Severn Trent Regulatory News (SVT)

31 January 2019

Severn Trent selected as Fast-Track Company

Severn Trent today welcomes the news from Ofwat that it has been selected as a fast track company following the assessment of its business plan for the period 2020-2025.

Key highlights of the Severn Trent plan, following the assessment include:

· Deemed efficient with upper quartile base costs across wholesale and retail, with a gross totex allowance of £6.4bn

· Additional 'Real Options' enhancement spend of c£160m to address Supply/Demand, Environmental and Water Trading opportunities approved as required

· Sustainable long term growth represented by a real c3.6%1 increase in RCV

· A broad set of customer ODIs which demonstrate ambition to deliver further improvements for customers

In its assessment, Ofwat said:

"Severn Trent Water's plan is high quality across a range of areas including securing cost efficiency, engaging customers, addressing affordability and vulnerability, embedding innovation, accounting for past delivery and securing confidence and assurance.…. We also commend Severn Trent for its 'pathfinding social purpose company' thinking, and for their initiative with the Purposeful Company Taskforce. "

Hafren Dyfrdwy

We acknowledge the initial assessment from Ofwat regarding the Hafren Dyfrdwy plan. We are pleased the progress we have made on our cost base in the past two years is reflected in our totex plan being approved. We look forward to continuing dialogue on other aspects of the plan in the coming months to get to the right outcome for customers.

Liv Garfield, Chief Executive of Severn Trent, said:

"We're truly delighted that Severn Trent has been selected as one of only three Fast Track companies by Ofwat in its assessment of the PR19 plans submitted for 2020-2025. It means we have real clarity on what challenges and opportunities lie in front of us. With our plan now agreed and commitments set a full 14 months before the start of the next AMP, the organisation can now focus on preparing for a fast start in April 2020 and continued success into AMP7."

Further Information

An updated investor summary of the Severn Trent plan will be available on our website from tomorrow.

A webcast and conference call with Liv Garfield, Chief Executive, James Bowling, Chief Financial Officer and Shane Anderson, Head of Economic Regulation, will be held on 6 February at 2pm (UK time) with an opportunity for Q&A.

The following link will direct you to the webcast:

https://edge.media-server.com/m6/p/6z7436kb

To dial into the audio, the details are as follows:

· UK and International dial in: +44 (0) 203 0095709

· US free phone dial in: 1 646 787 1226

· Conference code: 5379477

1. Equivalent RCV growth in nominal terms is c13.6%

Cautionary statement regarding forward-looking statements

This document contains statements that are, or may be deemed to be, 'forward-looking statements' with respect to Severn Trent's financial condition, results of operations and business and certain of Severn Trent's plans and objectives with respect to these items.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should', 'expects', 'believes', 'intends', 'plans', 'projects', 'potential', 'reasonably possible', 'targets', 'goal', 'estimates' or words with a similar meaning, and, in each case, their negative or other variations or comparable terminology. Any forward-looking statements in this document are based on Severn Trent's current expectations and, by their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future.

Forward-looking statements are not guarantees of future performance and no assurances can be given that the forward-looking statements in this document will be realised. There are a number of factors, many of which are beyond Severn Trent's control that could cause actual results, performance and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: the Principal Risks disclosed in our latest Annual Report and Accounts (which have not been updated since the date of its publication); changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Severn Trent or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this document will be realised. This document speaks as at the date of publication. Save as required by applicable laws and regulations, Severn Trent does not intend to update any forward-looking statements and does not undertake any obligation to do so. Past performance of securities of Severn Trent Plc cannot be relied upon as a guide to the future performance of securities of Severn Trent Plc.

Nothing in this document should be regarded as a profits forecast.

This document is not an offer to sell, exchange or transfer any securities of Severn Trent Plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended).