The Group has made no changes to its significant financial judgement areas during the year. In the year ended 31 March 2024 the Group completed the implementation and migration of customers to a new billing system within the Group's SSE Business Energy segment. The migration of customers late in the financial year has resulted in the level of judgement applied in the SSE Business Energy revenue accrual increasing year on year (see 5.1 (iii) below).

5. Accounting judgements and estimation uncertainty (continued)

5.1 Significant financial judgements and estimation uncertainties

The preparation of the Group's Summary Financial Statements has specifically considered the following significant financial judgements, some of which are also areas of estimation uncertainty as noted below.

(i) Impairment testing and valuation of certain non-current assets - financial judgement and estimation uncertainty

The Group reviews the carrying amounts of its goodwill, other intangible assets, specific property, plant and equipment and investment assets to determine whether any impairments or reversal of impairments to the carrying value of those assets requires to be recorded. Where an indicator of impairment or impairment reversal exists, the recoverable amount of those assets is determined by reference to value in use calculations or fair value less cost to sell assessments, if more appropriate. As well as its goodwill balances, the specific assets under review in the year ended 31 March 2024 are intangible development assets and specific property, plant and equipment assets related to gas storage and thermal power generation. In addition, the Group performed an impairment review over the carrying value of its equity investments in Neos Networks Limited and Triton Power Holdings Limited.

In conducting its reviews, the Group makes judgements and estimates in considering both the level of cash generating unit (CGU) at which common assets such as goodwill are assessed against, as well as the estimates and assumptions behind the calculation of recoverable amount of the respective assets or CGUs.

Changes to the estimates and assumptions on factors such as regulation and legislation changes (including the Electricity Generator Levy and climate change related regulation), power, gas, carbon and other commodity prices, volatility of gas prices, plant running regimes and load factors, discount rates and other inputs could impact the assessed recoverable value of assets and CGUs and consequently impact the Group's income statement and balance sheet.

(ii) Retirement benefit obligations - estimation uncertainty

The assumptions in relation to the cost of providing post-retirement benefits during the year are based on the Group's best estimates and are set after consultation with qualified actuaries. While these assumptions are believed to be appropriate, a change in these assumptions would impact the level of the retirement benefit obligation recorded and the cost to the Group of administering the schemes.

Further detail of the calculation basis and key assumptions used, the resulting movements in obligations and the sensitivity of key assumptions to the obligation at note 23 in the Group's consolidated financial statements.

(iii) Revenue recognition - Customers unbilled supply of energy - estimation uncertainty

Revenue from energy supply activities undertaken by the SSE Business Energy and SSE Airtricity businesses includes an estimate of the value of electricity or gas supplied to customers between the date of the last meter reading and the year end. This estimation comprises both billed revenue and unbilled revenue and is calculated based on applying the tariffs and contract rates applicable to customers against aggregated estimated customer consumption, taking account of various factors including tariffs, consumption patterns, customer mix, metering data, operational issues relating to the billings process and externally notified aggregated volumes supplied to customers from national settlements bodies. During the year, the Group's SSE Business Energy segment completed the implementation of a new billing system which included the migration of customer accounts and balances. Due to the timing of the data migration, which occurred in the second half of the financial year for the majority of customers, the level of unbilled sales and hence the level of judgement applied in determining the sales accrual for these customers is higher than in previous years. The Group has recognised a provision against this accrual to reflect that customer billing delays may result in poorer collection performance.

In recent years the impact of government-backed customer support schemes has been material to the judgement applied. However, in the current year the level of judgement required is significantly less material.

This unbilled estimation is subject to an internal corroboration process which compares calculated unbilled volumes to a theoretical 'perfect billing' benchmark measure of unbilled volumes (in GWh and millions of therms) derived from historical consumption patterns and aggregated metering data used in industry reconciliation processes. Furthermore, unbilled revenue is compared to billings in the period between the balance sheet date and the finalisation of the financial statements which has provided evidence of a catch-up of post implementation billings and hence support to the accrual recognised.

Given the requirement of management to apply judgement particularly in the current year in relation to the impact of the data and process migration referred to above, unbilled revenue is considered a significant estimate made by management in preparing the financial statements. A change in the assumptions underpinning the unbilled calculation would have an impact on the amount of revenue recognised in any given period.

(iv) Valuation of other receivables - financial judgement and estimation uncertainty

The Group holds a £100m loan note due from Ovo Energy Limited following the disposal of SSE Energy Services on 15 January 2020. The loan is repayable in full by 31 December 2029, carries interest at 13.25% and is presented cumulative of accrued interest payments, discounted at 13.25%. At 31 March 2024, the carrying value (net of expected credit loss provision of £1.6m (2023: £1.5m)) is £170.1m (2023: £149.5m).

5. ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY (CONTINUED)

5.1 Significant financial judgements and estimation uncertainties (continued)

(iv) Valuation of other receivables - financial judgement and estimation uncertainty (continued)

The Group has assessed recoverability of the loan note receivable and has recognised a provision for expected credit loss in accordance with the requirements of IFRS 9. The Group's assessment of the recoverability of the loan note is considered a significant financial judgement. The Group has taken appropriate steps to assess all available information in respect of the recoverability of the loan note. Procedures included reviewing recent financial information of Ovo Energy Limited, including the 31 December 2022 statutory financial statements; and discussions with Ovo management. While the carrying value is considered to be appropriate, changes in economic conditions could lead to a change in the expected credit loss incurred by the Group in future periods.

(v) Impact of climate change and the transition to net zero - financial judgement and estimation uncertainty

Climate change and the transition to net zero have been considered in the preparation of these Summary Financial Statements. Where relevant, assumptions have been applied that are consistent to a Paris-aligned 1.5^OC 2050 net zero pathway. The Group has a clearly articulated Net Zero Acceleration Programme Plus ('NZAP Plus') to lead in the UK's transition to net zero and aligns its investment plans and business activities to that strategy. These plans are supported by the Group's Green Bond framework under which the Group's sixth and seventh green bonds were issued during the year. The proceeds of these green bonds were allocated to fund Renewable wind farm and Transmission network projects.

The impact of future climate change regulation could have a material impact on the currently reported amounts of the Group's assets and liabilities. In preparing these Summary Financial Statements, the following climate change related risks have been considered:

Valuation of property, plant and equipment, and impairment assessment of goodwill

In the medium term, the transition to net zero may result in regulation restricting electricity generation from unabated gas fired power stations. The Group's view is that flexible generation capacity, such as the Group's fleet of CCGT power stations, will be an essential part of the net zero transition in order to provide security of supply to a market increasingly dependent upon renewable sources, which are inherently intermittent. The majority of the Group's GB CCGT fleet is nearing the end of its economic life and it is not currently expected that regulation to require abatement would be introduced before the planned closure of most of those power stations. Of the net book value held at 31 March 2024, only four assets are forecast to continue to operate beyond 2030 being: Great Island; Keadby 2; Marchwood (which is operated by SSE under a lease); and Saltend Power Station within the Triton joint venture. The Group has assessed that the useful economic lives of Peterhead, Keadby and Medway power stations now extend to March 2030, and these changes in end of life assumptions have been reflected in the annual impairment process. The Group's view is that Great Island will continue to be essential to providing security of supply in the Irish electricity market. Keadby 2 commenced commercial operation on 15 March 2023 and has an efficiency of around 63% making it the most efficient plant of its type in the UK and Europe. Work is also underway to explore how to decarbonise Keadby 2 further with the potential to blend hydrogen into the plant. Marchwood is a 50% equity accounted joint venture and is considered one of the most efficient CCGTs in the UK. Saltend was acquired as part of Triton Power 50% equity accounted joint venture and supports the long-term decarbonisation of the UK's power system, and also contributes to security of supply and grid stability. Initial steps are underway at Saltend, targeting abatement by 2027 through blending up to 30% of low-carbon hydrogen. Therefore, the Group considers that other assets operating in the market would be more likely to close before Keadby 2, Marchwood and Saltend and the plants will continue to be required to balance the UK electricity market beyond 2030. As a result, the useful economic lives of these assets have not been shortened when preparing the 31 March 2024 financial statements. The Group assesses the useful economic life of its property, plant and equipment assets annually.

A significant increase in renewable generation capacity in the Group's core markets in the UK and Ireland could potentially result in an oversupply of renewable electricity at a point in the future, which would lead to a consequential decrease in the power price achievable for the Group's wind generation assets. The Group has not assessed that this constitutes an indicator of impairment at 31 March 2024 as the Group's baseline investment case models assume a centrally approved volume of new build in these markets over the life of the existing assets. The Group's policy is to test the goodwill balances associated with its wind generation portfolio for impairment on an annual basis in line with the requirements of IAS 36 'Impairment of Assets'. Through this impairment assessment, a sensitivity to power price, which may arise in a market with significant new build, was modelled. This scenario indicated that, despite a modelled 10% reduction in power price, there remained significant headroom on the carrying value in the Group's generating wind assets.

Changes to weather patterns resulting from global warming have also been considered as a potential risk to future returns from the Group's wind and hydro assets. Changes to weather patterns could result in calmer, drier weather patterns, which would reduce volumes achievable for the Group's wind and hydro generation assets (although noting that this would likely lead to capacity constraints and hence higher prices). This has not been assessed as an indicator of impairment for operating assets in the UK and Ireland at 31 March 2024, as there is no currently observable evidence to support that scenario directly. The Group has performed a sensitivity to its impairment modelling and has assessed that a 15% reduction in achievable volume would result in significant headroom on the carrying value of the UK and Ireland assets at 31 March 2024. The TCFD physical risk scenarios modelled a 4% to 8% change in average mean wind speeds in the longer term across the wind portfolio, consistent with the impairment sensitivity performed.

5. Accounting judgements and estimation uncertainty (continued)

5.1 Significant financial judgements and estimation uncertainties (continued)

(v) Impact of climate change and the transition to net zero - financial judgement and estimation uncertainty (continued)

Valuations of decommissioning provisions

The Group holds decommissioning provisions for its Renewable and Thermal generation assets and has retained a 60% share for the decommissioning of its disposed Gas Production business. As noted above, the Group's view at 31 March 2024 is that climate change regulation will not bring forward the closure dates of its CCGT fleet, many of which are expected to close before 2030. Similarly, it is expected that fundamental changes to weather patterns, or the impact of new wind generation capacity will not bring forward the decommissioning of the Group's wind farm portfolio.

The discounted share of the Gas Production provision is £219.7m (2023: £201.4m). At 31 March 2024, the impact of discounting of this retained provision is £68.3m (2023: £64.5m), which is expected to be incurred across the period to 31 March 2040. If the decommissioning activity was accelerated due to changes in legislation, the costs of unwinding the discounting of the provision would be recognised earlier.

Defined Benefit scheme assets

The Group holds defined benefit pension scheme assets at 31 March 2024 which could be impacted by climate-related risks. The Trustees of the schemes have a long term investment strategy that seeks to reduce investment risk as and when appropriate and takes into consideration the impact of climate-related risk.

Going concern and viability statement

The implications of near term climate-related risks have been considered in the Group's going concern assessment and viability statement assessment.

5.2 Other accounting judgements - changes from prior year

On 31 March 2024, the Group's Thermal business unit reviewed the useful economic life of the Peterhead, Keadby and Medway CCGT assets and extended their useful lives to 2030 following the award of capacity mechanism contracts. The change in useful economic life has been applied prospectively and had no impact on the results for the year ended 31 March 2024. The depreciation charge for the year ending 31 March 2025 will be reduced by £16.4m. There were no other changes to accounting judgements and estimation uncertainties during the year.

