At Centrica we live by our Purpose – ‘energising a greener, fairer future’ – because we believe in energy that works for colleagues, customers and communities, today and into the future. It’s why we exist. Our strategy is driven by our Purpose, and our enduring values underpin how we operate.
We are a uniquely integrated energy company. When it comes to energy we make it, store it, move it, sell it and mend it.
As we look to the future, Centrica has a crucial role in the energy transition, we’ve committed to investing between £600m - £800m a year until 2028 in renewable generation, security of supply, and our customers.
In doing so, we can add value for customers, colleagues, communities and shareholders alike.
Centrica in numbers
21,000
Employees worldwide
7,000
Engineers
7,228
Volunteering days
Top50
Ranked in The Times Top 50 Employees for Gender Equality
13GW
Route to market for renewables under our management
Our strategy is driven by our Purpose of energising a greener, fairer future for colleagues, customers and communities.
Our Strategy
Since 2020, Centrica has been on a journey to simplify and de-risk our business, strengthening our balance sheet and delivering material performance improvements along the way. In our Interim Results announcement in July, we laid out our disciplined capital allocation framework, which comprises five key elements:
1. Sustainable earnings
We expect to deliver £800m of operating profit from our Retail and Optimisation businesses by 2026, with material cash generation expected from our Infrastructure businesses over the medium-term.
2. Maintaining a strong balance sheet
We aim to maintain a Net Debt/ EBITDA ratio of <1, which provides enough of a buffer to ride out any energy market volatility and providing flexibility to invest in the future and maintain and grow our shareholder distributions.
3. Progressive dividends
We maintain a progressive dividend policy and expect dividend cover from earnings to move to 2x coverage over time.
4. Investing for value
We aim to deploy £600-800m per year to 2028, focusing on assets that generate attractive returns, complement our existing capabilities, provide balance to the portfolio, and align to the needs of the energy transition.
5. Returning surplus capital
In July 2023, we increased our share buyback programme to £1bn since November 2022. Any future distributions will be reviewed against our revised capital framework and future outlooks.
Our Strategic Framework
Infrastructure
Investing to build a low carbon, reliable energy system including power generating renewables, flexible peaking generation and energy storage through batteries
Retail
We remain relentlessly focused on providing a leading customer service and experience, helping them to save money and decarbonise through innovative offerings.
Optimisation
We are supporting the responsible buying and selling of energy, managing risk across our business and accessing value from green generation in our trading business while continuing to build out the flexibility required for the future energy system.
Evolving market conditions
After a tumultuous year in UK energy markets, 2023 saw market volatility return to pre-energy crisis levels, although energy prices remained relatively high. Consumer energy bills were somewhat shielded through the Energy Price Guarantee during the first half of 2023. Macroeconomic conditions, including elevated inflation and interest rates, negatively affected asset returns and capital costs.
How we’re responding
- Our vertically integrated model has allowed us to capture value across our business, demonstrating the benefits of having a balanced and diversified portfolio
- The progress we have made in strengthening our balance sheet will allow us to continue to invest in a diversified asset portfolio despite the challenging investment environment
- Our strategy is designed to remain robust under all market conditions, and positions us for growth and value creation
The drive to net zero
How we're responding
- We committed to an ambitious investment programme that aims for >50% of total capex invested in green taxonomy investments through 2028, thereby underpinning our transition to net zero
- We created a new business intended to be a one-stop green home services shop for residential customers
- We are working with partners to explore decarbonisation opportunities for our existing conventional power generation and molecule storage assets
Enabling system flexibility
How we're responding
- We create additional value for renewable asset operators and investors through our advanced trading and optimisation business
- We help customers to reduce the cost and carbon footprint of their biggest household energy devices, like electric cars and home batteries, through British Gas and Hive’s myriad of smart energy propositions
- We are investing in batteries and gas peakers to meet the near-term flexibility needs of the grid, and looking into other forms of energy storage that will meet the needs of the future energy system.
Opportunities to deliver value with AI
How we're responding
- We appointed a Chief Data Analytics Officer, who will work across the business to identify and execute on opportunities that harness the power of data to personalise our propositions and service delivery
- We are closely collaborating with leading technology companies to implement AI tools and systems across our business, helping our colleagues to do more and better for our customers
- We are in the midst of a digital transformation that will fundamentally change the way we work in the digital environment, providing material cost savings to the business and unlocking new capabilities needed for future propositions
Also in this section
Values and Culture
Our Values remain firmly embedded in who we are and give direction to everything we do.
Our Code
Each year, our people undertake mandatory training on Our Code and are required to make a declaration committing to uphold and abide by Our Code.
Our Leadership
Our Board of Directors and Senior Executives bring together our capabilities and strengths to satisfy the changing needs of our customers.