#1Cadent Your Gas Network Investor Presentation August 2022 b 1 GAS#2Disclaimer By attending the meeting where these materials are presented, or by reading these presentation slides, you agree to be bound by the following limitations: These materials have been prepared by Quadgas Midco Limited and its subsidiary companies Cadent Gas Limited, Quadgas Finance plc and Cadent Finance plc (the "Group" solely for use by persons to whom these are provided in connection with a general business update by management. These materials contain projections and statements about future events and expectations that are forward-looking statements. These statements typically contain words such as "expects" and "anticipates" and words of similar import. 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The distribution of this document in other jurisdictions may also be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.#3Presenting today Tony Bickerstaff Chief Financial Officer Dr Angie Needle Director of Strategy Tom Sacker Director of Treasury, Corporate Finance and Planning Mark Belmega Director of Sustainability and Social Purpose 3#4Strong performance in an established regulatory environment ► Successfully delivered our first year of RIIO-2 ▸ We were successful in our appeal to the Competition and Markets Authority winning 3 out of the 5 of our chosen grounds of appeal Transformation continues at pace following separation from National Grid. Our RIIO-2 business plan delivers frontier performance Customer performance continues to improve, with our North West network now delivering frontier performance ▸ Well insulated from inflation, the rise in gas prices and bad debt through a comprehensive package of regulatory protections Working at pace in support of our net zero ambition including a Hydrogen D Village 40 Leading the sector on ESG with an investment programme that supports CO2 reductions and significant on-going contributions to our communities via the Cadent Foundation that leads the sector in terms of scale and ambition Cadent Gas Ltd AD 百合 U#5Cadent Your Gas Network 1. Cadent overview b keeping people warm, while protecting the planet Tony $125 LO 5#6We are the largest gas distributor in the UK We own and operates four of eight Gas Distribution Networks (GDNs) in the UK Following production and importation, all gas in the UK passes through National Grid's national transmission system, before entering one of the eight GDNs Shippers pay GDN operators to transport the gas to homes and businesses Transmission National Grid Distribution Cadent & Others Supply Other Companies Terminal Compressor LNG storage נון Local distribution zone offtake Pressure Industrial reduction station Governor Commercial Domestic Biomethane CO 6#7We operate and maintain the network, we don't own or sell the gas • What we do What we don't do Our strategic objectives Maintain, repair & replace gas pipes and infrastructure to ensure the safe and reliable flow of gas Lead the way for industry on the future potential of hydrogen & tackling climate change as per our Environmental Action Plan ('EAP') Connect homes, businesses & renewable gas suppliers to our network Provide extra care for those who might need it in a gas emergency Manage the National Gas Emergency Service for all gas customers in the UK. In 2021/22, we answered 1.4m gas emergency calls • . We don't produce gas We don't own or sell the gas that flows through our pipes We don't repair gas appliances We don't send out gas bills. The cost of our services is included in the customers' gas bill Deliver brilliantly for customers today Prove the technical and safety case for hydrogen Determine the economic and social case for hydrogen Become a voice for hydrogen Make our business hydrogen ready 7#850% of the UK is connected by our network Coc North West 2.7m homes & businesses 34,000km of pipe Around 40% of the gas distributed into the North West is used by businesses & for industrial purposes. This is higher than any other GB GDN. Carlisle Newcastle- ° upon-Tyne 1.9m homes & businesses 24,000km of pipe West Midlands Centred on the UK's 2nd largest metropolitan area of Birmingham & incorporating a number of smaller urban areas. Blackpool North West Liverpool Manchester о Warrington Middlesbrough о Leeds о o Hull Bradford • Sheffield Lincoln о Stoke-on-Trent Nottingham Derby Wolverhampton о Birmingham Leicester Eastern Coventry Eastern North London 2.2m homes & businesses 21,000km of pipe Largest population of high risk multi-occupancy buildings in the UK. Many layers of buried infrastructure, going back hundreds of years. 