5.3 Other areas of estimation uncertainty

(i) Tax provisioning

In the financial statements to 31 March 2024, the Group has no provision for uncertain tax positions included in current tax liabilities (2023: £nil).

The Group applies IFRIC 23 'Uncertainty over Income Tax Treatments' in respect of uncertain tax positions. Where management makes a judgement that an outflow of funds is probable, and a reliable estimate of the dispute can be made, provision is made for the best estimate of the most likely liability.

In estimating any such liability, the Group applies a risk-based approach, taking into account the specific circumstances of each dispute based on management's interpretation of tax law and supported, where appropriate, by discussion and analysis by external tax advisors. These estimates are inherently judgemental and could change substantially over time as disputes progress and new facts emerge. Provisions are reviewed on an ongoing basis, however, the resolution of tax issues can take a considerable period of time to conclude and it is possible that amounts ultimately paid will be different from the amounts provided.

(ii) Decommissioning costs

The calculation of the Group's decommissioning provisions involves the estimation of quantum and timing of cash flows to settle the obligation. The Group engages independent valuation experts to estimate the cost of decommissioning its Renewable, Thermal and Gas Storage assets every three years based on current technology and prices. The last independent assessment for the majority of the Group's Renewable and Thermal generation assets was performed in the year to 31 March 2022. The last formal assessment for Gas Storage assets was performed in the year to 31 March 2023. Retained decommissioning costs in relation to the disposed Gas Production business are periodically agreed with the field operators and reflect the latest expected economic production lives of the fields.

The dates for settlement of future decommissioning costs are uncertain, particularly for the disposed Gas Production business where reassessment of gas and liquids reserves and fluctuations in commodity prices can lengthen or shorten the field life.

Further detail on the assumptions applied, including expected decommissioning dates, and movement in decommissioning costs during the year are disclosed at note 20 in the Group's consolidated financial statements.

(iii) Valuation of SSE Business Energy trade receivables

During the financial year, the Group's SSE Business Energy segment completed the implementation of a new billing system which included the migration of customer accounts and balances. The migration has resulted in delays to billings (as noted in note 5.1(iii) above) and delays to collection activities, meaning that aged debt balances and provisions recognised against these balances are higher than would normally be expected. The Group's processes for recognising bad debt provisions are based on historic collection performance adjusted for expected future improvement or decline against this performance. In the current year, an estimate of expected deterioration in debt collection due to billing and collection delays has been included within the recognised provision.

6. Segmental information

The changes to the Group's segments in the year are explained in note 2 and includes the realignment of the activities of the Distributed Energy (now SSE Enterprise) business. Comparative information has been re-presented to reflect the change to these segments. The Group's "Corporate unallocated" segment contains the Group's corporate central costs which are not allocated to individual segments and includes the contribution from the Group's joint venture investment in Neos Networks Limited. Any impact of the acquisition of Enerveo Limited on 22 March 2024 has been recognised within "Corporate unallocated".

The types of products and services from which each reportable segment derives its revenues are:

Business Area	Reported Segments	Description
Continuing operations
Transmission	SSEN Transmission	The economically regulated high voltage transmission of electricity from generating plant to the distribution network in the North of Scotland. Revenue earned from constructing, maintaining and renovating our transmission network is determined in accordance with the regulatory licence, based on an Ofgem approved revenue model and is recognised as charged to National Grid. The revenue earned from other transmission services such as generator plant connections is recognised in line with delivery of that service over the expected contractual period and at the contracted rate. On 25 November 2022 the Group sold a 25.0% non-controlling interest in this business to the Ontario Teachers' Pension Plan.
Distribution	SSEN Distribution	The economically regulated lower voltage distribution of electricity to customer premises in the North of Scotland and the South of England. Revenue earned from delivery of electricity supply to customers is recognised based on the volume of electricity distributed to those customers and the set customer tariff. The revenue earned from other distribution services such as domestic customer connections is recognised in line with delivery of that service over the expected contractual period and at the contracted rate.
Renewables	SSE Renewables	The generation of electricity from renewable sources, such as onshore and offshore windfarms and run of river and pumped storage hydro assets in the UK and Ireland and the development of similar wind assets in Japan and Southern Europe and the development of wind, solar and battery opportunities. Revenue from physical generation of electricity in Great Britain is sold to SSE Energy Markets and in Ireland is sold to SSE Airtricity and is recognised as generated, based on the contracted or spot price at the time of delivery. Revenue from national support schemes (such as Renewable Obligation Certificates or the Capacity Market in Great Britain or REFIT in Ireland) may either be recognised in line with electricity being physically generated or over the contractual period, depending on the underlying performance obligation. During the year ended 31 March 2024, Renewables has taken responsibility for the development, delivery and operation for battery storage and solar assets in Great Britain from SSE Enterprise, aligning that activity with its international operations.
Thermal	SSE Thermal	The generation of electricity from thermal plants including CCGTs and the Group's interests in multifuel assets in the UK and Ireland. Revenue from physical generation of electricity in Great Britain and Ireland is sold to SSE Energy Markets and is recognised as generated, based on the contract or spot price at the time of delivery. Revenue from national support schemes (such as the Capacity Market) and ancillary generation services may either be recognised in line with electricity being physically generated or over the contractual period, depending on the underlying performance obligation.
Thermal	Gas Storage	The operation of gas storage facilities in Great Britain, utilising capacity to optimise trading opportunity associated with the assets. Contribution arising from trading activities is recognised as realised based on the executed trades or withdrawal of gas from caverns.
Energy Customer Solutions	SSE Business Energy	The supply of electricity and gas to business customers in Great Britain and smart buildings (BEMS) activity. Revenue earned from the supply of energy is recognised in line with the volume delivered to the customer, based on actual and estimated volumes, and reflecting the applicable customer tariff after deductions or discounts.
Energy Customer Solutions	SSE Airtricity	The supply of electricity, gas and energy related services to residential and business customers in the Republic of Ireland and Northern Ireland. Revenue earned from the supply of energy is recognised in line with the volume delivered to the customer, based on actual and estimated volumes, and reflecting the applicable customer tariff after deductions or discounts. Revenue earned from energy related services may either be recognised over the expected contractual period or following performance of the service, depending on the underlying performance obligation.

6. Segmental information (continued)

Business Area	Reported Segments	Description
SSE Enterprise	SSE Enterprise	The provision of low carbon energy solutions to customers; behind-the-meter solar and battery solutions, EV charging activities, private electric networks and heat and cooling networks. As noted above, during the year, the front of the meter battery storage and solar asset activity in Great Britain was transferred to SSE Renewables and smart buildings (BEMS) activity was transferred to SSE Business Energy.
SSE Energy Markets	SSE Energy Markets	The provision of a route to market for the Group's Renewable and Thermal generation businesses and commodity procurement for the Group's energy supply businesses in line with the Group's stated hedging policies. Revenue from physical sales of electricity, gas and other commodities produced by SSE is recognised as supplied to either the national settlements body or the customer, based on either the spot price at the time of delivery or trade price where that trade is eligible for "own use" designation. The sale of commodity optimisation trades is presented net in cost of sales alongside purchase commodity optimisation trades.

The internal measure of profit used by the Board is 'adjusted profit before interest and tax' or 'adjusted operating profit' which is arrived at before exceptional items, the impact of financial instruments measured under IFRS 9, share of profits attributable to non-controlling interests, the net interest costs/income associated with defined benefit pension schemes, adjustments to the retained Gas Production decommissioning, the impact of depreciation on fair value uplifts and after the removal of taxation and interest on profits from joint ventures and associates.

Analysis of revenue, operating profit, capital expenditure and earnings before interest, taxation, depreciation and amortisation ('EBITDA') by segment is provided on the following pages. All revenue and profit before taxation arise from operations within the UK and Ireland.

6. Segmental information (continued)

6.1 Revenue by segment

	Reported revenue	Inter-segment revenue (i)	Segment revenue	Reported revenue	Inter- segment revenue (i)	Segment revenue
	2024 £m	2024 £m	2024 £m	2023 (restated*) £m	2023 £m	2023 (restated*) £m
Continuing operations

SSEN Transmission	885.2	-	885.2	656.1	-	656.1
SSEN Distribution	1,004.0	45.9	1,049.9	1,102.7	81.0	1,183.7

SSE Renewables	335.5	876.3	1,211.8	334.8	602.7	937.5

SSE Thermal	571.0	3,123.9	3,694.9	740.4	3,863.8	4,604.2
Gas storage	11.2	2,948.4	2,959.6	12.2	5,147.5	5,159.7

Energy Customer Solutions
SSE Business Energy	3,183.2	48.5	3,231.7	3,359.5	59.4	3,418.9
SSE Airtricity	2,021.2	170.0	2,191.2	1,776.9	233.1	2,010.0

SSE Enterprise	91.9	23.6	115.5	93.1	20.1	113.2
SSE Energy Markets:
Gross trading	15,074.3	7,951.4	23,025.7	24,700.6	11,972.4	36,673.0
Optimisation trades	(12,785.1)	(2,674.2)	(15,459.3)	(20,351.8)	(937.3)	(21,289.1)
SSE Energy Markets	2,289.2	5,277.2	7,566.4	4,348.8	11,035.1	15,383.9
Corporate unallocated	64.8	250.9	315.7	66.2	232.1	298.3
Total SSE Group	10,457.2	12,764.7	23,221.9	12,490.7	21,274.8	33,765.5

*The comparative segment revenue has been restated. See note 2.3.1.

(i) Significant inter-segment revenue is derived from the sale of power and stored gas from SSE Renewables, SSE Thermal, Gas Storage and SSE Enterprise to SSE Energy Markets; use of system income received by SSEN Distribution from SSE Business Energy; SSE Business Energy provides internal heat and light power supplies to other Group companies; SSE Energy Markets provides power, gas and other commodities to SSE Business Energy and SSE Airtricity; and Corporate unallocated (SSE Services and related parties) provides corporate and infrastructure services to all segments as well as third parties. All are provided at arm's length.

