United Utilities Group PLC (UU) Earnings Call Transcript & Summary

Right. Good morning, everyone. We've got, in the room with us, a large number of the executive. You'll see a number of the executives presenting, and I'll talk through that and the agenda a little bit later. But we've also got other members, wastewater, water, retail, in terms of debt collection, billing, et cetera. So a mixed community that I hope during the break time, you get opportunity to meet. And if we got Q&A that stump any of us on stage, then we've got people to refer to out in the audience as we go. The timing for this is very appropriate. I think having now accepted our final determination, what we are planning to do during this period. And if you can hang in with us, what we're looking to do is to give you a very rich overview of what AMP7 means for us, what our individual plans are. So you'll see a lot around our ODIs. You'll see a lot around Innovation and Systems Thinking, where that's going to apply during AMP7. And also a lot around what we're doing in the retail space. And then as you might expect, Russ and I will give you, if you like, a heads-up of some of the overview pieces for the end of AMP6 and AMP7. If you can hang through, I hope you'll enjoy what you see. I hope it will give you a better view of where we are, what we've done in bridging from AMP6 to AMP7 and where our firm plans are. But I think before we started, what I wanted to do was just to pick up on a topic that I think you're increasingly hearing around business in general, particularly in the U.K., but I think very much around the utilities and very focused around water is the subject of purpose. And I think it's an issue for us, which I think, to an extent, there's been an element of why are we talking about this. For us, this is obvious. This is something that we believe that we've been doing for over 20 years in being what essentially is a public service company that is very, very focused on the customer, the environment and a number of other stakeholders that we influence. And if you look back something like 10 years, you'll recognize that we set out a series of strategic themes around very much focusing on best service to customers, being able to do so at the lowest sustainable cost, and sustainable in that context means for us being in a position to invest, but invest for the long term. We are very much a long-term industry, what we do today will be living within the next 20, 30, sometimes 40, 50 years. And then to do that in a responsible manner in the way that we interact with society, both from an environmental perspective, but also in terms of the communities within which we operate. So those themes have been around now stated themes for around 10 years. You see them in every annual report, and you'll see them as sitting behind everything we do. And I think one of the things that we benefit from is that continuity and stability of that approach. I think having a clear purpose, having a clear set of objectives and sticking to those with a management team that is almost boring in the way that they focus on those issues, I think, is a formula in my experience for success, and we've seen that really over the last 10 years. Increasingly, actually, when you look back over the last 20 years in terms of things that we've been doing. And I think for us, ESG, or environment, social and governance, is, as I say, something that when you look back to 2000, we were a company of the year with business in the community. We established director-level focus on responsible business, which eventually evolves into your corporate social responsibility or corporate responsibility board. And I think what you'll find is this is the way, this is in the DNA of the business over that period. We don't think necessarily that we want to change the articles of association. We think that 172 is sufficient for a listed business in terms of the scope of duties that it puts on the Board of a company. We're not really pushing for license changes. This is something that is so clear as far as the company is concerned, it is in its DNA or it's not, it's part of the way you run a company and lead that we think the things that we do, we very much say what the purpose of this company is and how we evidence that through action. You can see there over that period, a whole series of very tangible, often externally driven measures of the company. And one of -- the ones that I particularly like is, by the -- when we got to 2020, we're now able to say that we're amongst the top 20 places to work in the country. That's not measured by us. It's not something that we do. It's actually stated by our employees who work with the business and employees who've left the business, who when canvassed, would tell you what it's like to work in United Utilities. So I think the other dimension to that is that both from an environmental perspective, you'll hear a lot about how do we help with climate change, how do we slow down flow of water, planting trees, contribution to the environment over 2 million over that period. But the other component in terms of that responsible agenda is the degree to which we voluntarily reinvested outperformance, something like over GBP 600 million over the last 10 years with a very significant additional community investment in the things that we do. So again, very much DNA, very much about who we are as a business. And we'll just continue to build that and actually build on that pedigree as we go forward over the next years. It's part of being a monopoly water company we believe in the way that you should operate responsibly. I think just touching on AMP6 to AMP7 and that transition and really talking about some of the things that we believe have been formulary for success. Certainly, we accelerated investment in AMP6, you know that. So that in the first 3 years of AMP6, we accelerated our capital investment, in particular, well in advance of our business plan, in order to be able to capture the early benefits of that investment, particularly on our wastewater program, but also in our water business. That has facilitated the delivery of outperformance, both in terms of totex against our core scope for AMP6, and -- but also in ODIs. And when we get to full year, we'll be able to talk about the full impact of ODIs over the AMP6 period. We've shared that outperformance, as I've said, GBP 600 million over the period of both AMP5 and AMP6. And I think we're really pleased, as a consequence of the business plan that we submitted that was fast tracked, that we were able to then sustain the AMP6 dividend with CPI growth throughout AMP7. So again, one of our objectives. It was a very clearly stated objective as far as our investors were concerned, and we're pleased that we're planning on delivering that as we go through AMP7. And we think that what we've done is we've gone through AMP6 and its predecessor AMP5, is we've effectively established both a culture of innovation, strong culture of innovation within the business of continuous improvement. But also a very strong bench strength amongst the team with the right culture that we need for AMP7, very much focused on how we can outperform our FD, both deliver and outperform the FD. So I think for us, the strategy of AMP6 and the way that we approached AMP7 paid off in all the things that we were doing. If you look at the final determination that we accepted just a couple of weeks ago, you'll see that as far as the final determination that we got, you can see a very much largely symmetrical opportunity represented by the ODIs in terms of percentage of RORE. Figures are up there on the chart for you. The package overall delivers 13.8% real reduction in average bills. So what you see, as far as customers are concerned, they'll see a largely flat bill coming through an average level across the 5-year period. We've got a GBP 5.8 billion totex allowance, that's lower than AMP6, principally because we have a smaller wastewater program and also what you'll see, and James will talk about this later on, a fairly significant component of CapEx is now part of a direct procurement arrangement. And James will talk you through the program for that, and how we expect that to play out. We've got still a fairly significant environmental program, delivering through the national environment program. And then we've got a series of targets for reduction. You'll see most of those when Jo Harrison takes you through those later on. But just headlines, 20% reduction in pollution incidents, part of a national drive by the environment agency to reduce pollution incidents across the country, which have seen an increasing trend in many companies over the last couple of years. And then the 20% reduction in leakage that we offered was reduced to 15% by Ofwat in the final determination. So 15% is the clear target, anything beyond that is essentially in reward territory. I won't steal James' thunder, but probably the most critical program from us in terms of risk mitigation for the long term is the Haweswater Aqueduct program. You often heard it referred to as the Manchester and Pennines program. And we've already started on that as James will show you where we are in terms of that early work that we've done. And then I've mentioned UU dividend as a consequence of that with the CPIH growth. So I think for us, our strategy in approaching PR19 was very clear in terms of what we were going to do around price, what we're going to do around service, what we're going to do around customers, particularly those in deprivation and those who effectively are priority, what we call priority service. And that's played out effectively through the final determination and will take us into AMP7. And the benefit that we had, if there is a benefit because it's very different in terms of fast track in PR19 as compared to PR14. The expectation at PR19 was that you put -- you submitted your plan, there may well have been some adjustments at the initial assessment phase, and then it was largely left alone, that didn't happen for any of the fast track companies this time it did at PR14. But notwithstanding that, notwithstanding the interventions and the discussions that we had as we went through the period from initial assessment, draft determination and then through to final, we got an outcome, which allows us a reasonable set of targets tough, but targets that we think are largely achievable. The agenda, I'll quickly touch on totex, which you probably know more than a reminder of something you've seen before. James, who effectively heads up strategy and regulation, and his team are currently in addition to now turning their attention to PR24 because this is just a hamster wheel effectively that we are on has also got a team looking at 2 fundamental aspects of the future shape of the business. One is the Haweswater Aqueduct program. The other one is the potential transfer scheme, what we call the 7, 10 transfer, which essentially is the opportunity to move water down the 7 into the 10 for supply of water. And James's team are looking at those 2 aspects of the future business as well as part of that overall strategic approach to resilience across the country. Russ will give you a heads-up on finance. And as you would expect to see, at some point, pensions might feature in that discussion. And then we've got Jo, who essentially deals with our environmental and asset strategy, looking at the primary relationship with the environment agency in terms of the strategic focus going forward but also looking at asset performance. Jo is going to take you through all of the ODIs that we have. Where are they? What do they actually involve? Where are we performing today? What are the targets? So you can get a sense of where the risk and opportunity lies in our ODIs. And then Simon, who you've seen before, is going to pick up on our digital services and our Innovation and Systems Thinking. So what we've done, which is, I think, a trend that you'll begin to see in asset-based organizations is if we brought together both our operational technology and our information technology. And you'll find that some of the forward-thinking businesses around the world are doing that, where you've got very asset-intense businesses, where you're now seeing a fusion between those 2 technology services in terms of the way that you collect data and the way you use that data for the purposes of optimizing performance. So we've made that move, what, about a year ago, Simon? In terms of integrating those 2 teams. And that is -- sits behind, it's one of the engine rooms that sits behind Systems Thinking and the way that we go about use of innovation, so more on that later. We saved Lou till last, force of nature, keeps everybody awake in the afternoon. Lou effectively is customer and people director, and she'll give you a heads-up on what we plan to do during AMP7 in the customer space. But also some of the issues that we've got from a people perspective and what we're doing in terms of having the right skills mix in the organization for the future. So that's the plan, effectively, as you can see, they're broken up into lunch, coffee and then an afternoon session. I really do hope that you've got the time to stay with us and just hang in there and see everything that we're doing as we run into AMP7. So just quickly looking at the totex allowance. What you can see there, as I mentioned before, from draft determination to final determination, we got about GBP 234 million net of higher allowance. And one of the things that characterize that, if you remember, was that what we did do was we moved -- we proposed to Ofwat, some time ago, the opportunity to accelerate transition to CPIH, which effectively brought revenue forward in the AMP. That allowed us basically for it to have a softer transition into AMP7. It's something we put forward in parallel with our business plan. But it was something that in draft to final Ofwat accepted. And I think there are probably 2 companies that have done something similar. Us and Severn Trent have both effectively opted to accelerate the CPIH earlier, effectively, bringing revenue forward. What you'll see there is that for outperformance, underperformance, we've got roughly a 50-50 customer share ratio. You'll find that companies who were not fast-tracked, who've had a rougher time through that final determination have got a less preferential customer sharing arrangement, it's one of the advantages of fast track in terms of getting that early sharing. Pay-as-you-go is really very much aligned to the natural rate at just under 60%. James will talk about HARP, as I say. But within our program, we have an allowance of GBP 57 million, which allows us essentially to do the early definition, design work, things like ground surveys, et cetera. So it's the cost that we incur in essentially getting the HARP program up and running. Thereafter, the cost that contractors would do would essentially go through direct procurement arrangement. The other element that I mentioned was the strategic water resource development, which is something we've very much been a driver of in looking at the potential to transfer water South. We have around GBP 44 million in working in conjunction with Severn Trent and Thames in prosecuting that. We also, around that, created what's called Water Resources West, which is an assembly of companies that essentially sit on the western side of the country, who are potential beneficiaries of sharing arrangement, and that includes a formal relationship with the Welsh Government and Welsh water. Because quite a significant amount of water used in the West comes from Welsh sources, so we need to get involved. Why are we doing that? Clearly, when you look at Northern customers, you often find Northerners say, why would I give water to those buggers in the South. That was a terrible Northern accent. I normally do it better. I'm just a bit nervous at the moment. But essentially, one little old lady said in the AGM, why would I -- why do we want our water to go to those Londoners? For me, this is a bit of strategic play. It makes the North relevant to the South. If we become a dependency for water, if you look at the fact that where you live, you're running out of water at great rate of knots if you live in the South of England. If the North is a potential donor, then Northern water sources become very important. So for me, strategically, in a long-term play, this makes the West of the country and the North relevant, not just for votes, but for something perhaps a little bit more vital than that, but in terms of water. So actually, longer term, when you start looking at the impact of climate change and inevitably we'll run out of water at some point, Northern water resources are going to become important in the context of the country as a whole. So for me, this is a long-term strategic play and why we put so much energy into it. And I think when you look at AMP6 into AMP7, this is a slide we've showed you before, I think, at half and full year previously. We've done a lot of work to get what effectively is our OpEx and IRE down to a level that as we exit AMP6 and we look at the average across AMP7, you can see that what we've essentially done is we've contained cost growth and large elements of the Q program, actually, the quality program, which is, in other words, the environmental program to drive power, they drive resources, they drive chemicals. So what we've been doing is containing the cost growth within the organization in order to ensure that effectively, we have a run rate coming out of AMP6 into AMP7, which means that our expenditure is not the thing that's under pressure. What we've really got to do. The real challenge for a company like us is less about individual cost reduction, save a few blue-collar heads. What you'll do is save a few thousand or a few hundred thousand pounds. But if you can drive the performance out of that team, you will save millions in fines and you'll earn millions through ODIs. So the real drivers here for a water company like us, in an environment where none of us are adequately resourced with the amounts of money that we have is about how you manage risk and how you drive performance out of your asset base in a resource-constrained environment. And essentially, what we've been doing is we have been containing cost. We've lost about 400 people over the last 12 months, mostly senior managers at the higher cost end of our labor force. But the real issue here is about risk management and opportunity optimization and risk mitigation in terms of fines and penalties. And we're already delivering efficiencies. As I said, getting into fast track status gave us the confidence to be able to really focus on the things that will make a difference as we go into AMP7. I think you'll know from our fast track award from Ofwat. We're seen as having the most embedded culture of innovation within the business. And if you look across the sector, you'll see a very targeted, a very focused approach to innovation, not just in innovation and development but in exploitation. Simon will talk to you about systems thinking. We wanted to give you some sense of external benchmarking, you'll see that later on. And the Innovation Lab for us is a source of global ideas, which fits us at the frontier. Interestingly, Ofwat is now looking at establishing an innovation forum on a sector-wide basis, where the sort of ideas that we've been using in Innovation Lab will help, but they're looking for industry to do that together. So we've got the Innovation Lab, we're working with Severn Trent on the worldwide innovation fund, but we're going to look to do stuff on a sectoral basis. And we could see more developing on that idea as we go through this year into next. We used market testing extensively in establishing our AMP7 strategy. How do we procure as efficiently as possible and essentially, looking at everything we do and understanding whether there was a better option, a better cost option about for the approach. We've appointed this time -- we had 4 on AMP6. This time, we've appointed 2 capital delivery partners, so we've trimmed it back. And essentially, we've already committed over GBP 300 million of our capital program before we get to the beginning of AMP7, and we saw ourselves delivering about GBP 40 million of savings through the approach that we've taken as a consequence of market testing and the way that we integrate with the partners compared to our traditional delivery routes. And then we've got cost challenge. We've got risk and value, which is an approach to how we engineer solutions, it's delivering about GBP 100 million savings on our plan. And then we've got program scope where we've worked with the environment agency to effectively deliver environmental schemes more efficiently, which may be that you don't do a scheme at all, but you look more a natural capital approach and look at how we work an integrated catchment level. And I have to say that the strategy part of Jo's title reflects the fact that we are, as a company, have been leading right the way back since 2010 before -- even before that, with the SCAMP approach, which was the way we looked at catchment management for the purposes of managing the water catchment area. We've expanded that, and we're now working on a number of pilots with the environment agency, which will expand very significantly as we go into AMP7. So I think when you look at the strategy that we've been following, starting AMP5, reinforcing AMP6 and takes us in. I think, firstly, a relentless focus on customers. These are the people that pay our salaries. These are the people that pay the bill. We've delivered outperformance, and we've done that through down to hard work but also embedding innovation in the things that we do. You'll see from what Russ says. We think we've got the strongest balance sheet in the sector by Welsh when you look at -- and a very, very different company in that sense. And we achieved fast track status, our target for AMP6. And I think what we're seeing in AMP7 is, yes, we do have stretching service targets. But as you'll see later on, we're well prepared in those and have a track record of outperforming on our ODIs. And we're confident of the efficiencies that we've got baked into our plan in terms of delivering our cost challenge. So I think in the summary, we believe that the approach we're delivering does deliver best service to customers. We are investing sustainably, and we're doing it responsibly.

