Centrica plc (CNA) Earnings Call Transcript & Summary

Hi. Good morning, everyone. I'm delighted to be joined by our Group CFO, Kate Ringrose; and our Chairman, Scott Wheway for the question-and-answer session. And I'm sure you've all had a chance to look at the results and to look at the presentation. So I would suggest that we dive straight in to take your questions. So Emma, if you could let people know how to do that, and we'll get going. So thank you.

[Operator Instructions] Your first question today is from the line of Alex Leng of UBS.

Yes, Alex here from UBS. I have 3 questions from me, if possible, please. Just first, you obviously are not giving guidance for 2021, but you have flagged GBP 100 million to GBP 120 million of new negatives today, which would be 1/4 of your operating profit for the continuing business. But then you also state potential restructuring savings coming through. So I just it might be useful to start if you could walk through a bridge of the various parts that you think could offset the new negatives. And do you think there are enough offsets in total for continuing EBIT to rise in 2021? I thought I'd start by trying with that. Then just coming on to the Spirit disposal process. The language is, the intention remains to sell the asset. And I just can't help but wonder whether this is sort of softer language than has been used in the past, especially in light of the sort of quite strong recovery in commodity prices since the disruption last year. And I guess also, you've now had about 6 months or so to talk to the market and establish its interest. I'm just wondering if there's anything you could share around that process with us. And then third and finally, I'm aware it's quite a sensitive topic, and it's probably quite difficult to answer. But just with the ongoing industrial action, there are various headlines and numbers around canceled appointments, backlogs, et cetera. Is there anything you can share with us regarding the potential implications? Are we seeing anything coming through customer numbers or satisfaction levels at this point?

Okay. Alex, well, thank you very much for that. Let me take the question on Spirit and on the industrial action, and then I'll ask Kate to talk you through some of the moving parts. But I would applaud you on your attempt to get us to give you guidance in a slightly different way. So Kate will talk you through some of the things we've spoken about, but I think there is a lot of uncertainty, which is obviously why we're not looking to give guidance. So on Spirit, I mean, our intention is absolutely to exit Spirit Energy. And you're right, commodity prices have recovered, which is really quite good. But you also know that the move to net zero, the decarbonization of the economy, means there are fewer people that are in the market for these types of assets. So there's not -- there's no signal to take in terms of the wording. I mean what I prefer to do is to tell you when we've done things rather than to necessarily tell you what we're going to do. So I wouldn't read anything into that. Our key focus is to get the portfolio where we want it, but it's not part of our portfolio, and make sure that we get the best value that we possibly can for the assets. But we also look forward to when we can focus more on the core businesses. So on the industrial action, so there are a number of questions you asked there. We measure our net promoter score for engineers, and it's substantial. It's in the 70s. Net promoter score is how many people say they like you versus how many people say they don't like you. So promoters less detractors. It's usually up in the 70s for engineers. That's probably in the 60s at the moment. So we see a little bit of an impact but not a huge amount. Now in terms of some of the numbers that are out there, when we entered into the lockdown first time, so it seems like a long time ago but less than a year ago, we postponed a huge amount of work because we weren't allowed to do it. So things like service visits and new services were deemed to be nonessential. We postponed them, but we caught up with them. Now in the numbers last year, the -- to the extent we didn't complete all of the annual services, as we give customers a refund for that part of the contract at GBP 65, that -- there's about GBP 7 million-or-so cost in last year for that. So -- but just over 100,000 customers either said they actually didn't want us to go into their house because of COVID or that we would struggle there. So that -- there's about GBP 7 million cost in there. What we did coming into the lockdown that we're in at the moment is, well, [indiscernible] we can -- actually were permitted to do annual service visits. But one of the things we're trying to do is to make sure that by delayering the organization, our colleagues have more of a voice. It's easier for me if there are fewer layers for me to go through to talk to them. And I picked up, in talking with our colleagues, that they were nervous actually going into houses for what they deem to be nonessential work for 2 reasons. One is, obviously there's a personal issue for them, and they go home to their families every night. But the second thing is, if you go ahead and do 6, 7 service visits a day or ideally 8 service visits a day, then they were worried that they could end up spreading coronavirus. And so we took the decision to be slightly stricter than the government guidelines, and we postponed again annual service visits. I think we've postponed, I said this at the Parliament Select Committee earlier this year, 230,000 to 240,000 service visits. We've postponed them, but we will perform those service visits within 3 months of the lockdown being lifted on our assessment that it's safe to do. So that's the big impact on customers, but it's about keeping them and our colleagues safe. In terms of the impact of the industrial action, we're prioritizing our elderly and vulnerable customers. But undoubtedly, when you have a number of your engineers on strike, it does impact service. And so what we've seen that over -- is got into a pattern in the last little while of Friday, Saturday, Sunday, Monday. And obviously, there's less demand at the weekend. But when we see that we've probably got a backlog which is not a large number, then we clear that within a day. So if the strike occurs on a Monday, we have that cleared by the Tuesday. But the service levels have held up really quite well. And it is regrettable that we have this industrial action, but I would note that the vast majority of our staff have signed up to new terms/conditions, and the dispute remains with one union. And we've actually been in talks with Acas over the past month or so, which does demand an element of confidentiality. But I'm encouraged by the fact that we are able to get into these talks, and I remain committed to -- if we can find a way to have a negotiated collected -- collective settlement so that we can move forward. I mean one of the things that we've been able to do with our new terms and conditions is increase recruitment. So we've recruited 50 apprentices over the last 2 years. We're now in the market. We're going to have 1,000 new apprentices by the end of next year. And we've got 5,000, 6,000, 7,000 applications just now. That's what our new terms/conditions allows us to do. It allows us to recommit to a direct labor model. So it is painful. The impacts are manageable just now. But I don't like the impact on our colleagues, I don't like to stress that they've gone through. But I'm really hopeful that we find a way through that. And with that, maybe we can ask Kate to take you through the moving parts that we discussed this morning for 2021.