Revenue by geographical location on continuing operations is as follows:

	2024	2023
	£m	£m
UK	8,797.6	10,899.8
Ireland	1,659.6	1,590.9
	10,457.2	12,490.7

6. Segmental information (continued)

6.2 Operating profit/(loss) by segment

		2024
	Adjusted operating profit reported to the Board		Depreciation on fair value uplifts	Joint venture/ Associate share of interest and tax	Adjustments to Gas Production decommissioning provision	Non-controlling interests	Before exceptional items and certain re-measurements	Exceptional items and certain re-measurements	Total
	£m		£m	£m	£m	£m	£m	£m	£m
Continuing operations

SSEN Transmission	419.3		-	-	-	139.8	559.1	-	559.1
SSEN Distribution	272.1		-	-	-	-	272.1	-	272.1
SSE Renewables	833.1		(19.0)	(145.7)	-	(0.7)	667.7	(37.4)	630.3
SSE Thermal	736.1		-	(13.1)	-	-	723.0	(78.6)	644.4
Gas Storage	82.8		-	-	-	-	82.8	(125.0)	(42.2)
Energy Customer Solutions
SSE Business Energy	95.8		-	-	-	-	95.8	-	95.8
SSE Airtricity	95.0		-	(0.5)	-	-	94.5	-	94.5
SSE Enterprise	(25.6)		-	-	-	-	(25.6)	-	(25.6)
SSE Energy Markets	38.9		-	-	-	-	38.9	551.1	590.0
Corporate
Corporate unallocated	(88.8)		-	-	(9.9)	-	(98.7)	4.6	(94.1)
Neos Networks	(32.3)		-	(10.2)	-	-	(42.5)	(73.6)	(116.1)
Total SSE Group	2,426.4		(19.0)	(169.5)	(9.9)	139.1	2,367.1	241.1	2,608.2

6. Segmental information (continued)

6.2 Operating profit/(loss) by segment (continued)

		2023 (restated*)
	Adjusted operating profit reported to the Board		Depreciation on fair value uplifts	Joint venture/ Associate share of interest and tax	Adjustments to Gas Production decommissioning provision	Non-controlling interests	Before exceptional items and certain re-measurements	Exceptional items and certain re-measurements	Total
	£m		£m	£m	£m	£m	£m	£m	£m
Continuing operations

SSEN Transmission	372.7		-	-	-	32.8	405.5	-	405.5
SSEN Distribution	382.4		-	-	-	-	382.4	-	382.4
SSE Renewables	561.8		(18.8)	(103.0)	-	(1.9)	438.1	(10.0)	428.1
SSE Thermal	1,031.9		(10.0)	(60.4)	-	-	961.5	128.0	1,089.5
Gas Storage	212.5		-	-	-	-	212.5	36.7	249.2
Energy Customer Solutions
SSE Business Energy	15.7		-	-	-	-	15.7	-	15.7
SSE Airtricity	5.6		-	(0.4)	-	-	5.2	-	5.2
SSE Enterprise	(7.0)		-	-	-	-	(7.0)	(6.1)	(13.1)
SSE Energy Markets	80.4		-	-	-	-	80.4	(2,706.4)	(2,626.0)
Corporate
Corporate unallocated	(87.0)		-	-	50.5	-	(36.5)	9.7	(26.8)
Neos Networks	(39.8)		-	(10.3)	-	-	(50.1)	(5.9)	(56.0)
Total SSE Group	2,529.2		(28.8)	(174.1)	50.5	30.9	2,407.7	(2,554.0)	(146.3)

*The comparative operating profit by segment information has been restated. See note 2.3.1.

6. Segmental information (continued)

6.3 Earnings before interest, taxation, depreciation and amortisation ('EBITDA')

		2024
	Adjusted operating profit reported to the Board (note 6.2)		Depreciation on fair value uplifts	Depreciation/ impairment/ amortisation before exceptional charges	Joint Venture / Associate share of depreciation and amortisation	Release of deferred income	Share of non-controlling interest depreciation and amortisation	Adjusted EBITDA
	£m		£m	£m	£m	£m	£m	£m
Continuing operations
SSEN Transmission	419.3		-	130.1	-	(2.0)	(32.5)	514.9
SSEN Distribution	272.1		-	194.8	-	(9.9)	-	457.0
SSE Renewables	833.1		(19.0)	171.9	121.6	-	-	1,107.6
SSE Thermal	736.1		-	104.0	40.6	-	-	880.7
Gas Storage	82.8		-	12.4	-	-	-	95.2
Energy Customer Solutions
SSE Business Energy	95.8		-	9.1	-	-	-	104.9
SSE Airtricity	95.0		-	5.1	-	-	-	100.1
SSE Enterprise	(25.6)		-	10.2	-	(0.5)	-	(15.9)
SSE Energy Markets	38.9		-	5.1	-	-	-	44.0
Corporate
Corporate unallocated	(88.8)		-	82.2	-	(0.6)	-	(7.2)
Neos Networks	(32.3)		-	-	46.6	-	-	14.3
Total SSE Group	2,426.4		(19.0)	724.9	208.8	(13.0)	(32.5)	3,295.6

Note that the Group's 'Net Debt to EBITDA' metric is derived after removing the proportionate EBITDA from the following debt-financed Beatrice and Seagreen joint ventures. This adjustment is £179.6m (2023: £146.9m) resulting in EBITDA on continuing operations for inclusion in the Debt to EBITDA metric of £3,116.0m (2023: £3,235.2m).

For 31 March 2024 the £724.9m (2023: £704.2m) combined depreciation, impairment and amortisation charges included non-exceptional impairments net of reversals totalling £33.0m (2023: £43.9m).

6. Segmental information (continued)

6.3 Earnings before interest, taxation, depreciation and amortisation ('EBITDA') (continued)

		2023 (restated*)
	Adjusted operating profit reported to the Board (note 6.2)		Depreciation on fair value uplifts	Depreciation/ impairment/ amortisation before exceptional charges	Joint Venture / Associate share of depreciation and amortisation	Release of deferred income	Share of non-controlling interest depreciation and amortisation	Adjusted EBITDA
	£m		£m	£m	£m	£m	£m	£m
Continuing operations
SSEN Transmission	372.7		-	114.1	-	(2.1)	(9.7)	475.0
SSEN Distribution	382.4		-	182.2	-	(10.6)	-	554.0
SSE Renewables	561.8		(18.8)	179.8	92.8	(0.1)	-	815.5
SSE Thermal	1,031.9		(10.0)	114.5	60.8	-	-	1,197.2
Gas Storage	212.5		-	16.5	-	-	-	229.0
Energy Customer Solutions
SSE Business Energy	15.7		-	4.7	-	-	-	20.4
SSE Airtricity	5.6		-	6.9	-	-	-	12.5
SSE Enterprise	(7.0)		-	6.8	-	(0.2)	-	(0.4)
SSE Energy Markets	80.4		-	6.0	-	-	-	86.4
Corporate
Corporate unallocated	(87.0)		-	72.7	-	(0.9)	-	(15.2)
Neos Networks	(39.8)		-	-	47.5	-	-	7.7
Total SSE Group	2,529.2		(28.8)	704.2	201.1	(13.9)	(9.7)	3,382.1

*The comparative EBITDA by segment information has been restated. See note 2.3.1.

6. Segmental information (continued)

6.4 Capital and investment expenditure by segment

	Capital additions to intangible assets 2024 £m	Capital additions to property, plant and equipment 2024 £m	Capital additions to intangible assets 2023 £m	Capital additions to property, plant and equipment 2023 £m
Continuing operations			(restated*)	(restated*)
SSEN Transmission	12.8	784.7	7.2	536.6
SSEN Distribution	20.3	636.8	15.2	486.8

SSE Renewables	355.1	433.8	731.5	340.5

SSE Thermal	83.3	24.6	20.8	44.5
Gas Storage	-	0.8	-	6.3
Energy Customer Solutions
SSE Business Energy	43.7	-	38.9	0.4
SSE Airtricity	14.1	0.7	10.5	-

SSE Enterprise	26.4	32.4	16.2	37.0

SSE Energy Markets	723.4	-	809.9	-

Corporate unallocated	35.1	57.6	38.4	48.0
Total SSE Group	1,314.2	1,971.4	1,688.6	1,500.1
Increase in prepayments related to capital expenditure	-	215.1	-	6.8
Tarbert temporary generation additions	-	93.4	-	-
Decrease/(increase) in trade payables related to capital expenditure	2.5	(84.6)	(31.8)	132.2
Customer funded additions	-	(152.0)	-	(80.9)
Lease asset additions	-	(73.0)	-	(78.5)
Less non-cash items:
Allowances and certificates	(346.6)	-	(208.4)	-
Assets acquired through acquisitions	-	-	(515.2)	-
Net cash outflow	970.1	1,970.3	933.2	1,479.7

*The comparative capital and investment expenditure by segment information has been restated. See note 2.3.1.

Capital additions do not include assets acquired in acquisitions, assets acquired under leases or assets constructed that the Group were reimbursed by way of a government grant. During the year construction commenced on a temporary generation plant at the Group's Tarbert site for which the Group received reimbursements totalling £93.4m from government bodies (presented separately on the cash flow statement). Capital additions to intangible assets includes the cash purchase of emissions allowances and certificates (2024: £427.9m; 2023: £596.8m). These purchases are presented in the cash flow statement within operating activities since they relate to the obligation to surrender the allowances and certificates in line with operating volumes of emissions. Other non-cash additions comprise self-generated renewable obligation certificates.

6. Segmental information (continued)

6.4 Capital and investment expenditure by segment

31 March 2024
	Capital additions to intangible assets £m	Capital additions to property, plant and equipment £m	Capital Investment relating to Joint Ventures and Associates (i) £m	Allowances and certificates (ii) £m	Customer funded additions (iii) £m	Lease asset additions (iv) £m	Share of non-controlling interests (v) £m	Adjusted Investment and Capital Expenditure £m
Continuing operations
SSEN Transmission	12.8	784.7	-	-	-	(2.5)	(199.4)	595.6
SSEN Distribution	20.3	636.8	-	-	(152.0)	-	-	505.1

SSE Renewables	355.1	433.8	324.5	-	-	(16.3)	-	1,097.1

SSE Thermal	83.3	24.6	51.4	(59.7)	-	-	-	99.6
Gas Storage	-	0.8	-	-	-	-	-	0.8

Energy Customer Solutions
SSE Business Energy	43.7	-	-	-	-	-	-	43.7
SSE Airtricity	14.1	0.7	-	-	-	-	-	14.8

SSE Enterprise	26.4	32.4	-	-	-	(7.8)	-	51.0

SSE Energy Markets	723.4	-	-	(714.8)	-	-	-	8.6

Corporate unallocated	35.1	57.6	14.1	-	-	(46.4)	-	60.4
Total SSE Group	1,314.2	1,971.4	390.0	(774.5)	(152.0)	(73.0)	(199.4)	2,476.7

i) Represents equity or debt funding provided to joint ventures or associates in relation to capital expenditure projects.

ii) Allowances and Certificates consist of purchased carbon emissions allowances and generated or purchased renewable obligations certificates (ROCs) and are not included in the Group's Capital Expenditure and Investment alternative performance measure.

iii) Represents removal of additions to electricity and other networks funded by customer contributions.

iv) Represents removal of additions in respect of right of use assets recognised on the commencement date of a lease arrangement.

v) Represents the share of capital additions attributable to non-controlling interests.

6. Segmental information (continued)

6.4 Capital and investment expenditure by segment

	31 March 2023 (restated*)
	Capital additions to intangible assets £m	Capital additions to property, plant and equipment £m	Capital Investment relating to Joint Ventures and Associates (i) £m	Allowances and certificates (ii) £m	Customer funded additions (iii) £m	Acquired through business combinations (iv) £m	Lease asset additions (v) £m	Share of non-controlling interests (vi) £m	Adjusted Investment and Capital Expenditure £m
Continuing operations
SSEN Transmission	7.2	536.6	-	-	-	-	(1.6)	(46.7)	495.5
SSEN Distribution	15.2	486.8	-	-	(80.9)	-	(0.1)	-	421.0

SSE Renewables	731.5	340.5	391.8	-	-	(515.2)	(37.1)	-	911.5

SSE Thermal	20.8	44.5	87.9	-	-	-	-	-	153.2
Gas Storage	-	6.3	-	-	-	-	-	-	6.3

Energy Customer Solutions
SSE Business Energy	38.9	0.4	-	-	-	-	-	-	39.3
SSE Airtricity	10.5	-	-	-	-	-	-	-	10.5

SSE Enterprise	16.2	37.0	-	-	-	-	(2.9)	-	50.3

SSE Energy Markets	809.9	-	-	(805.2)	-	-	-	-	4.7

Corporate unallocated	38.4	48.0	18.7	-	-	-	(36.8)	-	68.3
Total SSE Group	1,688.6	1,500.1	498.4	(805.2)	(80.9)	(515.2)	(78.5)	(46.7)	2,160.6

*The comparative capital and investment expenditure by segment information has been restated. See note 2.3.1.

i) Represents equity or debt funding provided to joint ventures or associates in relation to capital expenditure projects.

iii) Represents removal of additions to electricity and other networks funded by customer contributions.

iv) Represents removal of additions achieved through business combination; for SSE Renewables additions of £515.2m refer to note 12. Note that the Group's Adjusted Investment, Capital and Acquisitions metric includes the £642.7m cash consideration paid for Business Combinations and totals £2,803.3m.

v) Represents removal of right of use assets recognised on the commencement date of a lease arrangement.

vi) Represents the share of capital additions attributable to non-controlling interests.

7. Exceptional items and certain re-measurements

	2024 £m	2023 £m
Continuing operations
Exceptional items
Asset impairments and related charges	(270.9)	(233.6)
Net gains on acquisitions/disposals of businesses and other assets	4.9	233.2
Total exceptional items	(266.0)	(0.4)
Certain re-measurements
Movement on operating derivatives (note 16)	452.2	(2,708.2)
Movement in fair value of commodity stocks	9.1	(9.0)
Movement on financing derivatives (note 16)	6.1	201.9
Share of movement on derivatives in jointly controlled entities (net of tax)	46.1	163.8
Total certain re-measurements	513.5	(2,351.5)

Exceptional items and certain re-measurements on continuing operations before taxation	247.5	(2,351.9)
Taxation
Taxation on other exceptional items	23.3	(34.1)
Taxation on certain re-measurements	(115.0)	499.6
Taxation	(91.7)	465.5

Total exceptional items and certain re-measurements on continuing operations after taxation	155.8	(1,886.4)

Discontinued operations
Exceptional items
Gas production asset impairments and related credits	-	35.0
Exceptional items and certain re-measurements on discontinued operations after taxation	-	35.0

Exceptional items and certain remeasurements are disclosed across the following categories within the income statement:

	2024 £m	2023 £m
Continuing operations
Cost of sales:
Movement on operating derivatives (note 16)	452.2	(2,708.2)
Movement in fair value of commodity stocks	9.1	(9.0)
	461.3	(2,717.2)
Operating costs:
Asset impairments and reversals	(270.9)	(233.6)
Other exceptional provisions and charges	-	3.2
	(270.9)	(230.4)
Operating income:
Net gains on acquisition/disposals of businesses and other assets	4.6	89.1
	4.6	89.1
Joint ventures and associates:
Net gains on acquisition of a joint venture	-	140.7
Share of movement on derivatives in jointly controlled entities (net of tax)	46.1	163.8
	46.1	304.5
Operating profit/(loss)	241.1	(2,554.0)

Finance income
Movement on financing derivatives (note 16)	6.1	201.9
Interest income on deferred consideration receipt	0.3	0.2
	6.4	202.1
Profit before tax on continuing operations	247.5	(2,351.9)
Discontinued operations
Gas Production asset impairments and related credits	-	35.0
Profit before tax on discontinued operations	-	35.0

7. Exceptional items and certain re-measurements (continued)

7.1 Exceptional items

7.1.1 Exceptional items in the year ended 31 March 2024

In the year to 31 March 2024, the Group recognised a net exceptional charge of £266.0m arising from its continuing operations. The net exceptional charge is primarily due to an exceptional impairment charge relating to the Group's gas storage assets of £134.1m, an exceptional impairment of £63.2m against the carrying value of the Group's investment in Triton Power Holdings Limited and an exceptional impairment charge of £73.6m against the Group's investment in Neos Networks.

The net exceptional charges/(credits) recognised can be summarised as follows:

	Property, plant and equipment £m	Provisions and other charges £m	Investment in joint ventures £m	Other assets £m	Total charges/ (credits) £m
Triton Power 50% joint venture - investment impairment charge (i)	-	-	63.2	-	63.2
Gas Storage - impairment charge (ii)	134.1	-	-	-	134.1
Neos Networks 50% joint venture - impairment charge (iii)	-	-	73.6	-	73.6
Enerveo acquisition (iv)	-	(18.3)	-	13.7	(4.6)
Other credits (v)	-	-	-	(0.3)	(0.3)
Total exceptional items continuing operations	134.1	(18.3)	136.8	13.4	266.0

(i) Triton Power 50% joint venture - investment impairment charge

The Group has recognised an impairment charge of £63.2m against the carrying value of the Group's investment in Triton Power Holdings Limited, reflecting future market price assumptions. The impairment was recognised in the first half of the year and, due to indicators of impairment existing at 31 March 2024, a formal impairment review was also performed as at that date. As a result of this assessment, the Group has not recognise any further charges or reversals to the investment carrying value of the Group's investment in Triton Power Holdings Limited.

(ii) Gas Storage - impairment charge

The Group performed a formal impairment review at 31 March 2024 to reassess the carrying value of its Gas Storage operations at Aldbrough and Atwick. As a result of the assessment, the Group recognised an exceptional impairment charge of £85.7m to the carrying value of the assets at Aldbrough and £48.4m to the carrying value of the assets at Atwick.

(iii) Neos Networks 50% joint venture - impairment charge

At 31 March 2024, the Group has performed a formal impairment assessment on the carrying value of its 50% joint venture investment, including shareholder loan balances, in Neos Networks Limited. The assessment indicated that the recoverable amount of the investment and shareholder loan receivable balances are impaired by £73.6m.

(iv) Enerveo acquisition

On 22 March 2024, the Group purchased the entire share capital of Enerveo Limited from Aurelius Antelope Limited for cash consideration of £1.0m. Enerveo Limited is a former subsidiary of SSE plc and the reacquisition reduces the Group's potential exposure to risk arising from performance guarantees provided by the Group. At 30 September 2023, the Group had recorded an exceptional charge of £50.5m in relation to its projected exposure in relation to these guarantees as part of its adoption of IFRS 17. On reacquisition this risk has been reduced and the exceptional charge recognised in the 6 months to 30 September 2023 has been reversed. Due to provisions that the Group had previously recognised for amounts due from Enerveo and Aurelius, the completion of the transaction has resulted in an exceptional credit of £4.6m being recognised on acquisition. Further detail on the transaction is included in note 12.

(v) Other credits

At 31 March 2024, the Group recognised further exceptional credits of £0.3m relating to the unwind of discounting on deferred consideration recognised on the part disposal of SSE Slough Multifuel Limited in the year ending 31 March 2021.

7.1.2 Exceptional items in the year ended 31 March 2023

In the year to 31 March 2023, the Group recognised a net exceptional charge of £0.4m arising from its continuing operations. The net exceptional charge was primarily due to a net impairment of £150.9m in relation to the Group's 50% investment in Triton Power Holdings Limited (see 7.1.2.iv below for further analysis of amounts recognised in relation to Triton), offset by an exceptional gain of £89.1m from the sale of land at Fiddler's Ferry, an impairment reversal of £45.7m related to the Group's Gas Storage operations at Aldbrough and an impairment reversal of £17.8m in relation to the Group's Great Island combined cycle gas turbine ('CCGT') plant in Ireland.

In discontinued operations, the Group recognised an exceptional gain of £35.0m relating to a provision release associated with the disposal of its Gas Production assets, which completed on 14 October 2021.

7. Exceptional items and certain re-measurements (continued)

7.1 Exceptional items (continued)

7.1.2 Exceptional items in the year ended 31 March 2023 (continued)

The net exceptional charges/(credits) recognised can be summarised as follows:

	Property, plant and equipment £m	Provisions and other charges £m	Investment in joint ventures £m	Cash and cash equivalents £m	Other receivables £m	Total charges/ (credits) £m
Thermal Electricity Generation (i)	(17.8)	-	-	-	-	(17.8)
Gas storage (ii)	(45.7)	-	-	-	-	(45.7)
Fiddler's Ferry (iii)	24.1	(53.2)	-	(60.0)	-	(89.1)
Triton Power 50% joint venture - investment acquisition and impairment (iv)	-	-	150.9	-	-	150.9
Neos Networks 50% joint venture - investment impairment charge (v)	-	-	5.9	-	-	5.9
Other credits (vi)	-	(1.5)	-	(2.1)	(0.2)	(3.8)
Total exceptional items continuing operations	(39.4)	(54.7)	156.8	(62.1)	(0.2)	0.4
Gas Production (vii)	-	(35.0)	-	-	-	(35.0)
Total exceptional items discontinued operations	-	(35.0)	-	-	-	(35.0)
Total exceptional items	(39.4)	(89.7)	156.8	(62.1)	(0.2)	(34.6)

(i) Thermal Electricity Generation - impairment reversal

At 31 March 2023, the Group carried out a formal impairment review to reassess the carrying value of its GB CCGT power stations and the Group's Great Island CCGT plant in Ireland. As a result of the review, the Group recognised an exceptional impairment reversal of £17.8m to the carrying value of the Group's Great Island CCGT plant.

(ii) Gas Storage - impairment reversal

At 30 September 2022, the Group recognised an impairment reversal of £201.1m on its Aldbrough Gas Storage facility due to future market price assumptions observable at that time. The Group also performed a formal impairment review at 31 March 2023 to reassess the carrying value of its Gas Storage operations at Atwick and Aldbrough. As a result of the assessment, the Group recognised an exceptional impairment of £155.4m to the carrying value of the assets at Aldbrough, resulting in a net impairment reversal for the year of £45.7m. The impairment previously recognised in relation to Atwick was fully reversed in the year ended 31 March 2022, and no impairment was required for the financial year ended 31 March 2023.

(iii) Fiddler's Ferry - land sale

On 30 June 2022, the Fiddler's Ferry site was sold to Peel NRE Developments Limited for cash consideration of £60.0m. The Group carried a decommissioning provision for the site of £53.2m and a residual asset of £24.1m, both of which were disposed of as part of the sale. As a result, the Group recognised an exceptional gain of £89.1m on disposal.

(iv) Triton Power 50% joint venture - acquisition and impairment

On 1 September 2022, the Group acquired 50% of the share capital of Triton Power Holdings Limited from Energy Capital Partners for headline consideration of £341.0m, shared equally with co-venturers Equinor (see note 12). The purchase price was agreed based on prices prevalent in the market during the summer, prior to completion of the transaction on 1 September 2022. The Group assessed that, due to movements in near term observable power prices between the transaction agreement date and the completion date, the fair value of the acquisition was £140.7m greater than the acquisition price. This bargain purchase was recognised as an exceptional gain in the Group's half year results to 30 September 2022. During the second half of the year ended 31 March 2023, the Group realised a significant proportion of the acquired fair value of the business through trading operations of the joint venture. As a result, the future recoverable value of the investment was lower at 31 March 2023 than at 1 September 2022 and the Group therefore recognised an impairment charge at 31 March 2023 of £291.6m.