Thank you, Steve. Good morning, everybody. I've been asked to say a little bit this morning about a project that you'll be hearing quite a lot about during AMP7, which is our program on the Haweswater Aqueduct. As you can see, Haweswater Aqueduct really is the spine of our drinking water system in the Northwest. It's the largest potable water delivery system. It's a series of pipes and tunnels that in places are up to 2.6 meters wide and they come around 111 -- sorry, 110 kilometers in length from north to south. You can get a lot of water through that sort of tunnel. There's delivery of around 570 million liters of water every day to 2.5 million people. And there are around 18 offtakes as you go along from north to south and as well as supplying people in the Pennines area, it's a key source of supply for Manchester. Just to help you sort of imagine the scale of what we're talking about of this asset. If you put water in at the top of the asset and allow it to travel through, it will take around 36 hours for that water to get from the top to the bottom, all under the force of gravity. So that's around 16 tonnes of water carried by gravity every minute. If you had a very large -- it would have to be a very large tap at the bottom of the pipe system, you'd be able to fill 1 Olympic swimming pool every 6 minutes. So as you can see, it is a key asset for the resilience of our suppliers. And as this video, I'm going to show you, will show, it's also a very important part of our history. [Presentation]

So as you can see there, the construction of the Haweswater Aqueduct largely took place between 1919 and 1955. That was a period with considerable shortages in terms of materials and skills during the sort of interval period. And you can also see there's probably a bit of a shortage of health and safety equipment as well at that time. In order to examine the condition of this aqueduct that we had to construct the West East Link Main that was constructed in 2012. And what that allowed us to do is to isolate the aqueduct for inspection and for repair. In order to close the aqueduct down and put in place an outage, the outages have to be limited to a 4-week period during a period of low demand, and they require 42 treatment works to run at full capacity in order to make up for that supply. That's allowed us to do 2 internal inspections so far, they were internal inspections in 2013 and in 2016, and they allowed us to assess the condition of the aqueduct. And those outages showed 2 principal risks: one to water quality and one in terms of interruption of supplies. So what do we do? Well, we prioritized the highest risk that was a section of the aqueduct called the Hallbank section. We started work on replacing that in 2019, and we are on track to complete that work later this year. We then assessed the options to secure resilience across the rest of the system. There are over 300 different options that we considered, and we engaged with over 2,300 households and nonhousehold customers to understand their views about the best approach. This was all incorporated in our business plan submission back in 2018. Since then, we've also tested potential options with 59 companies through a market engagement process, and we believe that replacement tunnels are now identified as the most suitable option. So that's where we come to the Haweswater Aqueduct Resilience Programme, or HARP. This will be the first major project in the sector to be subject to a direct procurement for customers approach. As such, it's a pathfinder project for Ofwat. It's also a pathfinder project for the industry, and we are confident that it will allow us to secure resilience for UU's customers. In the price review, we've been given a GBP 57 million initial allowance that will enable procurement and planning activity. And then construction and financing of the solution will be subject to a competitive tender process. The estimated contract value of GBP 750 million was included in the submitted business plan, but obviously, the final value will be determined by the detailed design and by the results of the tender process. Water is nothing really, if it's not a long-term business. You can see that it's taken us around 10 years of activity to get to this point, and it will be a further 10 years before we've got completion of the replacement assets. So in 2018, we put forward proposals in our business plan. We're now working on the tender arrangements, and we expect to issue a tender in 2021. We expect to award the contract in 2022 and see construction start and then by 2029, we believe that replacement tunnels will be in operation probably under an initial contract of around 25 years. Obviously, we're very excited about this project. It's a new way of delivering these kind of assets. It involves a lot of close work with Ofwat. And of course, it's going to be a major contribution to ensuring the resilience of our services to customers across the Northwest. So thank you very much, and I will hand over to Russ.

Thanks, James. I will come as no surprise to you that I'm going to say a word or 2 about pensions. And the reason why I've elevated it to the front slot today is that many people in the room will be aware that -- of the efficient market's hypothesis, which says that when information is in the market, the market would react to it very quickly. It's 2 years since I first started talking about a big value gap on pensions and the market still hasn't fully reacted. So I put it as my first slide. It's a repeat slide that you've seen before, but I'll remind you what it says. The numbers here in the circles, these are where the analysts are in terms of their analysis of the position. The full normalized IFRS adjustments is worth 132p per share. No adjustments is worth nothing. In terms of the comparison with our closest comparator, that's an economic value gap of about GBP 1 billion on a company with a market cap of about GBP 5 billion. This is a pretty significant issue for the market, not yet to fully reflect. But I will be watching these numbers on the left-hand side, and I'll be letting you know how we progress over the years ahead, I used to think it will be months, but it might be the years ahead. Probably my successor will have to continue the theme. Now the latest position on our best-in-class pensions position at last -- full year-end, which is when you can do the normalization, because based on the half year numbers, which were better than this, you don't have the assumptions from all the companies to do the normalization. But prenormalization, we had GBP 484 million of surplus, and you can see the range of positions across the rest of the industry. We've also -- just to remind you of our philosophy on this, which I think is the way to look at it, that IFRS is the only thing on which you can do a full normalization because you have the assumption set, and that's why we've recommended that to get the economic value gap. The funding deficits, we believe, although a number of you are relying on them, are irrelevant for economic value, simply because they are only a stepping stone. After you've dealt with one funding deficit, if you're not in a self-sufficient pension position, you will have a subsequent funding deficit and a subsequent funding deficit. So funding deficits are irrelevant because they are stepping stones. The thing you'd really like to know is self-sufficiency, but that's not yet published. It's still in sort of consultation phase, really from the pensions regulator point of view. We have disclosed that we are, we believe, the only water company and probably the only company with the philosophy to be fully self-sufficient, which means that pensioners and employees are not in any significant way reliant upon the company. We think that puts us in a great position. It means we have a very responsible approach for the benefit of all of our stakeholders. So now I'd like to get on to a second topic, which I haven't been into in this amount of detail before. And I think it's an important one going forward because we are not today giving you any forward guidance on anything. This is an education session. It's something you can see where the benefits of the company come from, both operationally, from a customer point of view and financially. So financially, I've told you, well, there's about GBP 1 billion of value gap on pensions. And the other big thing is what we can do on financing outperformance. You can see we've got a great track record of financing outperformance. We've made over GBP 500 million financing outperformance in AMP5. Over GBP 500 million of that financing outperformance in AMP6. This has underpinned our ability to reinvest over GBP 600 million for the benefit of customers in the environment over the last 2 AMPs. So you can see it's a very material number for us. We've also set up financing arrangements in such a way that we are robust through financial crisis. We weathered the last global financial crisis very well because of the financing policies we have and we're well placed to cope with any future financial crises that could occur. And that's why we have the credit rating policies that we have, and that's why we have the debt to RCV policy that we have. It's also enabled us to maintain the dividend for 3 consecutive AMPs. So this is clearly a pretty important area for us to have on the table before we get into the detail of the operational performance and performance with the customers. Now what I'm just trying to get across here is that this is not a fluke that we've made over GBP 500 million financing outperformance for the last 2 AMPs. And I am confident that we'll continue to make financing outperformance in the AMP ahead. Now why am I confident? And this is the bit that's probably a little bit news to some of you. Because I think a lot of you get that we probably have the best treasury in the sector. But possibly what you don't all get is why is it the best? What is it that makes us a bit different? So I'm going to give you a little bit of that today. But before I do, I'll just show you the profile of our debt. And what this chart shows is, as you know, we have a policy whereby we have roughly half of our debt fixed in nominal terms and roughly half of it in RPI terms. So the green bars show the RPI-linked debt. The light green shows the CPI-linked debt as they stand today, adjusted for future maturities. And the blackish or dark blue color there is the proportion of our debt, which is fixed and the light blue is the proportion that's floating. So as the maturities wind down, this blue represents a combination of what is currently floating and what will be refinanced in the future. So we've got the rates on there, and you can see that we already have locked in some financing outperformance if you compare those with the rates that are in the final determination. So why do I think that we will continue to perform well? Well, this is the final determination rate works off of the iBoxx. It's the average of the iBoxx on A-rated debt and on BBB minus 15 bps. So this sort of black line here, or is it dark green, is really the index that's Ofwat is going to be working on. The gray shaded area shows the difference between the A minus 15 bps and the BBB minus 15 bps. And the range of the gray is normally about 27 bps. So you can see that's the index we've got to beat. And if you look at the blue markers, those are what we have done over the last few years for all of our bond issues. So we've beaten the index on every single bond issue and sometimes quite markedly. So the question is, how do we do that? Why am I confident that we'll keep on doing that? And there's really 3 factors. One is that we are very flexible in our choice of maturities. The second is that we are very fleet of foot as a treasury team, evaluating relative value. And the third is our credit rating policy. So let's look at our credit rating policy as the first point. We've always said that we want to be A3 stable with Moody's. That's where we are. And we are the best -- equal best-rated company from a sector point of view, in the water sector. So simply by having that policy, we're going to outperform the index. But it's not just about that policy. It's also about our treasury excellence. And what I'm going to do is to pull that out with a couple of examples, one in the private placement market, and one in the public bond market. So you can actually see what we do and why it gives me confidence that we have a repeatable formula here. So when we go to the private placement market, we set a target of beating the public bond market by 20 bps. So we will never get to private placement market if we do better with public bonds. So initially, they've already got a relative value point. We will often be accessing small pockets of debt -- small pockets of demand. So you see numbers of GBP 30 million, GBP 40 million, GBP 50 million sort of deal size. We'll be monitoring multiple currencies and maturities to get the best relative value. And because the Board has delegated to me the authority to execute effectively in almost any market, in any maturity, in any amount provided to meet the sort of roughly GBP 700 million that we raise every year, then we can move extremely quickly, and that's what we do. We post levels. Banks respond to those levels. We choose a bank, and then we take advantage of it. And here is a recent one that we did, the first GBP 2 million, as I said, that sort of size when you're accessing small pockets of demand with a coupon of 0.359% in CPI-linked forms, that's again getting to all of that policy of moving from RPI to CPI a little bit on a 31-year term. Now that could have been a 5-year term, if that had been a better market to go for at that point in time. It could have been a 10-year term. But we are very, very flexible to the most economic and best growth value in the market at any point in time. Similarly, in the public market, we weren't doing public bond issues for the sort of first 5 or 6 years, I think, that I was doing this job simply because we could get better value from EIB and other sources. But the public bond market is now looking good relative value. The ERB has evaporated. So we're now into public and private placements. Again, we have got the same approach of best relative value. We're looking across different currencies, we're looking across different maturities. We choose best relative value. We move very quickly. And this example is an example where we've raised GBP 250 million recently in the public bond market with 1.75% fixed nominal, which, of course, is a very significant outperformance against the index when you allow for inflation of sort of 2% CPI, 3% RPI. And it's got an 18-year term. Again, it could have been a 5-year term, it could have been a 15-year term. But we found the spot that was the best relative value. So that's the sort of approach we take. We've got a very good treasury team, full of qualified treasurers. And I'm a qualified treasurer, my success as a qualified treasurer, and that will continue. It's a systematic, methodical approach to outperformance that has delivered over GBP 500 million for the last 2 AMPs, and we'll continue to deliver outperformance over the AMP to come. So in summary, we've got the best-in-class approach to pensions, giving an economic value gap of around GBP 1 billion. We've got best-in-class treasury policies, giving financing outperformance on a regular basis with a track record and with an expectation of more to come. That will deliver future cost savings, which will enable us to continue if we wish to reinvest for the benefit of customers and the environment, and it will enable us to continue to support our dividend policies. So with that, I'll open it up for Steve to take us through questions, I think, next, is that right?