No, perfect. So let me start with what we know and talk about it from what are the upsides that we know. So firstly, the restructuring benefit, we've talked about it being in excess of GBP 100 million, and I think you'll hopefully see in the 2020 results that there's a meaningful cost improvement fall-through that we're seeing in our OpEx numbers. And we expect that to come through again next year as the significant restructure that we did in 2020, those benefits largely roll into 2021. So that's one. The other area we anticipated improvements in the loss situation in CVS and CHS and commodity prices have improved. So those are kind of all known as, as they are today, upsides. With regards to the loan downsides, so the big ones there being ECO. And also, we talked about Whitegate availability and also just where we are on strike, which is likely to be a bit of a downside going into 2021. The other area that is more unknown, so whether we assume normalization of weather. It was warm in 2019. So if you have normalization of weather in 2020, that is an upside. What we don't know is what the impact of COVID will be in full. So -- and that's particularly in regards to business volume, consumption and the bad debt situation. We don't know in full what the strike impact is going to be. And the other unknown is trading performance. So that's kind of how I'll hold it, is that there's as a relatively balanced situation on the knowns and the -- on what we know on the ups and the downs, but a few kind of factors that we don't know how they're going to call out as yet.

Great. Really appreciate that. Maybe just, Chris, very shortly, this is a follow-up. But just on your points about clearing some backlog potentially by sort of Tuesday or so following the strikes over the weekend, is there a cost associated with that? Or is it sort of very efficient sort of operations that you'll sort of get back on line?

Well, I suppose it depends how we do it. If we do it with our own staff, then there's no additional cost. But there will be an impact of the strike on the bottom line this year, undoubtedly. Then we also had the second beast from the East. And so that also -- if you'll recall, we had that in 2018, and that had a bit of an impact on our results as well. So there will undoubtedly be an impact. But my focus is on moving us forward, hopefully, with a collective agreement with the one union that it's still outstanding with, and we get back to doing what we do best.

The next question comes from the line of Ahmed Farman with Jefferies.

A few from my side. I just want to ask if you could tell us the impact on the continuing EPS from the allocated cost that was removed coming from Direct Energy in 2020. And is that an additional year-on-year that -- sort of positive moving part that we should have on top of the factors that you have in Slide 15? Or is that already covered in the restructuring benefits? Then secondly, could you talk a little bit about sort of the technical pension deficit, where it stands? So it would be helpful just to understand where it stands today on a sort of mark-to-market basis. And give us a bit more specifics around the time line of the negotiations with the trustees. I guess finally, I think in the sort of the prepaid -- sort of prepared webcast, you had a comment about margin improvement in Bord Gáis Energy. I just want to see if you could give a bit more color around that. Excluding ECO costs aside, where do you see that margin in 2021? What do you see as sort of the medium-term outlook? What can you sort of achieve in the context of restructuring in a more competitive environment?

Let me try and touch on the margin improvement in British Gas, which will be more qualitative than quantitative, and then pass on to Kate for the technical pension deficit. And I'll touch on the restructuring, but Kate will give you more detail on that. So look, on the margin improvement, obviously, as we take costs out and nonproductive costs, operating costs, then you'd expect that to fall through to the margin at the bottom line. But rather than give a prediction on the margin, you can see that they're -- they've been under pressure. You know that the allowable margins from the price cap is 1.8% plus an allowance for an efficient operator. So -- but it's about 3% tops. Now we are the only company at the moment, as far as we can see, who's making a profit. So you'd forgive me if I don't tell you where I think the margin will be. But we are committed to -- there are a lot of things we can improve in that business, and we're committed to making those improvements and driving the margin higher whilst giving our customers hopefully better prices as well. On the continued impact -- or the impact on EPS and the costs with Direct Energy, it's a bit of both. You asked is that added onto the benefit that we stated or is it part of the restructuring. So it's in the numbers that Kate will talk to you about and we mentioned this morning. But it's not simply that if you take out Direct Energy, these costs fall away. So obviously, we have costs that are allocated to different parts of the group. And the bigger the group, then the smaller an allocation a business gets. So with the disposal of Direct Energy, that's taken into account in terms of the restructuring, taken out lots of bureaucracy, lots of the levels, the overhead cost. And so it doesn't just fall away. It does require work. But undoubtedly, having a simpler group makes it far easier for us to have a simpler structure running that group. So it would be within the numbers that Kate is talking about. But maybe that's the point at which I can hand you over to Kate. She can talk to you about the numbers, and then she can talk to you about the pension deficit. And Kate will be too modest, but I did the last pension and negotiation with trustees, and I actually went over the time allowed there, took a month more than what was allowed, and I'm really confident that in Kate, we've got somebody who will do it far quicker than I did that we should be too modest to tell you that.

Thanks, Chris. So just focusing on the question on the continuing EPS. When we talked to the efficiencies, we anticipated from the sale that we were at risk of having a stranding element, and we've taken action in 2020 to ensure that's not the case. So there's around about GBP 40 million that's the allocation of costs that would have before come to the Direct Energy businesses that's been allocated to the continuing businesses, and we've taken action to ensure that, that doesn't recur in 2021. So that's part of the -- in excess of GBP 100 million of efficiency costs that we talked to you as an upside. And again, for clarity, we do expect most of that upside to fall through into the British Gas businesses. Moving on to the technical deficit. I can't give you a view of what the mark-to-market would be as of today, but it's right to say that as we'd expect, all else being equal, that as the gilt rates increase, that the technical deficit starting point and kind of the music stops with regards to the technical deficit on the 31st of March. So what gilt rates are at that date will be the most important factor for how we set that technical deficit, but there are a number of other things that come into play. And it's a pretty complex sort of series of assumptions and negotiations that come into play. I'm certainly hopeful that it wont take 15 months. We started this quite early. The Chairman and the trustees and ourselves have been in conversation for some months now on the various parameters that we need to work through in anticipation of it because we're all eager to get to closure and be able to have clarity as to what the deficit is and what the funding requirements are. And I think that's pretty much it for me.

The next question comes from the line of Mark Freshney with Crédit Suisse.

Just to drill down a little bit more into the pension deficit. I mean clearly, there's a couple of ways you can approach ongoing contributions or a one-off payment using some of the Direct Energy proceeds. So perhaps you could talk about your -- whether it would be possible to do a big one-off payment to clear the whole thing. And secondly, regarding the -- on the pension deficit regarding the ability to get the deficit to self-sufficiency, i.e., where it ceases to be a problem once and for all. Is that something you think you may be able to wrap up in this round of negotiations? And I guess thirdly to that, what is the -- well, yes, those are my 2 questions.

I think that one is definitely in my court, Mark. . So with regard to the pension deficit, so, I mean, clearly, there's a number of ways that we can deal with the funding requirement as and when I know what that is. So ultimately, we need to get to an agreed technical deficit position to be able to then look at what is the right way to fund that, right, from a company perspective and from the trustee's perspective, and the Direct Energy proceeds form a part of that. I can't really give you the -- all the different things that come into play in that negotiation because that is confidential and ongoing, but there are various kind of parameters that we look to, to make sure that we get the best result possible both for the members of the teams as well as the company position. With regard to self-sufficiency, this is a young scheme, so it's probably one of the youngest schemes that's on the market. So self-efficiency is something that is arguably a where and when. However, with regard to how our asset performance is working, that's really encouraging and working very well. We've also quite well hedged. We changed the parameters of the hedge of that asset portfolio to kind of look at how we can remove some of the potential volatility to ensure that ultimately, from a Centrica perspective, the volatility of the technical deficit is well managed and under control.

The next question comes from the line of Martin Young with Investec.

Yes. I hope everybody's safe and well. Three questions, if I may. The first just gets back to the margin issue in the domestic supply business. Is your indication that there will be an improvement after the GBP 80 million jump in the ECO cost is taken into account, which means when they perhaps roll off in '22, we could be looking at a bigger jump in margins in '22? And then questions 2 and 3 relate to the future and how you intend to take advantage of the energy transition. Your sort of concluding comments in the presentation alluded to being agile and bringing forward new products. I think it's probably fair to say at this juncture you don't have much, by the way, for the domestic market that could be described as being innovative. I don't think you have a time-of-use tariff, for example. So I just wondered if you could say some more about the types of things that you intend to launch and when you intend to launch them. And then sort of allied to that, you indicated that you're looking to build the customer book. You obviously picked up Robin Hood Energy, for example, last year. Now I understand there were some sort of minor issues with the onboarding process with Robin Hood Energy. So how can we be sort of safe in the knowledge that when you pick up a customer books, you can bring these people onto the Centrica platform in an efficient way?

Martin, thanks very much for your questions. Let me take the energy transition questions, and then Kate can talk about the margin in the domestic business. But I would say that the ECO obligation -- ECO 3 finishes, I think, on the 31st of March 2022, but ECO 4 starts on the 1st of April 2022. So I think the ECO obligation is worth as a [ cub ] program we'll follow, but Kate can talk about the market supply. I mean in terms of being agile and looking to bring new products out there, I mean, I would say we have agreements with a number of the U.K. car manufacturers to install their electric vehicle charge points. We obviously have -- we're walking the talk as well in terms of the number of electric vehicles that we've ordered from Vauxhall. We did a record order last year, and then we beat our record and doubled it this year. But we've also got a new agreement, as you'll see, earlier in the year with Vauxhall whereby if you buy an electric vehicle from Vauxhall, you -- we fit a charge point for you, but we also have a tariff which gives you 30,000 free miles. So -- and time-of-use tariff really does demand to have customers to have smart meters. We have a large penetration there. So it is something that we're looking at. But you're right, at the moment, the time-of-use tariffs that we have is essentially the same as other people, which is an overnight tariffs, but the team are working on that. And our new system allows us to be far more agile. But the other thing that we've done is that even in our existing system, previously it would take us weeks to change propositions. And by simplifying the company and simplifying the decision-making process and not accepting maybe easier explanations, actually we can change our tariffs within our existing system in a matter of hours rather than in a matter of weeks. So our new energy platform is absolutely essential to be innovative, as you described, but we're also able to make improvements on the legacy system that we've got. Moving on to the customer book acquisition. So when you take on a couple of hundred thousand customers, I think that's what Robin Hood Energy had, undoubtedly you're going to have bumps, and you'll hear from the people that it didn't go well. But I would say that the -- and the performance of that onboarding exceeded all of our expectations. So we onboarded and retained more customers with -- from Robin Hood Energy than we had actually expected to. And recently, in -- early this year, we took over the customers of Simplicity Energy through the supplier of last resort process run by Ofgem because Simplicity went out of business. That onboarding has gone incredibly smoothly. The characteristics of some of the Robin Hood customers meant that they actually went on to our legacy system because one of the things that we're looking to do is to make sure that we -- an agile way of working is to test and learn and make sure that the new system works properly, and the assessment was that we weren't ready to take on that large volume of customers from Robin Hood. But the Simplicity book went right onto our new system, and it's gone incredibly well. And so we are making progress there. It does take time, and we can always be more innovative. But we also have to be a bit more front foot in our marketing. We buy more green energy than any other supplier in the U.K., but you wouldn't think that if you looked at the marketing. We need to get smarter on that, and that's something that the team are looking at, at the moment. But some of the other suppliers that look very green are not as green as they might look. They tend to buy certificates rather than buy energy, but we buy 11 gigawatts of renewable energy every year. So there is certainly more that we can do on that. But maybe I could pass you on to Kate, who can talk about the comment on margin improvement and whether that does include the ECO -- increase in ECO costs in 2021.

Yes. And I think it may be helpful just for me to explain a little bit what happens with ECO. So technically, because it's tied to the license, the accounting rules require us to cash-account for ECO. This is why you have this phasing dynamic which is closely tied to cash you actually spend. So that's why we have an acceleration of spend in 2021 relative to '22 -- to 2020 and 2019. When we get to 2022, we've got 1 more quarter of ECO 3, and then we have a new regime and new pricing dynamic starting on the 1st of April. It's definitely our strong preference to phase the spend more evenly through ECO 4, which will allow these trucking margins as a result.

Okay. But in terms of 2021, if the margin in British Gas domestic retail goes up, that is after taking into account the GBP 80 million jump in the ECO, in the [indiscernible] side?

Yes.

The next question comes from the line of Ajay Patel with Goldman Sachs.

Okay, a few questions here from my side. I found the -- your Slide 11 really interesting, and I just wondered if you could -- maybe Kate could walk through a couple of points. The main one here is that at the moment, you haven't incurred a cash -- additional cash amount for an increase in bad debt charges, but you made a provision for it. So I'm just wondering, if we think about this year, if -- what are your assumptions? Or how are you thinking about the bad debt charge to put through? As in it sounds like you're a bit ahead of yourself already. Do you go back to historical norms? Or do you continue to provide for that sort of double run rate or what I think you said were the first year after the financial crisis sort of levels even into this year? Because it's a sizable component of the cost that was borne in H2. And then on Business Solutions and Home Solutions, these businesses were sizably loss-making and have been for a while. But I'm just thinking, when you talk about the GBP 100 million of cost reduction, does that include the costs that would come down as these businesses move towards being breakeven? And then I just thought maybe one for Chris. The low-cost software that you're introducing in the supply business and the 36,000 customers that you've migrated over, what is the end intention here? Is it to move a -- several categories of supply of customers over onto that over time? Just a little bit more from that. I know maybe a bit early stage, but it'd be really helpful. And then I was just thinking on the cost per head chart that you put there. I imagine some of the mitigations this year were one-off, right? Some solar arrangements, for example, or bonus has been halved. What would that cost per head look like if you strip those out just to kind of get a better understanding on what maybe the underlying performance there is?