A summary of exceptional items recognised in relation to Triton in the financial year to 31 March 2023 is set out below:

		Financial statement line item charge/(credit) is included within	Exceptional items and certain re-measurements £m
Recognition of bargain purchase	Joint venture and associates share of profit		(140.7)
Impairment of investment		Operating costs	291.6
Total exceptional items			150.9
Mark-to-market movement on operating derivatives		Joint venture and associates share of movement on derivatives	(213.9)
Share of tax on mark-to-market movement on operating derivatives		Joint venture and associates share of tax	41.9
Total certain re-measurements			(172.0)
Total exceptional items and certain re-measurements			(21.1)

7. Exceptional items and certain re-measurements (continued)

7.1 Exceptional items (continued)

7.1.2 Exceptional items in the year ended 31 March 2023 (continued)

(v) Neos Networks 50% joint venture - investment impairment and adjustments to consideration

At 31 March 2023, the Group assessed that the recoverable amount of its investment in Neos Networks was impaired by £37.7m, of which £5.9m was treated as exceptional. £5.9m of the impairment related to the fair value gain previously recognised on acquisition of the joint venture investment in March 2019, which was treated as an exceptional item. This reversal was recognised separately within exceptional items for consistent presentation. The balance of the impairment charge, being £31.8m, was recognised as part of adjusted operating profit.

(vi) Other credits

At 31 March 2023, the Group recognised further exceptional credits of £3.8m relating to reversal of previously recognised exceptional charges or judgements. These included i) reassessment of separation cost provisions associated primarily with the disposals of SSE Energy Services and SGN (credit of £9.7m), ii) credit of £0.2m in relation to the unwind of discounting on deferred consideration recognised on the part disposal of SSE Slough Multifuel Limited in the year ending 31 March 2021, iii) reassessment of impairments associated with Heat Networks assets credit of £0.4m, partially offset by iv) £6.5m charge recognised in relation to provisions in connection with the sale of the Contracting and Rail business in June 2021.

Exceptional items within discontinued operations in the year ended 31 March 2023

(vii) Gas Production - gain on disposal

On 4 November 2022, RockRose Energy Limited received HMRC clearance in respect of tax treatment in relation to the Group's disposal of its Gas Production business to Viaro Energy (through its subsidiary RockRose Energy Limited), which completed on 14 October 2021. The Group had indemnified RockRose Energy Limited in relation to certain tax liabilities that it might suffer as a result of the transaction, and this formed part of the provision which was recognised on the disposal of the Gas Production business. The HMRC clearance indicated that no such tax liabilities arise for RockRose Energy Limited and as a result the Group released the £35.0m provision relating to the indemnity as an adjustment to the loss on disposal recognised. The adjustment was recognised in discontinued operations in the year ended 31 March 2023.

7.2 Certain re-measurements

The Group, through its SSE Energy Markets business, enters into forward commodity purchase (and sales) contracts to meet the future demand requirements of its SSE Business Energy and SSE Airtricity supply businesses, to optimise the value of its SSE Renewables and SSE Thermal power generation assets or to conduct other trading subject to the value at risk limits set out by the Energy Markets Risk Committee. Certain of these contracts (predominantly electricity, gas and other commodity purchase contracts) are determined to be derivative financial instruments under IFRS 9 "Financial Instruments" and as such are required to be recorded at their fair value. Conversely, commodity contracts that are not financial instruments under IFRS 9 (predominantly electricity sales contracts) are accounted for as 'own use' contracts and are not recorded at their fair value. Inventory purchased to utilise excess capacity ahead of an optimised sale in the market by the Gas Storage business is held as trading inventory at fair value with changes in value recognised within 'certain re-measurements'. In addition, the mark-to-market valuation movements on the Group's contracts for difference contracts entered into by SSE Renewables that are not designated as government grants, and which are measured as Level 3 fair value financial instruments are also included within 'certain re-measurements'.

Changes in the fair value of those commodity contracts designated as financial instruments and trading inventory are therefore reflected in the income statement. The Group shows the change in the fair value of these forward contracts and trading inventory separately as "certain re-measurements", as the Group does not believe this mark-to-market movement is relevant to the underlying performance of its businesses.

At 31 March 2024, changes in global commodity markets and in SSE's contractual positions have resulted in a positive net mark-to-market remeasurement on commodity contracts designated as financial instruments, contracts for difference contracts and trading inventory of £461.3m (gain) (2023: £2,717.2m (loss)). It should be noted that the net IFRS 9 position on operating derivatives at 31 March 2024 is an asset of £51.4m (2023: £386.9m liability).

The mark-to-market gain in the year has resulted in a deferred tax charge of £115.0m (2023: £499.6m credit), which has been reported separately as part of certain re-measurements. In addition, the Group has recognised gains of £6.1m (2023: £201.9m gain) on the remeasurement of certain interest rate and foreign exchange contracts through the income statement, gains on the remeasurement of cash flow hedge accounted contracts of £6.5m (2023: £43.3m gain) in other comprehensive income and a loss on the equity share of the remeasurement of cash flow hedge accounted contracts in joint ventures of £40.9m (2023: £342.4m gain).

The re-measurements arising from IFRS 9 and the associated deferred tax are disclosed separately to aid understanding of the underlying performance of the Group.

8. Finance income and costs

	2024			2023
	Before exceptional items and certain re-measurements £m	Exceptional items and certain re-measurements £m	Total £m	Before exceptional items and certain re-measurements £m	Exceptional items and certain re-measurements £m	Total £m
Finance income:
Interest income from short term deposits	60.3	-	60.3	17.5	-	17.5
Interest on pension scheme assets ⁽ⁱ⁾	26.2	-	26.2	16.2	-	16.2
Other interest receivable:
Joint ventures and associates	78.4	-	78.4	67.6	-	67.6
Other receivable	33.9	0.3	34.2	34.0	0.2	34.2
	112.3	0.3	112.6	101.6	0.2	101.8
Total finance income	198.8	0.3	199.1	135.3	0.2	135.5
Finance costs:
Bank loans and overdrafts	(77.4)	-	(77.4)	(50.1)	-	(50.1)
Other loans and charges	(274.3)	-	(274.3)	(339.1)	-	(339.1)
Notional interest arising on discounted provisions	(25.2)	-	(25.2)	(22.1)	-	(22.1)
Lease charges	(25.8)	-	(25.8)	(29.4)	-	(29.4)
Less: interest capitalised ⁽ⁱⁱ⁾	84.4	-	84.4	44.0	-	44.0
Total finance costs	(318.3)	-	(318.3)	(396.7)	-	(396.7)
Changes in fair value of financing derivatives at fair value through profit or loss	-	6.1	6.1	-	201.9	201.9
Net finance costs	(119.5)	6.4	(113.1)	(261.4)	202.1	(59.3)
Presented as:
Finance income	198.8	6.4	205.2	135.3	202.1	337.4
Finance costs	(318.3)	-	(318.3)	(396.7)	-	(396.7)
Net finance costs	(119.5)	6.4	(113.1)	(261.4)	202.1	(59.3)

i) The interest income on net pension assets for the year ended 31 March 2024 of £26.2m (2023: £16.2m) represents the interest earned under IAS 19.

ii) The capitalisation rate applied in determining the amount of borrowing costs to capitalise in the year was 4.20% (2023: 4.11%).

Adjusted net finance costs are arrived at after the following adjustments:

	2024	2023
	£m	£m
Net finance costs	(113.1)	(59.3)
(add)/less:
Share of interest from joint ventures and associates	(110.7)	(70.1)
Interest on pension scheme liabilities	(26.2)	(16.2)
Movement on financing derivatives (note 16)	(6.1)	(201.9)
Exceptional item	(0.3)	(0.2)
Share of net finance cost attributable to non-controlling interests	4.7	2.1
Adjusted net finance costs	(251.7)	(345.6)

Notional interest arising on discounted provisions	25.2	22.1
Lease charges	25.8	29.4
Hybrid coupon payment (note 14)	(73.1)	(38.8)
Adjusted net finance costs for interest cover calculations	(273.8)	(332.9)

9. Taxation

9.1 Analysis of charge recognised in the income statement

	2024			2023
	Before exceptional items and certain re-measure-ments	Exceptional items and certain re-measure-ments	Total	Before exceptional items and certain re-measure-ments	Exceptional items and certain re-measure-ments	Total
	£m	£m	£m	£m	£m	£m
Current tax
Corporation tax	366.1	(36.5)	329.6	292.3	(20.9)	271.4
Adjustments in respect of previous years	(25.6)	31.8	6.2	(22.0)	5.3	(16.7)
Total current tax	340.5	(4.7)	335.8	270.3	(15.6)	254.7
Deferred tax
Current year	155.3	128.2	283.5	72.9	(444.6)	(371.7)
Adjustments in respect of previous years	23.2	(31.8)	(8.6)	12.3	(5.3)	7.0
Total deferred tax	178.5	96.4	274.9	85.2	(449.9)	(364.7)

Total taxation charge/(credit)	519.0	91.7	610.7	355.5	(465.5)	(110.0)

9.2 Adjusted current tax charge

The 'adjusted current tax charge' and the 'adjusted effective rate of tax', which are presented in order to best represent underlying performance by making similar adjustments to the 'adjusted profit before tax' measure, are arrived at after the following adjustments:

	2024 £m	2024 %	2023 £m	2023 %
Group tax charge/(credit) and effective rate	610.7	25.6	(110.0)	12.7
Add: reported deferred tax (charge)/credit and effective rate	(274.9)	(11.5)	364.7	(42.0)
Reported current tax charge and effective rate	335.8	14.1	254.7	(29.3)
Effect of adjusting items		1.3		41.0
Reported current tax charge and effective rate on adjusted basis	335.8	15.4	254.7	11.7
add:
Share of current tax from joint ventures and associates	38.5	1.8	89.6	4.1
Less:
Current tax credit on exceptional items	4.7	0.2	15.6	0.7
Share of current tax attributable to non-controlling interests	(8.0)	(0.3)	(1.1)	(0.1)
Adjusted current tax charge and effective rate	371.0	17.1	358.8	16.4

10. Dividends

10.1 Ordinary dividends

	Year ended 31 March 2024			Year ended 31 March 2023
	Total £m	Settled via scrip £m	Pence per ordinary share	Total £m	Settled via scrip £m	Pence per ordinary share

Interim - year ended 31 March 2024	218.3	8.8	20.0	-	-	-
Final - year ended 31 March 2023	738.1	29.8	67.7	-	-	-
Interim - year ended 31 March 2023	-	-	-	313.2	159.0	29.0
Final - year ended 31 March 2022	-	-	-	642.6	322.5	60.2
	956.4	38.6		955.8	481.5

The final dividend of 67.7p per ordinary share declared in respect of the financial year ended 31 March 2023 (2022: 60.2p) was approved at the Annual General Meeting on 20 July 2023 and was paid to shareholders on 21 September 2023. Shareholders were able to elect to receive ordinary shares credited as fully paid instead of the cash dividend under the terms of the Company's scrip dividend scheme.

10 Dividends (continued)

10.1 Ordinary dividends (continued)

For dividends paid in relation to the financial year ended 31 March 2022 and in relation to the subsequent years to 31 March 2026, the Group's approved policy is to repurchase shares to reduce the scrip's dilutive effects, if the scrip take-up exceeds 25% of the full year dividend in any given year. The overall scrip dividend take-up for the financial year ended 31 March 2023 was 18.0%, and SSE has therefore not initiated a share buy-back in the current year. For the financial year ended 31 March 2022 the overall scrip take-up was 38.3% and therefore under the share buyback programme 6.9m of shares were repurchased and cancelled during the year ended 31 March 2023 for total consideration of £107.6m (including stamp duty and commission).