I think we're going to take question and answers to myself and Jo at the end of this section, so we can pick up any question on the ODIs then. And I think the purpose of my section really is to build a little bit what you heard from Jo there about having a plan in place around with delivery, again, some innovative, challenging and potential new ODIs for us. And so what I thought I'd do with this section, probably something we'd announce elsewhere at the Capital Markets Days is, kind of get you a bit of sneak peek behind the scenes with us, and use this time to really show you a few case studies of how we're preparing ourselves for AMP7 in terms of some of the new innovative technologies we're planning to use. And I know when you do that, you can probably think, well, other organizations could get up here and give you a few case studies as well on how you're going to deliver differently for leakage and sewer flooding. And that's why really where I want to start before we dig into the case studies is to have a little bit of look behind the broader scenes of how are we approaching AMP7 as an organization and what are, as I would call, our differentiators put us in the best-possible place to deliver against some of these new ODIs, one of those magic ingredients that United Utilities has, that it's setting the best-possible framework to constantly deliver a new series of new ways of working, new pieces of technology, but all benefits around delivering better service to customers and delivering a better outcome on the ODIs. So I think I'll start with some differentiators. There's 3 things I think that are the magic ingredients we've got, and I'm going to move on past that and have a little bit of behind the scenes with some of the case studies. So if -- again, apologies if you've seen me here before, but the biggest thing we've got the cornerstone of how we work is what we would term Systems Thinking. Something we talked about for many years, and I will briefly talk about a bit of the theory behind it for those that haven't seen it before. Systems Thinking is an interdisciplinary study. It's not something we've invented. It's existed for 50 to 60 years in lots of different aspects of research. And if I take it simply, it considers things of our systems, pieces of information, activities, assets that are connected together in a system. A system has a number of components, they all work together to create a function. A system for us could be our water or wastewater system, both of those joining together, the assets, the environment, the customers, the road network, all of those things are aspects of a system. And the clever thing is the thinking element of that system is that actually, the concept here is to understand how the system works, understand what happens in one area might have a connection to another part of the system. And the reason you want to do that, the only 2 real reasons that you want to do Systems Thinking are that if you understand how the system operates, you can get a sense of it having a common signature, a pattern to the system that you can recognize. And if you can recognize the pattern to the system, it means you can predict how a system might change or perform differently. And if you can predict the future or how it's going to evolve, that's a great chance to step in front of that to deliver better performance before something on to what happens and you have to react to it. The other real value of Systems Thinking is that because you understand how the system connects together, sometimes you don't have to spend a lot of investment in one area to deliver a benefit. Sometimes you can trace the connection of the system and make a smaller investment here for a bigger benefit elsewhere. And those 2 things have really driven over the last more than 5 years in our focus on Systems Thinking to realize some of these benefits. Now that a little bit of the theory, the 2 things that really help us drive an embedded Systems Thinking are some of our frameworks that we've developed over the last few years. So I don't want to dwell this, but I do want to kind of reference the fact that behind this, how you deliver Systems Thinking is a capability model. Your organization getting better at certain capabilities, certain organizational skills. Those gray ones on the visual you'll see there are the 8 most important capabilities for Systems Thinking. Customer experience is at the top of that visual. And beneath that, a number of key things your organization has got to get really good at if you want to be great at Systems Thinking. The ability to understand your assets in the life cycle from kind of cradle to grave, the ability to plan, to work schedule upon all of your activities, your resources, operational and monitoring control to understand what is happening across your entire system in realtime or near realtime. And then supporting that real recognition, the data, information and your business processes are kind of the oil in the engine that makes all of this run. So I've shared that before, and I've also shared a visual, I think I really want to dwell on for a moment because I'm going to come back to this later about how it's driving our thinking even further. For each of those capabilities, we are tracking ourselves in a 1-5 scale, 1 being the least mature, 5 being the most mature. And it's just helping to push our thinking in all aspects of Systems Thinking in each of those capabilities to really get us to challenge how we work. And so this example is the operational monitoring capability. One of those 8 capabilities monitoring with your own eyes and ears or your digital eyes and ears, what is happening across the Northwest system. And a very basic approach will be level 1. You're relying on humans. We might be able to figure out that, see some things, spot something here, something and we do something about it. Level 2 as you come increasingly mature is a view of what's happening perhaps across the network, across the whole of the region in one place. You're not bothered about what's happening in individual areas, but you've got a bird's eye view for all of the Northwest. At Level 3. Well, maybe you can use some technology to start to dig into all the information you're gathering. What is that telling you about? What happened and why it happened? Which is really useful. And some of those Level 1s, Level 2s and maybe some Level 3s, you're some -- you're seeing some other companies, traditional approaches. We are pushing into Level 4 and Level 5. And we're going to come back and show kind of example of Level 4, when I get into the case studies. But Level 4 is that's really good, but unfortunately, humans might not be the best answer to look at all that information. So we're adopting the use of machine intelligences, artificial intelligence, machine learning, whatever term you use, to mine that information and back to the system concept to predict what could happen as the system signature and the pattern starts to change. And finally, I always say it's kind of the rise of machines at Level 5, but we're actually asking those machines themselves not just to predict the future, but to manage the system, to correct it, to respond it, to adjust the flow on a pump, to change an asset from one to another, to get the best optimal performance of that system. Now that's our overall approach, and that's something we've developed over several years, and we really wanted to look at not just what's happening within the sector, but what's happening outside of our sector. Systems Thinking is not something that's unique to the water sector. But it's been adapted to several other sectors themselves, other approaches in business, and I mean research and in academia as well. And what we wanted to do is to understand what other companies are doing, and then in particular, how we were performing in Systems Thinking compared to the rest of the sector, and then most importantly, what are the size of the benefits you can achieve. So to do that, we once asked a organization with a real global reach and expertise in multiple sectors to have a look and kind of do a bit of a study and analysis on is this worth doing. And if it is, what benefits do you get and how well and how good are you with delivering the value from this. And so we asked Accenture. So I've got a very short video I'm going to play for you now to hear from Accenture's review and feedback.

I'm Gavin Moore, I'm the Managing Director in Accenture, and I run the water sector for Accenture in the U.K. and Ireland. In 2018, United Utilities asked Accenture to help them build a Systems Thinking maturity model. So we compared United utilities against other asset-intensive industries, specifically oil and gas, aerospace and defense and chemicals and mining organizations. And we found in each one of those sectors, organizations that invested ahead of their peer group in Systems Thinking capability delivered results in excess of their peer group. So we've seen improvements in productivity, in cost optimization and in service improvements in all of those organizations who have invested more than their peers and had a long-term strategy around Systems Thinking. We remain convinced that Systems Thinking is the right strategy for United Utilities, and it's one that other organizations in this sector should be following. We are already seeing benefits of the United utilities across service improvements, cost to serve, customer experience and on the environment, and we think there's a lot more to come in the next few years. So Accenture has recently completed another report for United Utilities to understand the current position of their Systems Thinking capabilities across those 8 capability dimensions. And I'm pleased to say that we've seen improvements in all 8 capability areas. I think it's absolutely clear to me that United Utilities are ahead of the rest of the water sector in the U.K. and Ireland in both their current performance around systems thinking and also their long-term strategy and vision for where they can take the organization. I think if I look across the sector, the thing that separates out United Utilities from a number of its peers is the ability for the entire organization of UU to really get behind the Systems Thinking philosophy and strategy and to really focus its investment and talent behind the development of those core 8 Systems Thinking capabilities. In a number of other organizations, there is an outward facing strategy and then the execution plan that follows is extremely different or might be disjointed or fragmented. But at United Utilities, the key secret sauce is that the strategy and the execution all falls in line behind Systems Thinking. I think if we look across other sectors and what other leaders in Systems Thinking have been able to deliver in terms of results, we can expect to see totex improvements and efficiencies between 10% and 15% as a result of United Utilities relentless focus on the Systems Thinking strategy and execution.

So that was getting more for Accenture, just given a little bit of an external flavor of the views of how powerful Systems Thinking can be. Probably a little bit and enough theory financing on Systems Thinking. So before I move on to one of those other differentiators, let's just look at a great case study of that. And this is something Jo Harrison mentioned earlier on about the ability to think of an environmental catchment as a system itself, the rivers, the streams, our discharges from our wastewater treatment works back in environmental and catchment and the ability to think differently once you understand that as a whole system. There's opportunities to think differently over how you will invest and operate that system to deliver the environmental outcomes that are set through legislation. And this is one of those examples. Systems Thinking in terms of a catchment, which is the catch phrase comes from, but this has been hard coded into our AMP7 plan. And is one example of how you can apply Systems Thinking to a problem, which is how do you deliver the best outcome in environmental catchment and deliver it in a more cost-effective way with savings just under GBP 19 million. So that's, I guess, the cornerstone of our -- how we work differently and how embedded that is. But there's 2 things that really supplement Systems Thinking. The first one of those is to be able to go out there and get the best ideas and use those and maximize them and adopt them really quickly into your organization to make you better, faster, cheaper or safer. And clearly, we'd call that innovation. And we've already referenced before that actually across AMP5 to AMP7, our approach to innovation has delivered savings of GBP 445 million over those AMP periods. We've got a well-embedded approach to innovation and something that actually Ofwat referenced as well. Innovation was one of their key assessments for organizations to the last price review and sort of achieve the highest-possible rating for innovation and to see those kind of words from Ofwat is very encouraging, particularly because Ofwat is now proposing establishment of this innovation fund for AMP7. A central path of additional fund that companies can apply for, together with others in a collaborative way to deliver another step change in innovative ideas. And we feel we're really well placed on the back of our credentials and the back of our framework to really access that once the design of that mechanism is established over the next 12 months to Ofwat. I thought I'll give you a little bit of sneak peek behind and how our innovation approach works. And apologies for the 4-box model, but it is 4 boxes. And what I wanted to kind of talk you through now is just a bit of the approach we have. So there's 4 elements to it. Accessing the innovation ecosystem is a big deal for us. Big companies can find it hard to do with anybody other than other larger organizations. The ecosystem of innovation is a mixture of large companies, research businesses, academia, small startups, R&D, all of those in a mixed and blended ecosystem. And our focus is ensuring we, as a larger company, can access some of those small startups, those new ideas often from outside of the sector and bring them in really quickly, adapt them and start using them. And so you'll heard us talk and have seen on our website the Innovation Lab. So we've just completed our second lab. The lab is a way to pose questions to the world and to find most innovative solutions to some of those common problems and the real power of it is those R&D companies or small startups, they've often been have worked with us. Common work with us at our innovation center, it's at Lingley Mere in Warrington. Between those over 10 weeks, we co-created a solution. It's really powerful because the speed to market, therefore, is massively reduced and it's adapting very innovative technology that we wouldn't have otherwise seen and other organizations haven't seen within the sector. And so we've just run our second lab, and there's 4 really exciting opportunities in there to do with ODI performance. And so I will touch on one of those later in the case studies, particularly around leakage. We also know academia is a good place to go, and there is a lot of funding around that. So actually, our innovation isn't all funded by ourselves. We are able to share funding investments in research. And in particular, we have expertise in research from kind of the academia end. So we have a number of PhD students who have done some really advanced data science work. One of those is that blockage prediction as mentioned up there. And again, that's one of the case studies I want to show you in a moment. Backing those up, we've got a real focus, not just on incremental improvements, the 1%, 2%, 3% of marginal gains. But your step change is the stuff that really breaks how you work and can deliver significant operating benefits, cost or particularly service. And so Jo mentioned one of those briefly earlier, and we have to treat raw water to make it drinking water. We store that in massive reservoirs. How about we start the treatment process in the reservoirs themselves, very simple with carbon blocks that can pretreat and reduce the cost of treatment and improve the quality of the water, and therefore, benefit our ODI around the taste and odor of water. That is something that is not happening anywhere else, but could be a real game-changer for us and for the sector. And then finally, it's great having ideas coming from outside, but a lot of the best answers are from inside the organization as well. We've got a depth of skill across science and engineering, operations and all other aspects in between. And so for us, harnessing the power of our own workforce and more than 5,000 strong people is vital. And so we've been focusing here on how do you extract the information, there's great ideas from your teams. And how do you adapt those really quickly. And so there's some phrases on that, the innovation 100 of 100 of the most talented people in our organization, together with our apprentices and graduates who are given challenges and training to develop their ability to problem-solve. On there, we've got the annual CEO challenge, where Steve himself sets out specific challenges and our graduates, first and second years, come together and work for a period of time to collaborate and come up with new solutions. We have apprentice sprints that isn't an actual 100-meters dash, but that's the term used to do rapid problem-solving for a week to start out with a problem, to come out with a prototype at the end, a great new way to do problem-solving in a very short period of time. And then finally, we have a crowd sourcing tool. So we have a tool. It's an app where all the company can get together behind a problem and submit their problems and everybody votes on them. One of the most recent ones we've used had 200 new ideas for one single problem. So we can -- it helps us unlock the power of the organization to deliver some of the