Ajay, thanks very much. Let me take the last 2, so the low-cost software and the cost per head, and then I'll let Kate take the first 2 that you asked. On the low-cost software, so the -- what we've got is a legacy SAP system, which is a very good system but is not fit for the future. And systems now -- I'm quite allergic -- because I've been very open to it in the past, I'm quite allergic to the idea of a big bang system implementation. I've yet to see one that goes really well, and I've yet to meet someone that -- seen one that goes really well. And how I think the markets move or how we are definitely moving is that we have spent the past bulk of last year testing our new software. It's not one but -- software, it's testing different parts to help us run the back office for energy but also help us to have a good customer interface. We've spent some time testing that, which is why we've got these customers on this platform. And we had also -- I mean, we've previously tested the software on the small and medium enterprise market in what was UKB. So we've got a couple of years' experience of running this, and we're confident actually that this can do what we want it to do. Now there are a number of different types of software. So we're not just looking at one type, but we're confident that we can see a path to migrating our entire customer base from the legacy SAP system to a new system. Now obviously, we want to take our time to do that. We will do that in the coming years, and that's about as precise as I would be at the moment. But the intention is that this is how we'll operate our energy business going forward. It's not, however, just because the costs are competitive, it's a completely different way of working. And so it's something that's organized around satisfying the customer and dealing with the customer queries when they call in rather than the system we've got today, which is to deal with specific historical legacy industry processes. So one of the big things about the -- what we learned from looking at some of these challenges that have come in is it's not just about the system, it's actually about how you work. It's the way of working. So I'm quite enthusiastic about that. But we will obviously be cautious because the last thing you want to do is to detrimentally impact the customer experience. On the cost per head. So in terms of the bonus change, that is a part of it, but it's quite a bit below half of the change in cost per head. On the furlough, I suppose the way I think about that is that we did actually incur additional costs in terms of extra overtime costs and in terms of what I mentioned earlier on, there's about GBP 7 million in cost to the customers where we didn't fulfill their annual service visits. So the total furlough money we took from the government was GBP 27 million. We topped that up and paid GBP 35 million to those mainly engineers that were furloughed. But I don't see that as a one-off. That helped to compensate for the costs that we incurred to keep those jobs open because we still had to do the work. So the reason I wanted to share the chart on the cost per headcount is I think it is really, really important that we realize that what we've done now is to take out management layers in the organization, take out more expensive people that were maybe more focused on running the company rather than on giving a good customer experience. And that's something that we -- it's a measure that I use a lot when I look at companies. It's something that I want to continue. The cost, if you see headcount coming down but the wage bill going up, that tells you that you're taking out frontline staff. And that's not often the way to improve customer service. And that's what's different about what we're doing at the moment. It's actually all about making sure that we only have the overhead which is required to run this business. And you should see that in our reducing average cost per employee. So with that, I'll pass you on to Kate to talk through Slide 11 and then your question on the cost savings in Business and Home Solutions.