An interim dividend of 20.0p per ordinary share (2023: 29.0p) was declared and paid on 8 March 2024 to those shareholders on the SSE plc share register on 12 January 2024. Shareholders were able to elect to receive ordinary shares credited as fully paid instead of the interim cash dividend under the terms of the Company's scrip dividend scheme.

The proposed final dividend of 40.0p per ordinary share based on the number of issued ordinary shares at 31 March 2024 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Based on shares in issue at 31 March 2024, this would equate to a final dividend of £438.5m.

11. Earnings per Share

11.1 Basic earnings per share

The calculation of basic earnings/(losses) per ordinary share at 31 March 2024 is based on the net profit/(loss) attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding during the year ended 31 March 2024.

11.2 Adjusted earnings per share

Adjusted earnings/(losses) per share has been calculated by excluding the charge for deferred tax, interest on net pension liabilities under IAS 19, retained Gas Production decommissioning costs, the depreciation charged on fair value uplifts, the share of profit attributable to non-controlling interests and the impact of exceptional items and certain re-measurements (note 7).

	Year ended 31 March 2024	Year ended 31 March 2024	Year ended 31 March 2023	Year ended 31 March 2023
Continuing operations	Earnings £m	Earnings per share pence	(Losses)/earnings £m	(Losses)/earnings per share pence

Basic earnings/(losses) on continuing operations used to calculate adjusted EPS	1,710.5	156.7	(158.0)	(14.7)
Exceptional items and certain re-measurements (note 7)	(155.8)	(14.3)	1,886.4	175.4
Basic excluding exceptional items and certain re-measurements	1,554.7	142.4	1,728.4	160.7
Adjusted for:
Decommissioning Gas Production	9.9	0.9	(50.5)	(4.7)
Depreciation charge on fair value uplifts	19.0	1.7	28.8	2.7
Interest on net pension scheme assets/(liabilities)	(26.2)	(2.4)	(16.2)	(1.5)
Deferred tax (note 9)	178.5	16.3	85.2	7.9
Deferred tax from share of joint ventures and associates	20.3	1.9	14.4	1.3
Deferred tax on non-controlling interest	(25.6)	(2.3)	(4.1)	(0.4)
Adjusted	1,730.6	158.5	1,786.0	166.0

Basic	1,710.5	156.7	(158.0)	(14.7)
Dilutive effect of outstanding share options	-	(0.2)	-	-
Diluted	1,710.5	156.5	(158.0)	(14.7)

Reported earnings/(losses) per share

	2024	2024	2023	2023
	Earnings £m	Earnings per share pence	(Losses)/earnings £m	(Losses)/earnings per share pence
Basic
Earnings/(losses) per share on continuing operations	1,710.5	156.7	(158.0)	(14.7)
Earnings per share on discontinued operations	-	-	35.0	3.3
Earnings/(losses) per share attributable to ordinary shareholders	1,710.5	156.7	(123.0)	(11.4)
Dilutive effect of outstanding share options	-	(0.2)	-	-
Diluted earnings/(losses) per share attributable to ordinary shareholders	1,710.5	156.5	(123.0)	(11.4)

11. EARNINGS PER SHARE (CONTINUED)

11.2 Adjusted earnings per share (continued)

The weighted average number of shares used in each calculation is as follows:

	31 March 2024 Number of shares (millions)	31 March 2023 Number of shares (millions)

For basic and adjusted earnings per share	1,091.8	1,075.6
Effect of exercise of share options	1.5	1.7
For diluted earnings per share	1.093.3	1,077.3

11.3 Dividend cover

The Group's adjusted dividend cover metric is calculated by comparing adjusted earnings per share on continuing operations to the projected dividend per share payable to ordinary shareholders.

	2024	2024	2024	2023	2023	2023
	Earnings per share	Dividend per share	Dividend Cover	(Losses)/Earnings per share	Dividend per share	Dividend cover
	(pence)	(pence)	(times)	(pence)	(pence)	(times)

Reported earnings/(losses) per share (continuing operations)	156.7	60.0	2.61	(14.7)	96.7	(0.15)
Adjusted earnings per share (continuing operations)	158.5	60.0	2.64	166.0	96.7	1.72

12. Acquisitions AND disposals

12.1 Acquisitions

12.1.1 Current year acquisitions

Enerveo acquisition

On 22 March 2024, the Group completed the acquisition of Enerveo Limited ('Enerveo') from Aurelius Antelope Limited ('Aurelius') for cash consideration of £1.0m. Enerveo (formerly named SSE Contracting Limited) is a former subsidiary of the Group that was disposed to Aurelius on 30 June 2021. Under the terms of the sale agreement in 2021, SSE retained performance guarantees over certain contracts delivered by Enerveo. In the six months ended 30 September 2023, the Group recognised an exceptional charge of £50.5m in relation to its estimated settlement costs in relation to these guarantees in accordance with IFRS 9, which included cash advances to Enerveo of £12.3m. In the previous financial year the Group had also recognised provisions for amounts due from Enerveo and Aurelius totalling £12.2m.

On completion of the transaction on 22 March 2024, the Group reversed the exceptional charge of £50.5m recognised in the first half of the financial year. Due to the consolidation of liabilities retained by Enerveo which SSE had made provision against, the reacquisition of Enerveo resulted in a gain of £4.6m, which has been recognised as an exceptional item in the year. Following completion, SSE has restructured and settled external liabilities totalling £15.2m and settled certain balances of £30.9m due to SSE companies which are included in the acquired balances below. At 31 March 2024, the goodwill balance of £5.6m implied by the transaction was written off. This write-off has been included within the total gain of £4.6m referred above. SSE is currently conducting a review to develop and then implement a longer-term strategy for each part of the business. The following table summarises the assets and liabilities acquired in the transaction.

	Fair value at 22 March 2024 £m
Assets acquired and liabilities assumed:
Property, plant and equipment	11.7
Intangible assets	2.5
Inventories	3.9
Trade and other receivables	40.1
Prepayments and accrued income	55.1
Cash	13.2
Trade and other payables	(91.0)
Deferred income	(20.0)
Lease liabilities	(12.8)
Provisions	(7.3)
Total net liabilities acquired	(4.6)
Goodwill	5.6
Cash consideration	1.0

12. ACQUISITIONS AND DISPOSALS (CONTINUED)

12.1 Acquisitions (continued)

12.1.2 Prior year acquisitions

European onshore renewables development platform

On 1 September 2022 the Group completed the 100% acquisition of a European onshore renewable energy development platform from Siemens Gamesa Renewable Energy ("SGRE") for cash consideration of £519.5m. The SGRE portfolio is mainly located in Spain with the remainder across France, Italy and Greece.

The intangible development assets acquired were late-stage windfarm development costs. The goodwill recognised represents early stage intangible development costs that do not qualify for separate recognition as set out in the table below.

	Fair value at 1 September 2022 £m
Assets acquired and liabilities assumed:
Intangible development assets	104.4
Inventories	3.0
Trade and other receivables	20.3
Cash	11.5
Trade and other payables	(3.5)
Deferred tax liability	(27.0)
Total net assets acquired	108.7
Goodwill	410.8
Cash consideration	519.5

Triton Power - 50% joint venture acquisition

On 1 September 2022, the Group announced that SSE Thermal and Equinor had completed the acquisition of Triton Power Holdings Limited from Energy Capital Partners for headline consideration of £341m shared equally. The headline consideration included £96m of loans which were settled on completion of the transaction and replaced with shareholder loans of £48.0m each from SSE and Equinor. The Group's share of the cash consideration paid for the equity investment was therefore £123.2m after completion adjustments. Triton Power operates the 1.2GW Saltend Power Station in the Humber along with two smaller plants, Indian Queens Power Station, a 140MW OCGT in Cornwall, and Deeside Power Station, a decommissioned CCGT in north Wales.

Other asset acquisitions

During the year ended 31 March 2023, the Group made other smaller asset acquisitions (of special purpose vehicles as opposed to businesses) for cash consideration of £19.8m and deferred consideration of £34.9m. The total cash consideration for business combinations of £642.7m is included in the Group's Adjusted investment, capital and acquisition metric.

12.2 Disposals

12.2.1 Current year disposals

There have been no significant disposals in the current year.

12.2.2 Prior year disposals

During the year ended 31 March 2023 the Group recognised a gain of £868.3m within equity from the sale of a 25% non-controlling equity stake in its SSEN Transmission business (being the company Scottish Hydro Electric Transmission plc) and an exceptional income statement gain of £89.1m from the disposal of the Fiddler's Ferry site.

25% non-controlling equity stake in Scottish Hydro Electric Transmission plc: On 30 November 2022, the Group completed the disposal of a 25% non-controlling equity stake in Scottish Hydro Electric Transmission plc ('SHET') to Ontario Teachers' Pension Plan ('OTPP') for cash consideration of £1,465.0m, less transactions costs of £16.9m, at which time the consolidated carrying value of SHET's net assets was £2,319.3m. As the transaction did not result in a loss of control, the Group recognised a gain of £868.3m within equity attributable to owners of the parent company. The Group considered the rights and obligations and operating protocols arising from the disposal and has determined that the non-controlling interest in SHET has the characteristics of equity and has classified the non-controlling interest as such.

12. ACQUISITIONS AND DISPOSALS (CONTINUED)

12.2 Disposals (continued)

12.2.2 Prior year disposals (continued)

	30 November 2022 £m

Carrying value of non-controlling interests disposed	(579.8)
Cash consideration paid by non-controlling interest holder	1,465.0
Transaction costs	(16.9)
Excess of consideration received recognised in equity	868.3

Fiddler's Ferry land sale: On 30 June 2022, the Fiddler's Ferry site was sold to Peel NRE Developments Limited for cash proceeds of £60m. The Group released a decommissioning provision related to the site, which resulted in an exceptional gain on disposal of £89.1m.

12.2.3 Prior year disposal reconciliation

The following table summarises disposals of subsidiaries, businesses and assets during the prior financial year, including other assets and investments disposed of as part of the normal course of business but before recognition of impairment charges, which are noted in the relevant respective notes to the financial statements.

	2023
	Total
	£m
Net assets disposed:
Property, plant and equipment	24.1
Provisions	(88.2)
Net assets	(64.1)

Proceeds of disposal:
Consideration	60.0
Net proceeds	60.0
Gain on disposal	124.1

Presentation:
Continuing operations
Income statement exceptional gain	89.1
	89.1
Discontinued operations
Income statement exceptional credit	35.0
SSE Group	124.1

Net proceeds of disposal		60.0
Net cash proceeds		60.0
Plus net cash proceeds from sale of non-controlling interest in SHET		1,448.1
Net cash proceeds		1,508.1

13. Sources of finance

13.1 Capital management

The Board's policy is to maintain a strong balance sheet and credit rating to support investor, counterparty and market confidence in the Group and to underpin future development of the business. The Group's credit ratings are also important in maintaining an efficient cost of capital and in determining collateral requirements throughout the Group. As at 31 March 2024, the Group's long-term credit rating was BBB+ positive outlook for Standard & Poor's and Baa1 stable outlook for Moody's.