problem-solving. I'm hoping that gives you a bit of flavor of why Ofwat rated us the highest organization in the sector for innovation. It's something that is helping us constantly unlock more and more opportunities for AMP7. The last differentiator, probably the one that kind of joined Systems Thinking and innovation together with technology. And I just wanted to really set the scene I suppose to how this is going to play out in some of the case studies. We have invested quite significantly over the last 2 AMPs in some really underpinning technology. If you might have heard us talk about our telemetry backbone, the network that allows us to sense our assets, the investments we've made in some of our customer mobile app that Louise, I'm sure, will mention later. All of that is embedded and now the opportunities to really maximize what can come of that. And as Steve mentioned before, we've brought together our technology teams because I think there's 3 simple steps to technology now, particularly in terms of operations. The first one is sensors, get information about how your system is running, have them out there across your network, across your asset base, and scan and understand them. We have just short of 100,000 sensors now. They're out there now. They're looking at pressure, they're looking at flow, they're looking at quality, they're looking at power, they're looking at temperature and looking at sound acoustics for -- particularly for water leaks. We're going to be significantly increasing our sensor system. But the challenge with those fixed sensors are, they are really good. But actually, you can't have a fixed sensor in every inch and every centimeter of your entire network. And technology evolves, so you want some level of flexibility without ripping out the whole sensor system. So in a moment, I'm going to show you the first, which is a new mobile sensor network. It's not fixed and invested and kind of connected and dug into the ground. It's flexible, it's cheap, and we can deploy it wherever we need it. So first things, get your information about what's out there. And then for us, it's then getting the insight from that. And for us, we have invested over the last 5 years in the best-in-class data analytics engine. So already today, we've loaded 0.5 billion pieces of information into the data analytics system we have back at our kind of headquarter, set up in the cloud, sucking a huge volume of information together. We then used that, and currently, we're running 185,000 analytics requests every single day to mine information for how that system, how our customers, how our employees and everything in between are operating and behaving to decide how we can deliver better performance. And that is allowing to move into advanced analytics back to how can we predict where leakage, how can we predict customer experience, that's the direction we're heading. And that, finally, I guess, is the third and final point, which is then very much about us, humans still being here but machine intelligence really leveraging that volume of data. No humans can absorb 0.5 billion pieces of information every day. But we are using machine intelligence. And there's a wide range of content there, you might hear the phrases, AI, artificial intelligence or machine intelligence, we keep it simply to machine intelligence. It covers everything, and there's a range of the simple end, simple machine intelligence is robotic process automation. Machines having access to systems like we would on a laptop and being able to replicate activities that humans would have done. You might remember that in one of the early Capital Markets Day, we talked about, this as a theory, no longer a theory. We saved 33,000 hours, and we're doing 1/3 million tasks by robots now. So we've moved into full deployment and application across the business. The more advanced end is really where you're going to artificial neural networks, machines that almost have to sense and being able to think for themselves, advanced machine intelligence. And again, you might hear -- remember the phrases HARVI and ERWAN. They all seem to have names in advanced machine intelligence. Those are 2, and we've briefly talked about before they're helping us to run the water network. Today, I want to introduce to the third. I'm not sure whether it's going to be a son or daughter or whether there's that kind of family relationship, but EDDS has been built out at the back of ERWAN and I'll explain what EDDS is in a moment. I'm hoping that's given you a bit of flavor, these are our 3 big differentiators. These are the things that allow us to really unlock the next AMP. They're not just flash in the pan one-off examples, they're an embedded way of working. And just to conclude, I guess, the theory aspect in the approach, I just want to kind of try and join all those together into a little bit of a vision for the future. This is kind of the other of innovation, digital and Systems Thinking. And at the moment, we are kind of concluding the construction of a large new water supply system in West Cumbria. It's a 100 kilometers of new pipe, large pipe, you can see from that picture and the water treatment works. A great investment in assets to provide resilient water supplies to more than 150,000 customers in West Cumbria. That simplified schematic just shows the complexity of the pipes and the network it serves in the Copeland and Allerdale sections of Cumbria. It's a great chance to just pull those things together. So what we're looking now at exploring this area is a few things. Some fancy phrases on that. But first of all, there's some key components we're going to be using there very differently. A digital twin. That is genuinely a digital copy of that West Cumbria system. We now build all our assets digitally. But we want to use that, the twin, the copy of the real-world to run that West Cumbria system as well because the digital world is effectively the optimum position you can deliver in terms of cost and performance. And so the twin allows you to optimize your system against what's the target against what the real-world is. The visualizer is a great part of Systems Thinking. The visualizer aggregates all your information, what are your customers saying and what's happening in West Cambria. What are your third-party information about whether telling you what's happening in there? What's happening across the entire region in that area and visualizing it, so you can see that at an easily digestible format. The key things are the bottom 2, though, that's where you've now collected all the information together in your digital twin or your visualizer, and you can really go to work. Predictive analyzer, back to my sense before, we've got Level 4 and Level 5. You need to be able to predict the future, understanding what's happened and why it happened is no longer good enough for AMP7. And our driver over the last few years is to be working out what could happen, when could it happen, and what could you do to avoid it? And the analyzer is a machine intelligence to help us do that far quickly and far more accurately than humans can. And finally, an optimizer, simply put, it's trying to get the best-possible performance from that West Cumbria patch. It's a machine intelligence, again, considering the cost base in terms of the day-to-day running costs, power consumptions, utilization of resources to deliver you the best-quality water and deliver the water to the right place at the right time. And that we believe is a great and a very different way to run what might be seen as a traditional organization. And we expect to see benefits that include topics like that. Today is about just exploring how those things integrate together. We would be able to provide a better service to customers, less chance of a water mains burst, less changes of an outage at our water treatment works and optimize best cost performance delivery for the whole of West Cumbria, the lowest total life cost we could deliver through the optimizer. Deliver on ODIs, because we are able to predict, prevent, plan, mitigate, should there be any issues with performance. And then in terms of safety and well-being, well, actually, we do still have people going out on their own at night, and this is a great chance to have robots, sensors and stuff to be able to monitor our system out of hours without always relying on humans. There is always still an aspect of humans running this system, but this is a great opportunity to run things very differently for the benefit of our customers. So that was a little bit I guess on the theory. I guess I didn't want to leave is that it was what could be how things work and really wanting to dig into a bit of a, well, how -- does that really work? And so to conclude, I've got 3 case studies. The first one is a little bit of a look back to prove it does work. And the 2 of it is a little bit of a look forward to see the art of the possible as to how we're tackling AMP7. And so the 3 I've picked really kind of reflect some of the focus areas that you heard from Jo, looking to interruptions towards supply through customer minutes lost, sewer flooding and leakage, some real hot topics for ODIs in AMP7. And so let's start with a look back at customer minutes lost. So this is the measure for the ODI, it's about less interruptions of water supply. What I've put on there is last year's performance in terms of ODI reward or penalty for this single measure alone. And we were really pleased last year to have the highest overall performance on this specific ODI on a return just under the GBP 12 million mark. There's a range of maximum penalty reward and that continues. It's slightly different for AMP7. And as you've already heard, it's been set for AMP7 as a target against the quartile. And I really want to kind of unpack this as to why have we achieved in this year such high performance. And what does that look like going into next AMP? Because I think through this, there's a little bit of an example of how those 3 elements of innovation Systems Thinking and technology can really work in harmony together. So as I'm looking at a bit more detail as to how performance has been on customer minutes lost. So this is the -- obviously, the average minutes lost. This is based on all the water interruptions that are not transient across the year, the number of customers and the duration and then we average that across all of the customers, the whole of the population in the Northwest. So this view there is the industry average performance. You've seen, in particular, the spike in '17, '18. So extreme weather events, like the extreme weather event we just had in February in terms of the Storm Ciara and Storm Dennis, kind of have a significant impact in maintaining water supplies. And so the industry had a significant shock in that period. And then we've now been set kind of the upper quartile view, the 7 minutes to roughly 5 minutes performance metrics. So you can see the kind of the trend for the industry overall in the direction of travel to reduce obviously the number of interruptions. It's a big deal for customers. It's a big deal for the sector to deliver better performance. And so to overlay that, this is our performance kind of in last AMP. We started above sector average. And then since then, we've driven a lower than sector average for the last 2 years. And notably, we didn't see a massive impact in the same way the rest of the sector did, kind of a doubling of customer minutes lost due to the extreme weather events. And we think this year, we're well placed to enter the next period. And what I do want to do now is just to play back in a bit more detail, that trajectory we followed. What's behind that? Is that just a bit of a fair wind, a little bit of look or is it back to those embedded differentiators? So this is a bit more of a detailed take, just looking at the United Utilities performance. And we'll just go year-by-year really quickly. So '15, '16, kind of in the 16, 17 minute mark. At that time, we decided to introduce the first deployment of artificial intelligence to the water sector. I've heard Jo mention it before, and I've mentioned it before, ERWAN, event recognition in the water network, it stands for. And machine intelligence spotting patterns that might mean there's a burst about to happen and therefore, you can react quicker and repair the main before customers might see a big interruption to their supply. We deployed that, that year, we deployed another analytics tool to look at the rate of change. So if our storage reservoirs, where our fresh waters are stored, if they suddenly start dropping quickly, again, that indicates there might be a burst that is taking those supplies and the analytics engine will flag that to say, could be another reason you guys to have a water mains burst. And so that gave us a benefit. We thought we'd go a bit further and the year after we put another analytics tool in kind of night flow. So at night, fewer people using water than in the day, and that gives us a background signature. And if that's higher than normal, again, that's a great indication that actually there might be some issues. And during that time, we really began to focus on. If there are bursts, the first priority is to restore supplies. And then you can repair it, and that kind of mantra was really hard coded into the organization. And so we saw it overall drop on the back of the analytics tool. And then last year, we then did another step forward, and we used our approach on systems thinking, and that was to think about how you can monitor, control, schedule your work in response to water mains bursts. And so in our central control center, the integrated control center, we've now got a 24/7 system operator team who are monitoring and managing the network. We have an enhanced series of tanker fleets as well. They only came online really in the last few months of 2018, '19, but that still has been a really significant gain for us. And then finally, we know this year in forecast doesn't really end to the end of March. And we also know, as I said, actually, there's been some extreme storms. So we know February has been the wettest February ever and Storm Ciara and Dennis had some huge impacts. Notwithstanding those, we're still in a very positive position overall. And that forecast at the moment is not a reward this year. What's great through the approach and system thinking is, again, connecting the broader benefits is there isn't just an ODI reward on the back of this particular measure. Actually, this is about keeping customers on supply. And so if we look at within our overall, what was SIM or the new C-MeX measure, we can look at the customer experience just for water supply customers, and that's moved dramatically from 18 to 6 position within our overall customer experience measure. So there are complementary benefits, not just the 39% reduction in customer minutes lost. I'm hoping that gives you a little bit of an example of you can do this and actually applying this really delivers benefits across the period we've shown here is AMP6. I kind of want to wrap up now and look forward and kind of pick out sewer flooding and leakage into, what is really, exciting developments in terms of technology and Innovation and Systems Thinking. It sits in the kind of proof-of-concept all ready for deployment phase. So there's some things I won't be able to show you in any detail because some of it is proprietary information, but I still really wanted to bring to life how we are really focused on, again, transforming how we work to unlock performance in AMP7. So let's go back to a little visual I've used before, and talk in terms of sewer flooding, a big measure for AMP7 for the sector, a big measure for us. If we think about sewer flooding, about monitoring and knowing when the flooding is going to happen, we can use the same 5 levels. Level 1, as I said, humans. Currently, some parts of the sector were reliant or only input being human saying there's some flooding coming out of your sewer network. Quite late to that point, but still part of your intelligence. Level 2. Well, actually, you can monitor your network itself. You can have a level -- alert that says it's surcharging serious flooding, not only flooding the environment or on to the road. Again, really useful, but at that point, the sewer flooding has happened. Back to the analysis piece. Actually, that's great historical information that you can analyze to decide how you can manage that system better. We might call it hotspotting, looking for key areas that often have repeat issues, where we can put more focus on to those and maintain them and provide more investment in those areas. Where we're heading now, and the example I want to show you is where you move into level 4 and 5, which is actually not just understanding what happened and how you can prevent it again, but predicting what could happen and where could it happen. And only really machine intelligence can do that across a network that's tens of thousands of kilometers long. And then we can see how that will move into level 5, where actually not just the alerts, but the actions are then triggered directly from the machine. So I'm going to kind of bring to life a bit sewer flooding, I suppose. It's quite straightforward. It is a sewer pipe, and as the level in that pipe increases, at a certain point when it fills, it will discharge and it might impact customers or it might spill into a water course and impact the environment. The reason those pipes get filled, and it varies through the day, sewer pipes will fill up with wastewater, depending on the usage of customers, day and night, it's different, whether there's factories working at a weekend during the day. And obviously, rainfall plays a part in that as well. So I think I've tried to go for the most complicated graph of today for you. I've used all 4 axis on this one, but I really wanted to bring it to life, I suppose. The green axis along the top and down here is just rainfall. So the longer the green