Thank you. So looking specifically on bad debt, and I think, Ajay, your question was when we got our assumption on the cash impact of it and how do we evolve bad debt going into 2021. So a bit context may be helpful. So the big kind of dynamics around 2020 were from a collections perspective, we weren't able to follow through collections in all areas because of the restrictions that we had that we were able to before. And particularly in the small and medium enterprise segment, we are seeing an increase in aged debt in that area. And when you look at the increase in bad debt provision that we've put in, it's fairly evenly split between the -- more geared then to the B2B part of the supply business and the energy part and the residential energy part of the supply business. What we don't know as of the end of December is what the extent of the economic impact is going to be on our customers and when they, therefore, are sort of going to feel the extent of that impact. And that's what created the significant uncertainty. So what we did was we went back to 2009. We looked at what kind of increases in provision rates we saw then. As we had used that as a proxy. We've kind of pitched what unemployment assumptions we have versus some of the banking stuff that was released a little short while ago. We're in the kind of in the range of what they were talking about. And that's what we had used to assess what the bad debt requirement could be for those balances as of the end of December. So we had a look forward into 2021. The way I think about it is we may be over or underprovided for those December results. That impact may hit us earlier and be more excessive than we thought. It could also be later and could be this impact of that than we thought. So -- and that will then allow us to kind of true-up what the right provision rate would be. And we'll know that in relatively short order through this year given the cash production cycle that we have. And...

Okay. And then in Home Solutions, sorry?

Yes. So just moving on to the other question with regards to efficiency costs in Home Solutions and the like. So we are expecting an improvement in CBS and CHS in terms of their performance year-on-year. That will be a combination of efficiencies but also gross margin improvement and, particularly in Centrica Home Solutions, a significant reduction in depreciation. So it's by no means all an improvement in efficiency. There's a element of it. But when I look at the GBP 100 million of -- in excess of GBP 100 million efficiencies that we're calling out in 2021, I do expect the vast majority of that to fall into British Gas. Some elements will be in Home Solutions, but by no means that's significant relative to the services and energy stack.

And if you could just indulge me just on one thing. This is for Chris. You've got a huge benefit happening on the pension deficit side. You have now the ability to pay down some debts. It's clear that your free cash flow is going to sizably improve over the coming years once these effects start to hit through. What are your strategic priorities at the moment? Is it to establish the -- yourself as an energy and services company and that may involve utilizing some of the capital for growth in the future or focus on -- around the dividend and shareholder remuneration? Just trying to understand how you're at least, I know, a bit early going into your strategies in the second half of the year, but just the sort of early sort of thoughts around that would be really helpful.

Yes. So, I mean, on that, Ajay, I think that I wouldn't want to be drawn on what we'll see in the second half of the year because obviously, strategy is something that we will agree as a Board. What I would say is that it was not an easy decision for us as a Board to cancel the dividend last year. And for us to not pay a dividend for 2020, it does not make for a good shareholder experience. We are absolutely focused on restoring shareholder value. It's not been a pleasant experience to own Centrica shares for a number of years, and we want to change that. But we want to make sure that we have -- will come out of the COVID situation. So we see more clarity there. We've progressed further with the reshaping of the balance sheet, and Kate's talking about pensions, et cetera. So we want to see a bit more there. And we also want to be able to demonstrate that we can see line of sight not only to stabilize but to ultimately grow this business. But it is absolutely a topic of conversation in terms of the shareholder returns that I have regularly with our Chairman, who's here. And if Scott wants to add something to this, I'd love for him to comment. And Scott should be in the call with us. But it is something that we are laser-like focused on. And so rest assured we want to restart it as soon as we can, but I'll ask Scott to add something on dividend.

Thanks. Scott here. I realize that it is frustrating that we can't say more at this point. And I think, to be honest, Chris has described all the moving parts that we have under consideration. The only thing that I would add is that along with owning Centrica stock not being a good experience over the last few years, ours -- our team's analysis is that occasionally, we've in the past been guilty of overpromising and then underdelivering. So we are -- you'll notice that our tone of voice is very deliberately and unapologetically cautious and prudent in this point. Now we know just how important the dividend is to our shareholders. So just as soon as we do feel that we've crossed the threshold of being able to describe confidently what the future trajectory looks like, we will share it. We're not being callous in that nature. But at the moment, we just think it's prudent to stay where we are, and we'll have more to say later in the year.

The next question comes from the line of Jenny Ping with Citi.