The maintenance of a medium-term corporate model is a key control in monitoring the development of the Group's capital structure and allows for detailed scenarios and sensitivity testing. Key ratios drawn from this analysis underpin regular updates to the Board and include the ratios used by the rating agencies in assessing the Group's credit ratings.

The Group's debt requirements are principally met through issuing bonds denominated in Sterling and Euros as well as private placements and medium-term bank loans including those with the European Investment Bank.

During the year SSE plc issued an 8 year €750m Green Bond at coupon of 4.0%. The bond has been left in Euros as a net investment hedge for the Group's Euro denominated subsidiaries. In the year, SSE plc also redeemed US Private Placement debt of combined £155.0m and a €700m Eurobond with a coupon at 1.75%. In January 2024 Scottish Hydro Electric Transmission plc issued a 20 year £500m Green Bond at a coupon of 5.5%.

SSE's adjusted net debt and hybrid capital was £9.4bn at 31 March 2024, compared with £8.9bn at 31 March 2023.

The Group has an established €1.5bn Euro commercial paper programme (paper can be issued in a range of currencies and swapped into Sterling) and as at 31 March 2024 there was £840m commercial paper outstanding (2023: £919m). During the year ended 31 March 2024, the Group issued new debt instruments totalling £1,982m and redeemed £1,744m of maturing debt in the year. The Group also continues to have access to £3.5bn of revolving credit facilities (2023: £3.5bn), which includes £750m relating to Scottish Hydro Electric Transmission plc (2023: £750m) (see 13.2.1). As at 31 March 2024 there were no (2023: £100m) drawings against these committed facilities (2023: 3% utilisation).

The Group capital comprises:

	2024 £m	2023 £m (restated*)
Total borrowings (excluding lease obligations)	8,726.2	8,654.0
Less: Cash and cash equivalents	(1,035.9)	(891.8)
Net debt (excluding hybrid equity)	7,690.3	7,762.2
Hybrid equity	1,882.4	1,882.4
External net debt attributable to non-controlling interests	(490.2)	(434.2)
Cash held/(posted) as collateral and other short term loans	353.2	(316.3)
Adjusted net debt and hybrid capital	9,435.7	8,894.1
Equity attributable to shareholders of the parent	9,170.8	8,551.7
Total capital excluding lease obligations	18,606.5	17,445.8

*The comparative has been restated. See note 3.1.

Under the terms of its major borrowing facilities, the Group is required to comply with the following financial covenant:

· Interest Cover Ratio: The Group shall procure that the ratio of Operating Profit to Net Interest Payable for any relevant period is not less than 2.5 to 1.

The following definitions apply in the calculation of these financial covenants:

· "Operating Profit" means, in relation to a relevant period, the profit on ordinary activities before taxation (after adding back Net Interest Payable) of the Group for that relevant period but after adjusting this amount to exclude any exceptional profits (or losses) and, for the avoidance of doubt, before taking account of any exceptional profits (or losses) and excluding the effect of IFRS 9 remeasurements.

· "Net Interest Payable" means, in respect of any relevant period, interest payable during that relevant period less interest receivable during that relevant period.

In summary, the Group's intent is to balance returns to shareholders between current returns through dividends and long-term capital investment for growth. In doing so, the Group will maintain its capital discipline and will continue to operate within the current economic environment prudently. There were no changes to the Group's capital management approach during the year.

13. SOURCES OF FINANCE (CONTINUED)

13.2 Loans and other borrowings

	2024 £m	2023 £m
Current
Short-term loans	1,044.5	1,738.5
Lease obligations	83.5	82.1
	1,128.0	1,820.6
Non-current
Loans	7,681.7	6,915.5
Lease obligations	324.0	323.8
	8,005.7	7,239.3

Total loans and borrowings	9,133.7	9,059.9

Cash and cash equivalents	(1,035.9)	(891.8)
Unadjusted net debt	8,097.8	8,168.1
Add/(less):
Hybrid equity (note 14)	1,882.4	1,882.4
External net debt attributable to non-controlling interests (see below)	(490.2)	(434.2)
Lease obligations	(407.5)	(405.9)
Cash held/(posted) as collateral and other short term loans	353.2	(316.3)
Adjusted net debt and hybrid capital	9,435.7	8,894.1

The adjustment relating to the non-controlling interest share of Scottish Hydro Electric Transmission plc external net debt is £490.2m at 31 March 2024 (2023: £434.2m) and relates to 25% of external loans of £2,088.0m (2023: £1,744.8m) net of cash and cash equivalents of £127.4m (2023: £7.8m). Cash and cash equivalents (which are presented as a single class of asset on the face of the balance sheet) comprise cash at bank and short term highly liquid investments with a maturity of three months or less.

13.2.1 Borrowing facilities

The Group also continues to have access to £3.5bn of revolving credit facilities (2023: £3.5bn). As at 31 March 2024 there were no drawings against these committed facilities (2023: £100m). The details of the five committed facilities as at 31 March 2024 are:

· a £1.3bn revolving credit facility for SSE plc maturing March 2026 (2023: £1.3bn);

· a £0.2bn bilateral facility for SSE plc maturing October 2026 (2023: £0.2bn);

· a £0.75bn facility for Scottish Hydro Electric Transmission plc maturing November 2026 (2023: £0.75bn);

· a £0.25bn facility for Scottish Hydro Electric Distribution plc and Southern Electric Power Distribution plc maturing November 2026 (2023: £0.25bn); and

· a £1.0bn committed facility for SSE plc maturing February 2025 (2023: £1.0bn).

The £1.3bn revolving credit facility and £0.2bn bilateral facility are both in place to provide back-up to the commercial paper programme and support the Group's capital expenditure plans. The Transmission and Distribution related facilities, both of which have 1 year extension options at the borrower's discretion, were entered into to help cover the capital expenditure and working capital of those businesses. Both facilities were extended to November 2026 in the year and have a further year option. The £1bn committed facility for SSE plc was entered into to provide cover for potential cash collateral requirements, if periods of extreme volatility return to the commodity markets. The facility had a 1 year extension option at the lender's discretion that was extended for a year to February 2025. There were no drawings on the SSE plc and Distribution facilities at 31 March 2024 and 31 March 2023 and no drawings on the £750m Transmission facility at 31 March 2024 compared to £100m at 31 March 2023.

During the year SSE plc issued an 8 year €750m Green Bond at a coupon of 4.0%. The bond has been left in Euros as a net investment hedge for the Group's Euro denominated subsidiaries. Additionally Scottish Hydro Electric Transmission plc issued a 20 year £500m bond at a coupon of 5.5%. In the year SSE plc also redeemed US Private Placement debt of combined £155m and a €700m Eurobond with a coupon at 1.75%, and Scottish Hydro Electric Transmission plc repaid £100m of facility advances.

13. SOURCES OF FINANCE (CONTINUED)

13.2 Loans and borrowings (continued)

13.2.1 Borrowing facilities (continued)

The weighted average incremental borrowing rate applied to lease liabilities during the year was 4.98% (2023: 5.02%). Incremental borrowing rates applied to individual lease additions in the year ranged between 3.70% to 5.25% (2023: 4.03% to 5.06%).

13.3 Reconciliation of net increase in cash and cash equivalents to movement in adjusted net debt and hybrid capital

	2024	2023
	£m	£m
Increase/(decrease) in cash and cash equivalents	144.1	(157.5)
(Less)/add:
New borrowing proceeds	(1,982.2)	(1,914.7)
New hybrid equity proceeds	-	(831.4)
Repayment of borrowings	1,744.0	2,148.1
Non-cash movement on borrowings	166.0	(216.2)
Increase in external net debt attributable to non-controlling interests	56.0	434.2
(Decrease)/increase in cash held/posted as collateral and other short-term loans	(669.5)	241.6
Increase in adjusted net debt and hybrid capital	(541.6)	(295.9)

14. Equity

14.1 Share capital

	Number (millions)	£m
Allotted, called up and fully paid:
At 31 March 2023	1,093.9	547.0
Issue of shares (i)	2.3	1.1
At 31 March 2024	1,096.2	548.1

i. Shareholders were able to elect to receive ordinary shares in place of the final dividend of 67.7p per ordinary share (in relation to year ended 31 March 2023) and the interim dividend of 20.0p (in relation to the current year) under the terms of the Company's scrip dividend scheme. This resulted in the issue of 1,779,529 and 493,654 new fully paid ordinary shares respectively (2023: 18,241,941 and 9,413,103). In addition, the Company issued 0.8m (2023: 1.9m) shares during the year under the savings-related share option schemes (all of which were settled by shares held in Treasury) for a consideration of £9.2m (2023: £18.0m).

Under the share buyback programme in the year to 31 March 2023, 6.9m of shares were repurchased and cancelled for a total consideration of £107.6m (including stamp duty and commission). The nominal value of share capital repurchased and cancelled is transferred out of share capital and into the capital redemption reserve. The scrip dividend take-up for the financial year ended 31 March 2023 was 18.0%, which is below the 25.0% required by the share buyback programme, therefore there have been no share buybacks in the current financial year ended 31 March 2024.

The Company has one class of ordinary share which carries no right to fixed income. The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company.

Of the 1,096.2m shares in issue, 2.8m are held as treasury shares. These shares will be held by the Group and used to award shares to employees under the Sharesave scheme in the UK.

During the year, on behalf of the Company, the employee share trust purchased 1.3m shares for a total consideration of £21.8m (2023: 1.4m shares, consideration of £23.4m) to be held in trust for the benefit of employee share schemes. At 31 March 2024, the trust held 6.9m shares (2023: 6.5m) which had a market value of £113.9m (2023: £118.0m).

14.2 Hybrid Equity

	2024	2023
	£m	£m
GBP 600m 3.74% perpetual subordinated capital securities (i)	598.0	598.0
EUR 500m 3.125% perpetual subordinated capital securities (i)	453.0	453.0
EUR 1,000m 4.00% perpetual subordinated capital securities (ii)	831.4	831.4
	1,882.4	1,882.4

(i) 2 July 2020 £600m and €500m Hybrid Capital Bonds

The hybrid capital bonds issued in July 2020 have no fixed redemption date, but the Company may, at its sole discretion, redeem all but not part of the capital securities at their principal amount. The date for the first potential discretionary redemption of the £600m hybrid bond is 14 April 2026 and then every 5 years thereafter. The date for the first potential discretionary redemption of the €500m hybrid capital bond is 14 July 2027 and then every 5 years thereafter. For the £600m Hybrid the discretionary coupon payments are made annually on 14 April and for the €500m Hybrid the coupon payments are made annually on 14 July.

14. EQUITY (CONTINUED)

14.2 Hybrid Equity (continued)

(ii) 12 April 2022 €1,000m Hybrid Capital Bonds

The hybrid capital bond issued in April 2022 has no fixed redemption date, but the Company may, at its sole discretion, redeem all but not part of the capital securities at their principal amount. The date for the first potential discretionary redemption is 21 April 2028 and then every 5 years thereafter. The discretionary Hybrid coupon payments are made annually on 21 April.

(iii) Coupon Payments

In relation to the £600m hybrid equity bond a discretionary coupon payment of £22.4m (2023: £22.4m) was made on 14 April 2023 and for the €500m hybrid equity bond a discretionary coupon payment of £16.5m (2023: £16.4m) was made on 14 July 2023. The first discretionary coupon payment on the €1bn hybrid equity bond of £34.2m was paid on 21 April 2023.