line is, the more rainfall on that day. This blue line, you're seeing kind of up and down is actually the level in the sewer. So the higher it is, the more the sewer is fill -- full, I should say. What we're really focusing on is that red dotted line. As soon as you go over the red dotted line, it's going to spill. It's going to discharge, you might be sewer flooding. And you can see on there, as an example there, where there's a really short spike. And that example is high rainfall. Rainfall filling up and inundating extreme events impacting the sewer network. This other one, though, here in the middle is a much longer-term change in kind of the sewer levels. It's hard to predict whether that's just more customers using the network at that time. Actually, at that point, though, 3 days after it seems to start to deteriorate, I suppose, and the level rises, we see that actually reaches the red points. And in this case, this was a sewer blockage. Blockages can build up over time. As Jo talked about earlier, wet wipes are our bane. That's one example of those things slowly start to aggregate and ultimately block the network entirely. The difficult thing is trying to understand, was that a blockage or was that's just an increase in the use of the wastewater in the network or was it due to some of the rain that was happened at the same time. And then you can see, 3 days later, in this example, the blockage has been cleared, and the level drops and we're back to normal, but it keeps changing as the patterns change. So it takes time to build up blockages often. You can only really see those at the point it spills or the point your level monitor says, we've reached the top level, it's about to discharge. And obviously, getting out there is really important. But at that point, you've already had a potential sewer flooding incident. You might want to mitigate it and restrict the -- an impact, but it's already happened. So that's the way the sector's worked for some time, and we've moved away from that. And I want to show you something now that's challenging this kind of approach. And it's come from, as I said, some research we've been doing. We call it EDDS. So EDDS is not a son, I think it's the son or the daughter of both of ERWAN. EDDS stands for Event Duration and Detection System. And it's an AI tool, machine learning tool. What EDDS is doing is, we've installed 2,000 new monitors, Jo mentioned those earlier, across our wastewater network. They're monitoring the levels in the network. We've used in kind of out of our ERWAN system, the system that was able to predict water network pressures and predict if it's going to be a burst. We've kind of used the heart of -- well, it's DNA, and we've built its child, effectively EDDS. EDDS is based on artificial neural network, which means it can learn for itself, make its own deductions, create its own model of how the system works. And that's what we wanted to see if it could do, could EDDS learn new wastewater network? And therefore, could it help us predict a blockage before it forms because at the moment, we're relying on at the point which it fails for it to be happening. And so there's been a huge amount of research we've done. A lot of academia have been involved with us, which is our own developments and our own machine learning intelligence itself that we own. But I wanted to show you kind of how EDDS is now operating and getting us to think remarkably different in terms of sewer flooding and sewer blockages. So this is the same visual from before. We ran EDDS through this and hundreds and thousands of other scenarios to see how accurate it could be. Could it spot the right buildup because the patterns for this continue to be erratic beyond these timescales? And so when we run it, and you can see the blockage kind of starts there and it ends there. So how early, in this range, could EDDS spot it? Hopefully, at least it spots it quicker than customers can, because we already get that now. And what we've seen from the work that EDDS has done is that it's not faster, it's unbelievably faster. It's spotted after 105 minutes of the 3 days. So it's 99% quicker. And it's spotted that with absolutely no false alerts. So we didn't alert to what thought was a blockage and it didn't turn out to be. Every one of those scenarios you've run, you got 100% accuracy in predicting far earlier than the discharge would have happened, the blockage forming. And that 3-day window is a huge opportunity for us in AMP7 to respond, to address those issues as they're forming. And so this is really exciting developments through our innovation team, through our research of academia that we think is a great opportunity for us, particularly because of the real challenge the sector has been set, and reading sewer flooding. I think let's wrap up with leakage. So we've done a number of topics before on leakage. You've heard us talk about the dogs. I think Steve did want to bring the pack of dogs here today to show you that those can detect leaks. We've had our sensors technology, we've had satellites, and we've also had the customer app, which allows customers to register leaks for us really easily. As I said before, those sensors, which we're investing in more in AMP7, are a massive opportunity. Those sensors are acoustic, and they sound and listen for leaks and can give you an area where there is a leak happening in, which is increasing opportunity to find leaks. We want to keep pushing that even further. And as I said before, there is only -- so many sensors you can put into a network. You can't sense every 5 centimeters of the network. And as technology advances, you want to be able to swap those out. So we've got a first, which we're going to show you today, which is a mobile sensor network. It's not fixed and they're not built into the ground. They are a mobile center that we can deploy. And that's what they look like. And we call them hockey pucks. So those 3 visuals on the far side of the Digital Ear are new devices that we've developed. There's only 3, those 3 is all you need. And that is the kind of the size of them. So that is 1 of those 3 sensors. Those sensors are filled with sensing technology. And the 3 of them, we put in at 1 end of a water network. They fly down with the drinking water, they're sterile and safe. And we collect them at the other end and out of a hydrant further down the water network. And as they go, the 3 of them are spinning and triangulating and reading the detail of the turbulence of the pipe. They're sounding the pipe. They're mapping the pipe. And that has given us a huge amount of rich information that is ultimately then sent by the 4G network for immediate analysis. That means we can deploy these without having that fixed network or we can deploy them if we want to pinpoint exactly where there is a leak, or in some instances, we find our exact mapping location because these are also have got GPS. So we can correct any slight adjustments we want to make to our accurate mapping system. With those, comes with our own machine intelligence. So actually, that data, and there is a reading from every 3 of the pucks every millisecond. I can't take that in, but the AI in the middle can. So it's learning from patterns to determine what looks like a leakage signature. And then, from its library of files, it can actually predict the size of the leak as well, the severity, and the likelihood of that leak deteriorating. That is a massive opportunity to really revolutionize how a leak detection is done, and it supplements all the other advancements we've made so far. You'll hopefully see, though, back to our System Thinking that drive our focus is why we asked for and help in developing this. This is an organization we're now in a contract in. We've got first-mover advantage. But it's been developed in 6 months. At this time last year, this didn't exist. It was a theory. We've produced 10 different versions there, and the most advanced one is going through some final trials. So that's really exciting for us. We've got our advantage. We've got the opportunity to really break how we think about spotting and detecting leaks. And that's making us think differently about how we're going to work, what does that intelligence tell us about our system and how do we respond when the hockey pucks give us some early alerts. We've been co-creating it. So we've been able to develop this further. And we think this isn't really the end for these sensors. The -- as you've seen, they are very simple plastic devices. And over time, we've changed the technology in them. We think we can keep on evolving that. And so we think there's great opportunity as we co-create with the team, who have developed it, to build its potential wider. And one great example is quite now, the traditional approach in sewers is to use a CCTV camera to go in and scan it. Well, actually, these could be built to go and do something similar for our sewer network, and that's something we'll be exploring in the future. So that's it for me. I'm hoping that's given you a flavor of and not just we think we've got a Systems Thinking, but we've had some independent assessment of it. We also have got some really good credentials through Innovation. And those aren't just credentials for the sake of having them. They are really helping us to drive our thinking in pushing our approach to operational performance in AMP7. I'm hoping you can see that some of the case studies are really giving us another opportunity to unlock future performance as well to really get us to think very differently about how we're going to deliver some of these performance targets. It is a really exciting time to be at UU. We're really confident of the plan, but this is a great chance to see how we can unlock further performance in the future.

So I'm Jo Harrison, I lead the Environment and Asset Strategy team. And I'm just going to take you through our portfolio of ODIs that we're going to be really basing all of our activity on as we go through the next 5 years. I'll just sort of take you through a little bit of an overview as to what those look like, and then a deep dive into some of them, not all of them. So you don't need to worry. I won't do all 46 for you. But we've spent a lot of time building our ODIS, working with our customers, undertaking a lot of customer research. I think we did something like -- we expect 135,000 customers and there's a thing like 100 pieces of research to build a really robust approach to the way that we wanted to build out our ODI suite. And what that's left us with is a suite of ODIs that is really much more rounded and gives us much more opportunity to innovate and deliver better performance going forward into AMP7 than we saw in AMP6. So the customers are protected if things go wrong. But really, we've got a very, very balanced approach. And since we've delivered our final business plan, one of the things that we have spent a lot of time doing is building our delivery plans, so that we can really make sure that we're focused on how we're going to achieve the maximum possible performance in each of those different areas. So our suite of 46 ODIs is built on 7 customer outcomes, and these are the same as the outcomes that we had back in AMP6. So you'll recognize those, and I won't read them out for you. But amongst the 46 commitments, we've got different types of ODIs within there. So we've got 7 what we call comparative ODIs. So that's where they are common across the industry and all companies have got very -- they've got actually the same targets associated with those. And in many cases, those are upper quartile targets of performance. So -- and examples might be -- so sewer flooding, supply interruptions for customers are 2 examples. But also the new customer measures, C-MeX and D-MeX, are part of that suite. And I'm not going to talk about the customer measures now. Lou is going to pick that up in a little while. And there's also a suite of ODIs, which are called common measures, and these are slightly different. So all companies have these, but they have different targets and all different glide paths or different scenarios in which they involve the companies. But the vast majority of our ODIs are what we call bespoke measures. So they are built by us, for us, and other companies don't have the same measures. So that's where I'm going to spend the bulk of my time talking about those 27 bespoke ODIs. And then there are 7 that are just reputational. So there are -- there's no financial benefit or penalty associated with them. But one of the key things that we wanted to do was really look about how we could drive innovation and a different approach within the industry. So how could we really think about how we can push the industry to achieve different objectives going forward. And these are 6 of the really sort of innovative ODIs that have been approved within our plan. And again, it's going to allow us to do things differently. So the first one that I just wanted to talk about was how we're going to deliver air quality. So we have an incentive, as part of our Bioresources business, in order to drive improvements in our nitrous oxide emissions. This is a program that we've built ourselves based on information that customers provided us with about clean air that they really wanted to see ambition and improvement. So we've got a defined program of investment, and we've got the opportunity to earn over GBP 4 million of reward by delivering that program of investment. We've also got a program to deliver improvements in lead. So lead is present in the customer common supply pipes and private supplies. It means that we have to protect customers by dosing our water in -- with phosphate, which is not necessarily something we want to do in the long term. It's not necessarily sustainable. So again, we've got a defined program of work that we have set about, which will enable us to achieve rewards of over GBP 12 million if we deliver that program as we're planning to. One of our largest areas of risk and opportunity within the organization is with regards to sewer flooding. And obviously, the changes that we're seeing in terms of rainfall intensity and climate change are really going to drive focus in the business in this particular area. But as well as the common measure that we have on internal sewer flooding, which I'll come on to in a minute, we also defined a bespoke measure. So this is what we call our hydraulic risk of flooding measure, and we have an internal one and an external one. And this is really to incentivize us to deliver solutions to those customers that are experiencing long-term issues with hydraulic flooding, and potentially where they have previously been noncost beneficial to deliver before. So the available reward associated with this measure is over 40 -- sorry, over GBP 60 million, and the 2 together, for internal and external, comes to over GBP 60 million. One of the things that we are really sort of focused on doing within United Utilities is looking at how we deliver resilient service in the long term. And we have -- we're really wedded to the utilization of natural capital to build naturally strong and resilient catchments. And that's beneficial for us in terms of drinking water quality, but also in terms of managing flooding and in terms of offsetting the impact of our wastewater treatment works by looking at other interventions within the catchment. So we've built an innovative natural capital ODI, which incentivizes us to deliver natural solutions as opposed to traditional hard engineering ones. And again, there's a high level of reward associated with that ODI. We're also very sort of aware that within our approach going forward, we're going to have to develop a different relationship with customers. One of the key impact for us in terms of flooding is blockages. And as you'll be aware, very much from the press, blockages are primarily caused by what customers flush down the loo, whether it's wet wipes or fatberg increases. So we have developed an innovative ODI, which looks at how we sort of incentivize ourselves by raising customer awareness to reduce those negative impacts, but also, then to drive better customer behavior. And we've got a similar one in terms of capital consumption and protecting water in the home. And then finally, in terms of this sort of 3 to 6 ODIs I wanted to bring your attention to, we've got one that is around delivering a more resilient water service. So we've built a program of investment that I'll tell you a little bit more about in a moment. But again, the opportunity to deliver over GBP 9 million of reward. So this slide just illustrates the join up between the comparative measures and the common measures. So we have 7 comparative measures, and we have 5 common measures. On here, though, we've got 10 or 12, and that's because in that suite of 12 is C-MeX and D-MeX, which Lou is going to talk about. But these are the ones that all the companies have across the board. And this is where we've really been trying to focus the construction of our plans. And the opportunity we've had is with -- from the moment we submitted our business plan, we've been building programs of work to deliver really effective service improvements in these areas. And that's really been on a basis of the opportunities that we've had from having fast track status, and from also accelerating GBP 100 million worth of work into the last year of this AMP to give us, what we call, a flying start in terms of delivering against these targets. But all of that is also based on the fact that fundamentally, what we're trying to do is built in a greater use of Systems Thinking going forward. Not only are we trying to do that, but we try to do it on daily basis of having the right people doing the right jobs in the -- at the right time. So I'm just going to talk you through a selection of our ODIs. And hopefully, it'll give you a sort of flavor of some of the challenges and opportunities that we've got. But please, by all means, when it comes to the questions later on, you can ask me about any of them. And I will try my best to answer them, or otherwise, I would refer to the Operations Directors, who know them intimately. So the first 2 are around our water supply. So the first one is about our supply interruptions. Now this is how Ofwat measures the service that is delivered to customers directly. So it measures when there is a burst on the network and how long it takes us to restore that supply, and it's measured in what we call customer minutes lost. And this is an area where we have seen really dramatic improvements in our performance. And that's been due to a variety of different things over the past 3 or 4 years, not least our investment in our tanker service, which enables us to inject water directly into networks rather than customers experiencing a loss of supply, but also in terms of technology. And we've talked to you before about our use of artificial intelligence and the rollout of monitors across our system. And Simon has talked to you before about ERWAN, which is an intelligent way that we sort of analyze the day-to-day performance of our network and based on the common signature of water supply across the whole of the Northwest. But one of the things that we're doing in this area is really sort of thinking about how do we take that forward. And we're investing in around 700 monitors on our PMVs, our pressure monitoring valves, which will enable us to have an even better view of what's happening within the network, with a centralized lens on that and the potential for the operation of those valves from a central perspective. So that will take us to a very different place in terms of the way that we can understand how the network is performing and how potentially we can control it from the center. And that's been driven by the opportunity for looking at how we're going to invest this line and start investment. So another use of Systems Thinking, and Simon will take you through a little bit more detail of that in a bit. Our water resilience program is based on a long-term look that we've taken at our asset base. So we've looked over 65 locations where we feel we have got a particular vulnerability associated with the resilience of our network, particularly where we've got single supply into particular areas. And so we've identified a program of work. We've built 20 resilience plans around that work. And it's known work that we're already delivering that improvement associated with it in. So one example is an improvement in our West East Link Main. So the West East Link Main or the WELM, as we call it, was built in AMP5. It moves water either from Liverpool to Manchester or vice versa, depending on your allegiances or the prevailing weather conditions. But what this investment allows us to do is to actually put 150 mega liters more of water through that link to make that pipe to Manchester more resilient. But that's only cost us GBP 2 million, and we're looking at delivering over GBP 4 million worth of benefit from that investment. So that program of work is really going to make sure that we are planning long into the future for the resilience of our water supplies. Critical to that long-term resilience is also leakage. So we've met our leakage target for many years. But you'll see that this was the ambition that Ofwat was trying to drive is going to push a huge amount of extra investment in this area to achieve our 15% target. So again, we're relying on looking at not only the conventional interventions that we've been delivering for a long time, but the continued use of Systems Thinking to underpin that challenge. So in this area, we're looking at deploying over 100,000 acoustic loggers across our system to be able to think and use those in a different way to be able to identify what would otherwise be hard-to-find leakage. Leakage detection is a very traditional approach, and this is really bringing technology to the fore. And using our Flying Start investment by the end of this AMP, we'll have already invested in 44,000 of those loggers and deployed them across the network. And of course, that's not the only thing we're doing. You've heard us talking about our leakage dogs before, but we're also looking at things like satellite technology to really drive those improvements going forward. We also need to really focus on water quality. So how are we investing to meet our challenges as how water treatment works? So the DWI introduced a new measure. It's called the Compliance Risk Index, CRI. It's an absolute measure. We need to achieve 100%. And we've been using the Flying Start investment in order to really drive improvement in how we operate and understand what water treatment works. So we've been replacing our granular activated carbon. We've replacing some of our membrane sites in order to make sure that our treatment capability and capacity is absolutely at the fore. And we've also looked at how we can -- supply points at which we could utilize mobile and ultraviolet technology in order to be able to ensure if we have any issues going forward, we can very quickly connect UV technology in order to be able to drive that improvement in water quality going forward. Another area is water quality contacts. So this is where customers contact us about the taste, smell and appearance of their water. And there's 3 things that really sort of drive customers to contact us. The first is high levels of chlorine. The second is if their water is discolored. And the third one is if it doesn't taste very nice, and one particular source of the chemical called Geosmin. So if we're sort of focusing on looking at chlorine levels, we've been doing some innovative work looking at cleaning our service reservoirs, which have the potential to increase the number of chlorine contacts. But we've done some innovative work looking at how we can model chlorine decay in order to actually better understand how we can optimize that work, how we can optimize our dosing of chlorine, in order to really be able to ensure that we are not impacting our customers in an adverse way. We're also increasing the amount of messaging that we've got associated with that, particularly on our website, so that actually customers can self-serve, so they're not contacting us about those issues. We can answer their questions in a really accessible way. In terms of discoloration, we've got a big program of physical work to clean our mains. And that's really the best way of controlling manganese, which is the substance which causes discoloration. There's a particular issue for the Northern companies who have a larger amount of soft water within their supply system. And then finally, Geosmin is a taste issue that's caused by algae. And we're seeing an increasing propensity for Geosmin to cause issues as we see a rise in the level of temperature in our reservoirs. But we're doing some work to look at how we can prevent the populations -- the algae populations from growing within reservoirs to actually reduce that, and that's an innovative work using carbon technology going forward. So again, a real opportunity that we've had as part of the Flying Start work to get ourselves ready for delivering great service going forward. And then this is an area where we really need to focus in the next AMP. So internal flooding from sewers, external flooding from sewers is a really big issue for us within the Northwest. And one of the critical things for us is that probably about 80% of our internal flooding is caused by blockages and about 80% of blockages are caused by sewer misuse, so what customers are flushing down the loo. So really, our strategy for driving improvements in blockages is also going to drive our improvements in internal flooding and external flooding. So we're taking a really holistic look. We've spent the last 3 to 4 years building what we call our integrated drainage area studies. So we've spent a long time reexamining all of our networks, making sure that we understand the connectivity, building models that we can use into live scenarios, so that we understand what the signatures of those drainage areas are, so that we can get ahead of the game. We can understand when there are problems happening within those areas and make sure that we're doing the right maintenance at the right time. And what's sort of critical to that is that we're not just thinking about how we operate today. We're also thinking about how we operate in the long term. So as part of our planning activity, we're building 25-year plans called drainage and wastewater management plans that are really going to drive improvement in this area. And we're using that information to basically do some enhanced modeling. So how do we do is we enhance targeting within our networks to ensure that if we have a high-risk area that we are doing a full suite of interventions within that area in order to be able to drive performance improvements. So some of those interventions are things like maintenance of our sewer network or dealing with issues such as tree roots or collapses that we find as we do those investigations. But also, we're really focusing on how we communicate to customers, because actually, it's only that combination of asset investment, along with customer communication that's really going to drive performance in this area. We're also doing some sort of innovative science. One of the things that we've been leading on is working with Water U.K. and working with the paper manufacturers. So when I mean paper, I mean toilet paper and wet wipes. So we've been working with people like Andrex to look at how they can utilize the new water industry standard, Fine to Flush. And we were really pleased that Andrex announced last week that their toilet wipes are going to be remodeled, and they've done a lot of work, so that they will now be Fine to Flush. So that's sort of another area that we're really trying to focus on in terms of driving that improvement. But where we've got risk around the common measures, we've got opportunity around our bespoke measures. So we recognize that we have a lot of rainfall in the Northwest. We are particularly at risk from internal sewer flooding. And so we've built this bespoke measure, which allows us to really try and focus on delivering better engineering solutions to be able to reduce the level of risk from flooding. So we've got 2 hydraulic measures, an internal one and an external one that are bespoke measures, and they are basically incentivizing us to deliver a program of investment that we have already built. So that program of investment is there to reduce the level of risk for customers. We've got a defined level of risk and defined schemes that we want to deliver. An early start is giving us a real opportunity to deliver this as quickly as possible. And you can see the size of the reward and penalty associated with this program, but it's largely within our control moving forward. Moving on to wastewater treatment. We have an ODI which looks at Compliance, and this is our treatment works, Compliance. So the Environment Agency expect all of our treatment works to meet all of their permit standards 100% of the time going forward. And so this one is really about our people. It's about how do we make sure that everybody understands what they need to do. And so we've run -- we've rolled out another training course for our employees, really trying to bring home the focus on back to basics to make sure that everybody understands their environmental permits, and they've got the right skills and capability in order to deliver those improvements. And Keith is also to change the way that we're working within wastewater, to focus on having 4 regional hubs that can really drive best practice. And those are underpinned by what we call a common cell approach, whereby, on a weekly basis, we're really focusing on our performance and how our assets are working and that people understand what best practice is and how we're translating that across the organization. But Keith is also leading on a big program of maintenance excellence so that we really embed moving from a reactive to a proactive approach to maintenance. So we really have a very predictive capability in terms of the maintenance that underpins the investment that we want to deliver across our wastewater base. Our ODI on growth and new development is, again, around us delivering a known investment plan. So that's around increasing the capacity of our treatment works in line with growth within the Northwest. And we've got particular areas of growth around Greater Manchester and North Cheshire where this is particularly pertinent, but this will enable us to undertake that investment moving forward. And then the final one on this slide is pollution. So we are one of the leading companies with regard to pollution, but the Environment Agency has set very high standards again for the next AMP. So they look at the most serious incidents and the more routine incidents, so smaller incidents, and we've got a challenge, as we said, of around 20% improvement in this area. But we're one of the few companies that's already at 0 serious pollution incidents. So we have a good track record here. And one of the important things, again, is thinking about how we utilize Systems Thinking to underpin this approach. So we've rolled out over 2,000, what we call, event duration monitors. They're monitors within the network that can give us that early sight of when something is going wrong. And Simon is going to talk a little bit more about how we use artificial intelligence to pull that information together to really drive improvement over the next AMP. And then sort of coming on to the final one that I want to talk about. We've touched on it a number of times this morning, around Natural Capital. So we really have focused a lot in United Utilities on our approach to natural capital. So 20 years ago, we developed what we called our Sustainable Catchment Management Plan, SCaMP program, which looks about how we can manage our uplands in a different way to really be able to deliver improvements in water quality. And that involved working with farmers, our tenants and people on nonowned catchment land and how we can deliver different environmental practices to protect water quality. And we've really taken that philosophy over the last 3 or 4 years and try to apply it very differently to wastewater catchments. So how do we think about water in a much more holistic way, rather than the very siloed way that maybe our regulators point us to? So traditionally, we've always thought about sewer -- about flooding, about water quality, and about water resources in 3 different ways, but actually, you're managing the same water in the same catchments. And so it makes sense to think holistically about water at a catchment scale. So we've delivered a number of pilots, 6 or so pilots, over the last 3 or 4 years, which have looked at trying to really drive catchment improvements in different approaches and different geographies. And so 2, I'd quickly like to mention is the first is in the River Petteril, which is part of the Eden catchment in North Cumbria, where we've delivered catchment-based solutions to offset the need to invest at our wastewater treatment works. So we've replaced chemically intensive, energy-intensive investment with natural solutions within the environment. And that's not only saved us over GBP 10 million, but it's also driven a greater environmental improvement. In the Wyre catchment, which is the one on this slide, we're working with the Environment Agency, Natural England, Lancaster University, but also Triodos Bank and the Esmee Fairbairn Foundation to look at how you can deliver natural flood management within upland catchment. And this is interesting because, although we're working with the Environment Agency, neither ourselves nor the Environment Agency would actually prioritize this catchment if we were looking at our own internal mechanisms. But by coming together with other organizations and creating a partnership approach, it's actually feasible to deliver very sort of innovative natural flood management interventions in a different way. And Esmee Fairbairn and Triodas Bank are interested in this project because we're trying to create a market for natural flood management. And so this is part of a [indiscernible] pilot that where we're working with the wider industry to look at how we can deliver different solutions in different and innovative ways. And the works that we've done in both the Wyre area and within the Petteril have actually led to changes in the way that government is regulating us. And so it sort of formed the basis of something called the Catchment Protocol, which is now the Environment Agency's standardized approach across the country to delivering these type of solutions. But recognizing that this was something that was also really important to customers, and we set about trying to look at how we could build an ODI that actually enabled us to deliver these solutions that incentivized us to do so at the same time. So we took 6 of the most important areas for customers. So water quality, flooding, climate, biodiversity, amenity and health & wellbeing, and built those into our new natural capital ODI, which utilizes an industry-wide tool, called [ BEST ] to basically quantify the benefits that we are delivering through that alternative investment. So finally, I just wanted to sort of share with you the sort of the tornado that exists for our bespoke ODIs. And I think one of the things just to really draw from there is that there is a huge opportunity for us in the suite of 27 bespoke ODIs that we've built. We have had enormous opportunity with our fast track status to build plans that are really robust that will enable us to deliver against this performance. The commitment that the organization has made to spending GBP 100 million of Flying Start money has also enabled us to be well on the way for delivery of those plans. So we are confident that we can deliver a really good performance going forward into AMP7.

Okay. Good afternoon, everybody. As Steve said, this is just a bit of an opportunity to talk you through, just for a moment, what's happened during AMP6. Because actually, that means that we're extremely well placed as we move into AMP7. But also, talk to you about some of the changes in relation to the retail price control and what's different this year or this AMP, I should say, in terms of how Ofwat have determined efficient costs and therefore, the cost allowance. And also the fact that we have some significant ODI opportunity within the retail price control as well that represents some significant opportunity for us. So I've stood here before and I've talked quite consistently about our strategy and the fact that we were very, very clear, as Steve said, that we needed to improve service, but at the same time, we needed to reduce cost. I think many of you, over the years, have asked me the question about our previous price control, and the fact that going into AMP6, we had a significant challenge. And one of the things that we recognized was that we needed to improve service, but we needed to make a huge and significant step change in terms of the retail cost base, but also make sure that when Ofwat got to the next AMP, that actually, we had worked with them upon making sure that we had a price control or, more importantly, a price model that actually reflected a number of the different variables that are associated with delivering costs within customer services. So if we look actually how we've performed over AMP6, I'm not sure I did my due diligence very well, but actually, when we started off, we had a GBP 165 million gap. That was significant. We were the worst performer in terms of bad debt. And as Steve has said, we have some significant factors in the Northwest, that mean deprivation is a key challenge. 48 of the most deprived counts or awards in the country out of 100 fit in the Northwest. So we're collecting cash against the demographic that has some significant and fundamental challenges. I'm delighted to say we've delivered GBP 165 million worth of efficiency, GBP 130 million, of which, has been delivered through improvements in bad debt, which I'll talk about in a moment. But as we head into the next AMP, actually, if we look at the efficiency that we forecast to deliver, it's a further GBP 57 million. All of that efficiency is identified against key projects and targets, are all assigned, and we're confident about delivering that cost challenge, particularly on the back of the improvements that we've made this AMP. So we talk about the step change in customer service first. And one of the key things we identified was that when we got to the next price control, we wanted to be able to have a voice. And to have a voice, you have to be great at customer service. And we set around -- set about a significant improvement across a number of areas. The first thing was around cultural focus on the customer. And as Steve said, it's been improving since AMP5, but actually, making sure that we're implementing new technologies, making sure that we're capitalizing on opportunities that technology brought, greater customer segmentation as well as making sure that we made that switch. So instead of waiting for customers to contact us, we were much more proactive in the way that we went around engaging with customers. Real simple things, such as if you're about to have an impact as a result of the fact that we might have a burst in your area or some discolored water, we proactively contact you, so you don't have to contact me. I can do that in seconds. I have the capability to proactively voice blast, text and e-mail customers and keep them informed and updated with what's happening. So they don't have to go to the time of contacting us, and more importantly, I don't have the expense of then having to deal with those calls. Better complaint handling. So there are 3 key things that we focused on. And regardless of sector, regardless of market, if you look at the Institute of Customer Service, they'll say there are 3 key things to focus on. The first is speed, the second is by making sure that you're helpful and friendly and the third is service recovery. And particularly in the utility company, there are always going to be times when we get things wrong. But making sure when we get things wrong, we put it right, and we put it right quickly. So what did that mean? Well, this graph here actually shows our SIM improvement. In '15 to '16, we were in 13th position. I'm delighted to say, we ended the AMP in '18/'19 last year because obviously, we've been trialing the methodology of C-MeX, but we went from 13th to 3rd position, the second WASCs. So a significant step change and going from a penalty position to a significant incentive. And complaint handling. You might say, well, why is complaints handling important? It's really important when we look at the new C-MeX methodology and how that's going to operate. We've seen a 44% reduction in written complaints over the last 5 years. And the reason that's important is to be able to access the higher rewards in C-MeX, you need to have a leading compliant position. We are up a quartile and leading in our current complaints performance. As I said at the beginning, one of the things that we really identified, and we knew was our Achilles heel, was bad debt. Things are tough in the Northwest. But we also recognized that we could do more, and we needed to do more. So we went out. I brought in a new team. We brought in a lot of new capability. We benchmarked ourselves extensively, and we sold everything that we could. The first thing was in pound improving data because bad debt can sometimes be a subject of the quality of the build that you actually raise. Making sure that we checked occupancy status, making sure we had all of the correct information before we raised a charge in the first place. The second thing, and this is one of the most fundamental things that we've done, is around credit sharing. We now credit share on every customer in the Northwest. Good and bad, if you've got a great credit rating, fantastic, but it helps you the next time you get credit. But actually making sure we default customers who don't pay us, means that we've seen an exponential increase in current year charges, and more importantly, current year cash collection. So the bills, and more importantly, collection methods have changed and so we have all the interventions. It now says, if you don't pay your bill, it will impact your ability to get credit, it will impact your ability to get a mortgage, to get a loan, and more importantly, to get that mobile phone contract. So an exponential improvement in terms of current year cash collection. And we brought in some new capability from financial services. So we now have a very complex but thorough credit management model that's looking at various different algorithms to identify you before you fall into debt, which means that we can identify, and more importantly, target early interventions collections activity. Enforcement is key. So if customers have the ability to pay but choose not to, we want to make sure we take you through to a court process, take you through to a court process quickly. We're the biggest users of the bulk issuing center for county court summonses down in Northampton, and that's a truly automated process through our new debt manager system capability. As I said at the beginning, affordability is key for us in the Northwest. We now have over 100,000 customers who are benefiting from affordability schemes. And what we saw from our data analysis was that we had some fantastic schemes, but the take-up in areas where the need was greatest was low. So we implemented something called our town action planning. We've done over 120,000 visits. And that's why we're visiting you on your doorstep to talk to you about your water bill. But not just your water bill, we're talking to you about your benefits as well to make sure that you're actually claiming everything that you're entitled to. So it's a holistic package that's offered to the customer. Now what we found was with this segment of customers, there was a high penetration of customers who had never engaged with us and never contacted us. 50% of the customers sat in this category, don't have the funds for me to take through to county court summons, but were really struggling to pay. We measure something called stickability. And what I'm pleased to say is that 18 months, 2 years after the visit of the payment arrangements and the plans that we set up in this space, 69% of these customers are still adhering to those plans. And last but not least, a payment plan. Payment plan optimization is significantly important for us. Why? The more customers I can get on secured payment plans, the less I need to focus. That's essentially safe cash. We have 73% of our customers paying by direct debit, the highest in the sector. And a further 10% of customers on additional payment plans, they may be web payment plans, standing order payment plans. But that means that 83% of our customer base is now on some form of secured payments. The results, well, the results speak for themselves. If you look here on the graph, we had a bad debt charge of GBP 75 million, we'll end '19/'20 at GBP 43 million, a significant step change through a huge amount of hard work and asset and just using data and analytics, a lot more focused and targeted in terms of making sure that we're managing risk. In terms of getting ready for the next 12 months and the improvements that we want to make today because actually that's a continuing picture, we want to kick into the next AMP. We've just implemented a new debt manager system. So we just migrated 370,000 customers into a complete new debt manager solution. We've done that without any impact to customer service or cash. I've implemented a couple of billing systems over my time. They're not something you'd wish on anybody, and I'm really pleased with the results that we've seen so far, and more importantly, the new strategies and new capabilities that, that actually gives us as we head into the next AMP. And if we look at service, so one of the things that we've been really clear to do is to benchmark the service that we're delivering, not against other water companies. Why? Well, the vast majority of us only have one resident. We only live in one geography. Some of us may be transient and move from geographies to geography, but the vast majority of customers tend to stay in the same area. So customers' views of service doesn't necessarily come from other water companies, it actually comes from other service providers. And you'll see here that we have created and identified a number of different opportunities where we think what we're doing is leading edge. And I'm delighted to say we've picked up 15 customer service awards and 10 collections and debt management awards. They're not utility awards. They're against other well-known customer service, customer leading brands in terms of the service, and more importantly, the debt collection solutions that we're offering. But it's not just been about awards. Why do I feel that we're well placed going into the next AMP? It's also about accreditations. There are only 14 brands in the U.K. that have the service mark with distinction. Even John Lewis, who I follow religiously, doesn't have service mark with distinction. There is really only ourselves and Wessex, the 2 other utility companies. And the reason that's important, again, in terms of accessing the high rewards in C-MeX, actually, the service market and accreditation will be key and instrumental to that. We're the only water company that is accredited from the Chartered Institute of Credit Management, and that was important to us because we wanted to professionalize credit management as a capability. And some of that has been instrumental in making sure that we can attract and retain the best talent in the company and deliver some of those exceptional improvements that we've seen. And last but not least, Shaw Trust accreditation. We are the only water company. This is about full accessibility standards in relation to our websites, and more importantly, in terms of our communication with customers. So I feel that we're well placed. And with that experience behind us, as we head into the next AMP. So what's different? As we head into AMP7, what's different about the retail price control? Well, I think the first thing is, if we remember back to AMP6, it was a simplistic cost model that was based on an average cost to serve. The adjustments for depravation were argued on a case-by-case basis. And if you remember, as well as the GBP 165 million gap that we had, in addition to that, we had a GBP 95 million special factor claim as a result of the deprivation that we had in the Northwest. And there were a number of cost adjustments in the model based across the industry. So although there was this average mechanism, it is quite hard to track in relation to the number of changes that would play through. So what's different this time? Well, it's an econometric model that has been used in terms of identifying the price control for retail. And it takes into consideration multiple factors that actually we argued for last time. So it assumes deprivation within the model, and it looks at the various different indices of deprivation across each geography. It also looks at denominator. So it essentially identifies are you providing a dual service or not. So if you remember last time, the fact that we provided a wastewater service wasn't taken into consideration in terms of the modeling. So WACCs and WASCs essentially have the same. It also looks at things such as average bill size, which, again, are important in terms of future costs and values of debt. So it's a more holistic assessment. I think one of the things that Ofwat made very clear was that it wasn't going to get into special factors this time around in terms of the modeling. And if we look at how we fared, we fared exceptionally well. So you can see there, we have the highest cost allowance going into the next AMP, and that's down to the fact that there is a much more holistic model in relation to the retail cost assessment. So look at the efficiencies in AMP7 and what do we need to deliver within that cost envelope? Well, we've identified 4 key areas of cost efficiency, the first one being debt. So further improvements that we're going to make in debt because credit sharing has been so successful, we're about to get to a multi-bureau approach. So we're going to extend our credit sharing, and more importantly, our reach. And we have some new algorithms and some new capability within our debt manager suite that we feel confident in terms of delivering that improved performance. We have a huge amount in relation to innovation, so some of the work that Simon talked about before in terms of machine learning and artificial intelligence. There is a huge amount of opportunity in relation to customer service transactions and the level of automation that can be driven out. Digital has been hugely successful for us. And again, I'll talk about that in a moment in relation to where do we see digital penetration moving to. But also, metering. So the opportunity to use much greater levels of AMR data and flexible meter reading services in terms of delivering improved efficiencies. And if we just looked at digital because that's been one of the key themes and one of the key drivers of improving costs for us over the last sort of 3 or 4 years. You can see here the number of digital billing registrations and how that has exponentially increased. We're just short of GBP 1 million (sic) [ 1 million ] by April. Trust me, I've incentivized the team accordingly to get that to start with the 1 million instead of 964,000 by the end of April. But just to give you an indication there, we launched a new app. And what I said to the team was, well, I said, an app as good as the best in terms of retail. If you have a look at a minute on your iPhones, we're currently set at 4.7 in the app store. That's pretty good for a utilities app. In fact, I'd say that's one of the best, if you want to have a look. And actually, what's encouraging is that every 8 minutes, a customer is registering for the app. And if you look at the number of payments, GBP 17 million worth of cash. And what we're finding in terms of the app is actually, this is proving to be a really, really useful cash collection tool, particularly with certain demographics of customers in relation to the nudges that we can provide and in terms of them making small but frequent payments. As well as the app store, obviously, in terms of My Account, just short of 1 million registrations, as I've said, but every 4 minutes somebody is registering for the My Account portal. So our investment in digital has really paid off, and that's been significant in terms of improving, and more importantly, reducing those average costs to serve. What I'm probably most excited about, going into the next AMP, is that the retail price control for the first time has got some real chunky and meaty ODIs, which we're really quite excited about in terms of opportunity to deliver against. So if we look at the ODI position, there were 12 ODIs from a retail perspective, 4 common, 8 of which are bespoke and 9 of which have got -- are financially incentivized, 3 of which are reputational. If we look at the P90, P10 range there, GBP 132 million to GBP 163 million. And I just thought it would be useful to just step you through some of the plans and the opportunities that therefore are there in relation to the activities. So the first one is around void, void properties. These properties are properties that are not on our billing system. And if you look here, one of the key things that we're doing is using advanced analytics to identify, again, using that credit sharing data, those customers that we think are in a property by picking up whether you may have well just asked for a loan or a mortgage or whether you may have gone to DFS to go and buy a sofa. So early credit alerts that actually somebody may will be in that property. That's then matched with the work that we've been doing in relation to land registry, where we're actually purchasing data of who actually owns the property. And you need the 2 things together, particularly in the demographic that is the Northwest, where we have a high proportion of properties that are actually rented. And to get off to a flying start, I'm really pleased to tell you that at 9:00 this morning, we went live with our new operation. We have taken a decision and the benefit of being where we are in relation to the AMP serving plan has meant that we've been able to get off to a flying start. So we've gone live with a new contact center operation, purely focused on void activity. And the benefit of doing that is that they're ring-fenced from everybody else. They can completely focus on this activity, but it also makes sure that we can make sure that they're incentivized and focused accordingly. So we're all ready to start from the 1st of April. Another Bespoke measure, and I think this ODI came out from the fact that if you look at Ofwat's assessments that they made in relation to the price review, I think there were only 4, I'm right in saying, James? A ratings that were given across the entire submissions over a plethora of tests. And I'm delighted to say that we achieved one of those A grade ratings in the area of affordability and vulnerability. And as a result of that, we've got a bespoke ODI here, looking at lifting customers out of water poverty. And that is around offering the various different tariffs that we have in relation to supporting customers with lower bills. Making sure that we're using the data that's now available to us through the changes in the Digital Economies Act, so we can make sure that we're targeting you with a tariff and that you're on corresponding benefits. So a lot of that is triangulation of data. And more importantly, working with the local and national debt advice agencies and government agencies in terms of targeting the schemes that we have in place. And again, we're confident with the suite of support that we have available and through the advanced analytics that we're going to be able to target this accordingly. Bringing down levels of water use is a common ODI that everybody has. I think Steve touched on earlier, or Jo as well, about the need to make sure that we're actually reducing what we call per capita consumption. We have a 6% improvement to make in relation to target, so we need to reduce what's actually used and consumed by customers. In the Northwest, we have one of the lowest penetrations of metering. And that's partly driven by the fact -- of 2 factors. One is it rains a lot in the Northwest. But secondly, and I think most importantly, is that customers in the Northwest want a reliable and stable bill so they can budget accordingly. So despite the fact that they may benefit what's more important to them is actually the fact that they can economize -- they can budget on a monthly basis how much their charges are going to be. As a result of that, we're the only ones in the sector, but we've introduced something called the lowest bill guarantee. So if we think you may save on a water liter, you won't pay more than you're paying now as a way of getting customers to switch and to flip. What's the benefit of that? Well, it's 21% reduction in terms of water usage if you're actually on a meter. That guarantee stays in place for 2 years. And at the point of occupancy and you move out to the property, it gives us the opportunity to then switch the customer to being a muted supply. As when we install your water meter, we're also going to be doing water efficiency audits in the home to make sure that we can check your appliances, things that we can do in terms of adapting toilets, water efficiency devices in relation to showers. So we'll give you a water meter, the lowest bill guarantee, and more importantly, make sure that you set up to actually save. As well as that, we're working on visualizing water usage. So as you know, there's been a huge amount of focus and attention in terms of smart metering in the energy sector. And what we're trying to do is, again, use some innovation in terms of giving customers their ability to visualize in their own home how much water is being used. And more importantly, that ability to compare them to others as a way of nudging them to make improvements. If we look at C-MeX and what's different from -- about SIM to C-MeX, if you remember, SIM as the old measure was made up of 75% satisfaction. So if you contacted us, you then went into a survey, and 75% of the score was based on actually your perception of your service having interacted with us. And a further 25% was made up of quantitative data, which was both complaints and unwanted contacts. Well if we look at C-MeX, and there have been some changes from Ofwat between interim and final determination on the measure. But actually, the weighting of that is now 50% on a contactor satisfaction survey, very similar to the way SIM was built. And 50% is more of a random survey where they will stop people in the street to ask them what do they think of United Utilities. And if we look at D-MeX, D-MeX is made up of a qualitative element. So 50% qualitative based on transactions that you complete for developers. And the other 50%, again, is a bit similar to how SIM used to be in that 50% element of C-MeX, which is an interaction with you to ask you your perception of service once you've dealt with us. So if you were to look at how we will be doing so far, well, in the C-MeX's another year, I'm delighted to say we've just finished quarter 3 in first position out of 17 companies. We're scoring and performing well. We've got a C-MeX action plan in place, as you would expect us to do. But we are building on the strong platform that we saw from SIM as we move into the next AMP. If we were in AMP7 now, as I sit currently, both on a combined position, for both the contactor satisfaction survey and the random survey, we sat in a combined position of fifth out of 17 and anything above 9 puts you into reward territory. If we look at D-MeX as a measure, I just thought I'd show on here is a graph that -- and the reason I put on here is it's important in relation to understanding the quantitative element that is D-MeX, you can see after times that actually things are exceptionally busy up in the Northwest in relation to development. So a huge amount of opportunity that, that, therefore, creates in terms of improving service level. And what we've done is we took the decision to move developer and metering into United Utilities customer services. Why? Well, because actually, if you think about what we've managed to deliver on SIM and the step change we've been able to make in relation to domestic contact, we want to make exactly the same improvement in relation to developers. And we've already started that transformation plan and a step change in relation to reducing service levels. So improving the quantitative element, but also a huge amount of process design and segmentation to improve the service, and more importantly, the perception of service when you're contacted by Ofwat to ask you what you think of the service that you've actually received. So again, we're confident that as we're taking those steps and changes and moving it into a customer service organization that the incentives will follow through. Somebody asked a question before about leakage, and I think it's really important that we consider leakage alongside billing. Why do I say that? Well, actually, leakage is about unaccounted for water. And that's as much about have you got everything on your billing system that you should possibly have because if you haven't, that then shows its leakage. So the other benefit of moving the metering and developer services into the customer service and revenue world is we can make sure that we've got everything picked up on the billing system and billed. But also one of the things that we're really keen to do, as we went into AMP7, was address the fact that in the nonhousehold market, we have seen an increase, as has everybody, right across the sector in the number of properties that are identified as being empty and commercial. So we've come up with a cost recovery mechanism. It's a bespoke ODI that actually incentivizes the retailer to find those properties, and more importantly, to get them occupied within the market. So this is a pass-through incentive. But the benefit to us is both in relation to revenue, but also in relation to making sure, from a leakage perspective, we have everything billed and on the system, and therefore, we can account for all of the water that is being used. Steve touched on before, priority services, and I've taken an opportunity to show this ODI. It's not a financial ODI, it's a reputational one. But 2 words, it's exceptionally important. Why? Well, we have a huge need in the Northwest in terms of making sure that we tailor and adopt our services in relation to those customers who may find themselves in vulnerable situations or circumstances. And I think one of the things that we really learned on the back of Franklaw was that we needed a better priority services scheme. I'm really pleased to say that we are leading in the sector in relation to the number of registrations. There are over 100,000 customers now registered on the priority service scheme, and we continue to target customers every single day to get customers to work -- to get customers to sign up. But we also launched the industry data share. So the benefit of that being now is that actually, if you live in the Northwest, we can share your data with Electricity Northwest, who is the electricity DNO in our geography and also then with us. There's 2 benefits. One is, essentially, if you're looking after somebody who is vulnerable or maybe vulnerable yourself, you only have to register with one utility, not multiple. And secondly, because in times of storms or events, we can often be responding jointly together as we were during Storm Ciara. That's now been taken by the water sector. That data sharing is now rolling out right across the country. I'm delighted to say it's also been picked up by the U.K. Regulatory Network as best practice. We presented to them 2 weeks ago because actually this is a model that many see being able to be utilized across all regulated entities. The additional element to this accreditation -- to this ODI is that each company has been charged with achieving the BSI accreditation in relation to inclusive service provision. I'm delighted to say that last Friday, we achieved our accreditation. We're the first water company to do so under this model. And that's a testimony to the work that's gone in from everybody right across the business in terms of making sure that our services are really inclusive. So it's one of those areas that even though it's a bespoke ODI -- sorry, it's a common ODI and hasn't got a financial incentive attached to it, it's really important because it says a lot about the way that we want to, and we do indeed deliver our service. So why do I feel that we're well placed for the next AMP? Well, if I look at it from a service perspective, we've seen rapid improvement in relation to customer service, the biggest and most significant improvement of any of the water companies over the last AMP. If I look at this last quarter, we're in industry leading -- in fact, we're in first position. What I have just shared with you in relation to priority services, both in terms of the data share and also our recent accreditation. And I suppose, last but not least, is the Institute of Customer Service Mark with Distinction. And you might sit there and say, well, isn't that just another award? Isn't that just another accreditation? There are only 13 brands in the Northwest. Even John Lewis, First Direct and Mercedes don't have that level of assurance. And so it's really, really important to us because actually, it means that we're well placed as we enter the next AMP and the confidence that we have about continuing to deliver exceptional customer service. If I look at cost, we've delivered a GBP 25 million improvement year-on-year in terms of the regulated bad debt charge. We're just short of 1 million customers now registered for digital transactions. And the cost out that we've managed to deliver over AMP6 means that we're confident as we head into AMP7 that we can deliver. And I suppose, last but not least, and as I said, we're excited about the ODIs. This is a real opportunity for the retail team. We've brought in some fantastic skills and expertise 4 years ago when I came into the role. And actually, we're really excited about the ODIs and the opportunities that presents to actually deliver some value for the business, for our customers and for shareholders. But my job is not just about customers, my job is also about people. For my husband, who's an accountant, it's his idea it's the worst job in the world because it's all about people. And people -- and sometimes people say to me, isn't that a strange combination, customer services and people. How do those 2 things go together? Well, it's not. Because at the end of the day, it's all about service. And we can have the best assets, we can have the best technology, we can have the best processes, but they're as good as the people that operate them. And the real advantage of having both customer services and people together is that we can make sure that we are focused on our own staff, and that more importantly, they're motivated and inspired to deliver. So as Steve said right at the beginning, we've just been identified in Glassdoor as the top 20 best places to work. What I like about Glassdoor is this is not our view of the world. For any of you haven't heard of Glassdoor, it works exactly the same as Tripadvisor. Every organization is on that. I encourage you to go and have a look. It's very, very transparent in what it says. But actually, its current employees, past employees and also employees that may come to have an interview with you, giving their perception of you as an organization. They ought to give feedback on Steve as a CEO and what they think of him. I'm pleased to tell you that he scores exceptionally well. But actually, if you look at us as a business, we scored us #19. And actually, if you look, there's nobody else near us in terms of utilities till you get to just over 50. Retention is really important because we need to make sure that we've got a skill base that is obtained, that is developed, and more importantly, we're not seeing a huge amount of churn. So people are actually focused on the key outcomes that we need to deliver. And not just that, that they're truly engaged. We have some of the highest levels of employee engagement out there, not just across the sector, but actually against U.K. high-performing norm companies because that's actually where we compare ourselves. And engagement is really, really important. Why? Well, I can talk about engagement is your bank of goodwill. And when you operate a utility company, you need to have a bank of goodwill because there were times that you need to draw down on that bank, that might be incident situations, that might be additional delivery that we need to make sure that we can deliver some of the outcomes that we've outlined today. So having an engaged workforce and a stable workforce is exceptionally important. And we've invested hard and trained to make sure that we have capable employees. We opened our state-of-the-art training center in 2015. I'm really pleased to tell you that I'm the only government approved apprentice center in the water sector. Why is that important? Well, that means I don't have to treat the levy, the apprentice levy as a tax, I can draw down against it. We are the only one in the water sector that actually has that status. And we're rated as Good by Ofsted. So it's a fully Ofsted accredited facility. We've delivered 40,000 training days in-house. Again, that's important because of that ability to pull down on the levy. 70% of which we've managed to deliver in-house to those exceptional standards. But we're also investing in early careers. So we have a fantastic apprentice and graduate program. But actually, it's not just about investing in our skills. I go back to what I said about deprivation. We have a significant number of young people in the Northwest who are not in education or training, who we've been working with to put through accelerated development programs to get them into work. So to give you an indication, we took a cohort of 60 people last year, who fell into that bracket, and 59 of them are now in long-term employment. So we're making sure that we're using the facilities that we've got to invest in the wide economy in the Northwest as well as our own employees. We're also making that step change because our training centers whilst they're expertly equipped, and you'll see a little bit later just in terms of being able to visualize the training centers we have, we also recognize this is about investing in the skills that we need for tomorrow as well. So we've been making a set change in terms of some of our apprentice schemes, new digital and automation, apprenticeships and new data analytic skills, again, we'll be the first ones in the northwest to offer that through our Ofsted registered facility. But it's also about making sure that people are motivated to deliver. And the targets that we have are cascaded from the boardroom, right down to the front line, whether that be people in our contact centers, people out there in the field. People know what they need to contribute, they know the targets that we're going for, and more importantly, they know the role that they play within them. We think that we have an employee bonus plan that's quite unique in the sector. Why do I say that? Well, it isn't a flat fee that you get if we achieve our stretch targets, it is variable based on your pay and your grade. So right at the front end, if you're in the call center, you can achieve 7.5% bonus if we achieve our stretched targets, and that's profiled and prorated right through the organization. So some real meaningful targets for people in relation to making sure that we actually deliver. What's really important, though, as we head through the next AMP is that everybody knows where they fit in and more importantly, the role that we play? We've worked really, really hard to make sure that the business plan that we've got has been cascaded and communicated to everybody, more importantly, everybody's targets are aligned. And we've got a new performance management process that goes live as well [indiscernible] shortly at the end this month, that really focuses on regularly reviewing performance and deliverables to make sure that we're all on track for delivery.