The coupon payments in the year to 31 March 2024 consequently totalled £73.1m (2023: £38.8m).

The Company has the option to defer coupon payments on the bonds on any relevant payment date, as long as a dividend on the ordinary shares has not been declared. Deferred coupons shall be satisfied only on redemption; or on a dividend payment on ordinary shares, both of which occur at the sole option of the Company. Interest will accrue on any deferred coupon.

14.3 Equity attributable to non-controlling interests

This relates to equity attributable to non-wholly owned but controlled subsidiaries which are consolidated within the financial statements of the Group. At 31 March 2024 the amount attributable to non-controlling interests is £749.9m (2023: £649.1m), which relates to SHET of £709.1m (2023: £606.5m) and SSE Pacifico £40.8m (2023: £42.6m). The profit and loss attributable to non-controlling interests for the year ended 31 March 2024 is £100.8m gain (2023: £23.6 gain), which relates to SHET £101.5m gain (2023: £25.5m) and SSE Pacifico £0.7m loss (2023: £1.9m loss).

15. Retirement Benefit Obligations

15.1 Valuation of combined pension schemes

	Quoted	Unquoted	Value at 31 March 2024	Quoted	Unquoted	Value at 31 March 2023
	£m	£m	£m	£m	£m	£m

Equities	196.9	-	196.9	94.3	-	94.3
Government bonds	1,215.3	-	1,215.3	1,381.6	-	1,381.6
Corporate bonds	-	-	-	122.8	-	122.8
Insurance contracts	-	500.3	500.3	-	532.4	532.4
Other investments	1,102.7	-	1,102.7	1,057.5	-	1,057.5
Total fair value of plan assets	2,514.9	500.3	3,015.2	2,656.2	532.4	3,188.6
Present value of defined benefit obligation			(2,593.6)			(2,647.5)
Surplus in the schemes			421.6			541.1
Deferred tax thereon (i)			(105.4)			(135.3)
Net pension asset			316.2			405.8

(i) Deferred tax rate of 25% applied to net pension surplus position (2023: 25%).

	Balance sheet presentation 2024	Balance sheet presentation 2023
	£m	£m

Retirement benefit asset	421.6	541.1
Net pension asset	421.6	541.1

15. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)

15.1 Valuation of combined pension schemes (continued)

Movements in the defined benefit assets and obligations during the year:

	2024			2023
	Assets £m	Obligations £m	Total £m	Assets £m	Obligations £m	Total £m

At 1 April	3,188.6	(2,647.5)	541.1	4,311.2	(3,726.3)	584.9

Included in Income Statement
Current service cost	-	(16.2)	(16.2)	-	(28.2)	(28.2)
Past service cost	-	(2.4)	(2.4)	-	(5.7)	(5.7)
Interest income/(cost)	148.5	(122.3)	26.2	114.8	(98.6)	16.2
	148.5	(140.9)	7.6	114.8	(132.5)	(17.7)
Included in Other Comprehensive Income
Actuarial gain/(loss) arising from:
Demographic assumptions	-	29.3	29.3	-	71.7	71.7
Financial assumptions	-	53.7	53.7	-	1,099.8	1,099.8
Experience assumptions	-	(46.2)	(46.2)	-	(135.1)	(135.1)
Return on plan assets excluding interest income	(192.0)	-	(192.0)	(1,115.6)	-	(1,115.6)
	(192.0)	36.8	(155.2)	(1,115.6)	1,036.4	(79.2)
Other
Contributions paid by the employer	28.1	-	28.1	53.1	-	53.1
Scheme participant's contributions	0.1	(0.1)	-	0.1	(0.1)	-
Benefits paid	(158.1)	158.1	-	(175.0)	175.0	-
	(129.9)	158.0	28.1	(121.8)	174.9	53.1

Balance at 31 March	3,015.2	(2,593.6)	421.6	3,188.6	(2,647.5)	541.1

Charges/(credits) recognised:
	2024	2023
	£m	£m
Service costs (charged to operating profit)	18.6	33.9
	18.6	33.9
(Credited)/charged to finance costs:
Interest on pension scheme assets	(148.5)	(114.8)
Interest on pension scheme liabilities	122.3	98.6
	(26.2)	(16.2)

16. Financial risk management

16.1 Financial risk management

The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's policies for risk management are established to identify the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Exposure to commodity, currency and interest rate risks arise in the normal course of the Group's business and derivative financial instruments are entered into to hedge exposure to these risks.

SSE has a Group wide risk committee reporting to the Group Executive Committee, which is responsible for reviewing the strategic, market, credit, operational and liquidity risks and exposures that arise from the Group's operating activities. In addition, the Group has two dedicated Energy Market risk committees reporting to the Group Executive Committee and Board respectively, with the Group Executive Sub-committee chaired by the Chief Financial Officer (the "Group Energy Markets Exposures Risk Committee") and the Board Sub-committee chaired by Non-Executive Director Tony Cocker (the "Energy Markets Risk Committee (EMRC)"). These Committees oversee the Group's management of its energy market exposures, including its approach to hedging.

During the year ended 31 March 2024, the Group continued to be exposed to the economic conditions impacting the primary commodities to which it is exposed (Gas, Carbon and Power). The Group's approach to hedging, and the diversity of its energy portfolios (across Wind, Hydro, Thermal and Customers) has provided certain mitigation of these exposures.

Exposure to the commodity, currency and interest rate risks noted arise in the normal course of the Group's business and derivative financial instruments are entered into to hedge exposure to these risks. The objectives and policies for holding or issuing financial instruments and similar contracts, and the strategies for achieving those objectives that have been followed during the year are explained within A6 Accompanying Information to the Group's consolidated financial statements.

The net movement reflected in the income statement can be summarised as follows:

	2024 £m	2023 £m
Operating derivatives
Total result on operating derivatives (i)	(573.1)	(2,980.2)
Less: amounts settled (ii)	1,025.3	272.0
Movement in unrealised derivatives	452.2	(2,708.2)

Financing derivatives (and hedged items)
Total result on financing derivatives (i)	370.6	81.3
Less: amounts settled (ii)	(364.5)	120.6
Movement in unrealised derivatives	6.1	201.9

Financial guarantee liabilities
Total result on financial guarantee liabilities (iii)	12.5	-
Net income statement impact	470.8	(2,506.3)

(i) Total result on derivatives in the income statement represents the total amounts (charged) or credited to the income statement in respect of operating and financial derivatives.

(ii) Amounts settled in the year represent the result on derivatives transacted which have matured or been delivered and have been included within the total result on derivatives.

(iii) Total result on financial guarantee liabilities in the income statement represents the total amounts credited or (charged) to the income statement in respect of the unwind of the financial liabilities and new or expiring contracts.

16. Financial risk management (continued)

16.2 Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

· Level 1 fair value measurements are those derived from unadjusted quoted market prices for identical assets or liabilities.

· Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

· Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

	2024
	Level 1	Level 2	Level 3	Total
	£m	£m	£m	£m
Financial Assets
Energy derivatives	357.7	121.6	0.5	479.8
Interest rate derivatives	-	113.0	-	113.0
Foreign exchange derivatives	-	7.5	-	7.5
Unquoted equity investments	-	-	3.2	3.2
	357.7	242.1	3.7	603.5

Financial Liabilities
Energy derivatives	-	(327.1)	(101.3)	(428.4)
Interest rate derivatives	-	(95.8)	-	(95.8)
Foreign exchange derivatives	-	(43.2)	-	(43.2)
Loans and borrowings	-	(0.9)	-	(0.9)
	-	(467.0)	(101.3)	(568.3)

There were no significant transfers out of Level 1 into Level 2 and out of Level 2 into Level 1 during the year ended 31 March 2024. There were no significant transfers out of Level 2 into Level 3 and out of Level 3 into Level 2 during the year ended 31 March 2024.

	2023
	Level 1	Level 2	Level 3	Total
	£m	£m	£m	£m
Financial Assets
Energy derivatives	-	743.9	22.0	765.9
Interest rate derivatives	-	227.8	-	227.8
Foreign exchange derivatives	-	11.5	-	11.5
Unquoted equity investments	-	-	27.4	27.4
	-	983.2	49.4	1,032.6

Financial Liabilities
Energy derivatives	(189.6)	(939.4)	(23.8)	(1,152.8)
Interest rate derivatives	-	(92.6)	-	(92.6)
Foreign exchange derivatives	-	(18.9)	-	(18.9)
Loans and borrowings	-	(154.6)	-	(154.6)
	(189.6)	(1,205.5)	(23.8)	(1,418.9)

There were no significant transfers out of Level 1 into Level 2 and out of Level 2 into Level 1 during the year ended 31 March 2023.

17. Capital commitments

	2024	2023
	£m	£m
Capital expenditure:
Contracted for but not provided	1,389.2	1,035.6

Contracted for but not provided capital commitments include the fixed contracted costs of the Group's major capital projects. In practice contractual variations may arise on the final settlement of these contractual costs. The increase from the prior year relates primarily to Transmission projects.

18. Related party transactions

The following transactions took place during the year between the Group and entities which are related to the Group, but which are not members of the Group. Related parties are defined as those in which the Group has control, joint control or significant influence over.

	2024				2023
	Sale of goods and services	Purchase of goods and services	Amounts owed from	Amounts owed to	Sale of goods and services	Purchase of goods and services	Amounts owed from	Amounts owed to
	£m	£m	£m	£m	£m	£m	£m	£m
Joint ventures:
Marchwood Power Limited	42.6	(63.2)	-	(13.0)	122.4	(228.5)	-	(16.8)
Clyde Windfarm (Scotland) Limited	5.6	(153.9)	-	(48.7)	4.8	(280.5)	0.1	(49.5)
Beatrice Offshore Windfarm Limited	4.8	(75.5)	2.0	(6.8)	4.7	(176.5)	1.0	(8.7)
Stronelairg Windfarm Limited	2.5	(75.6)	-	(20.8)	2.4	(146.2)	-	(21.7)
Dunmaglass Windfarm Limited	1.1	(32.2)	-	(8.6)	1.1	(66.4)	-	(9.1)
Neos Networks Limited	3.8	(28.5)	6.1	(4.7)	3.8	(23.8)	46.2	(5.8)
Seagreen Wind Energy Limited	19.8	(113.4)	11.3	(11.7)	35.2	(44.4)	22.9	(7.5)
Doggerbank A, B, C and D	36.5	-	10.7	-	25.4	-	7.6	-
Other Joint Ventures	18.0	(209.4)	6.7	(63.9)	14.0	(219.2)	1.1	(50.8)

The transactions with Marchwood Power Limited relate to the contracts for the provision of energy or the tolling of energy under power purchase arrangements.

The amounts outstanding are trading balances, are unsecured and will be settled in cash. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.

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22 May 2024

A YEAR OF DELIVERY, RESILIENCE & GROWTH

financial highlights: Delivering resilient earnings

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STRATEGIC HIGHLIGHTS: DELIVERING ESSENTIAL INFRASTRUCTURE

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Summarising movements on exceptional items and certain remeasurements

Exceptional items

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Maintaining a strong balance sheet

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Debt summary as at 31 March 2024

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Summarising cash and cash equivalents

Revolving Credit Facility / SHORT-TERM FUNDING

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Summarising movements on exceptional items
and certain remeasurements

Ensuring a strong debt structure through medium- and
long-term borrowings