4m homes & businesses 52,000km of pipe A geographically diverse network, now to be separated into 2 networks of equal size; East Midlands and East Anglia West Midlands Worcester о Gloucester Bristol ° Luton о Oxford ° Grimsby Norwich Cambridge Ipswich Southend-on-Sea North London London 8#9Our revenues are supported by significant investment in the asset base 剑 2 £1,984m revenue £ £685m operating profit £11.0bn Regulatory Asset Value £ (RAV) Network reliability: 99.9% 1,679km mains replaced З 98.2% emergencies responded to within 1 hour 5,945 employees D >£5bn TotEx allowed for in RIIO-2 9#10Strong financial performance is underpinned by regulatory protections 31 March 2021 Full Year Revenue £2,075m Operating Profit £902m Capital Investment £1,024m RAV £10.2bn 31 March 2022 Full Year Revenue £1,984m Operating Profit £685m Capital Investment £725m RAV ₤11.0bn Year on year change due to: Reduction in connections and diversions income associated with HS2, impacts profit but no impact on cash generation Higher depreciation from investment. Higher shrinkage costs and exit capacity charges, which will be recovered in subsequent years Repex volumes and unit costs reducing in RIIO-2 relative to the exit run rate from RIIO-1 Growth from inflation and investment 10 10#11Cadent Your Gas Network 2. Regulatory Environment Tom b 000 1 $125 11#12Stable regulatory framework and predictable cashflows Monopoly Regulated monopoly holding essential infrastructure within the UK energy landscape Regulation Well established and transparent regulatory regime Operations Improving customer performance Cadent Your Gas Network Predictable Cash Flows Inflation-linked predictable cash flow Management Experienced management team 12#13Continued stability of regulatory framework with RIIO-2 now fully established The current regulatory cycle is RIIO-2, which came into effect in April 2021 and lasts for five years through to March 2026 Revenue = Incentives + Innovation + Outputs 98% of our revenue is regulated. Indirectly, customers pay for our services through their gas bill. We get extra money for good performance. Poor performance results in us being penalised. We can bid to invest in new technologies & techniques to help improve efficiency & customer experience. Our commitments, the things we must do as part of our price control. 13#14First year of RIIO-2 shows strong regulatory performance We have met 69 out of 70 annual targets across our networks and we are on track to deliver our 5 year output targets Customer scores averaged 9.05 out of 10 and continue to improve across the networks with North West and West Midlands with strong performance relative to peers We are delivering at the level of totex that has been allowed; delivering 1,679km of mains replacement We have maintained outstanding levels of safety and reliability by rapidly responding to emergency gas escapes and keeping 99.9% of customers on gas. We have reduced our shrinkage by 3% and continue to accelerate our environmental action plans 14#15Cadent Your Gas Network 3. Financing Structure & Credit Highlights Tom 1 b $125 15#16Simple corporate structure owned by a diverse and experienced shareholder group The Quadgas Group is owned by a long-term experienced Shareholder group consisting of: Macquarie Infrastructure Real Assets • China Investment Corporation • Allianz • Qatar Investment Authority • Hermes • Dalmore Capital • Amber Infrastructure Quadgas Finance Plc (MidCo Issuer) Quadgas Holdings TopCo Limited (TopCo) Quadgas Investments BidCo Limited (BidCo) Quadgas HoldCo Limited [HoldCo) Quadgas PledgeCo Limited (PledgeCo) Quadgas MidCo Limited (MidCo) Cadent Gas Limited (OpCo) Cadent Finance Plc (FinCo) Cadent Gas Pension Trustee Limited Cadent Services Limited (PropCo) Cadent Gas Pension Services Limited Cadent Gas Pension Property Company 1 Limited Cadent Gas Pension Property Company 2 Limited 16#17Established debt structure with clear creditor protections Quadgas Hold Co Security Quadgas PledgeCo Quadgas Mid Co RCF £200m DSCR120m Quadgas Common Terms Agreement "MidCo" Borrowings: £2.27bn Quadgas Finance plc Guarantee Cadent Gas Ltd (Licence Holder) "OpCo❞ RCF £500m Borrowings: £6.97bn Cadent funds in the capital markets both through the operating company (for leverage up to 65% of RAV) and for leverage between 65 and 85.5% Net Debt to RAV, through an intermediate holding company, Midco which benefits from Whole Business Securitisation (WBS) structure to protect investors Cadent Finance is 100% owned by Cadent and is incorporated to raise borrowings in public and private markets for OpCo. Quadgas Finance is 100% owned by Quadgas Midco and is incorporated to raise borrowings in public and private markets for Midco. Opco and Midco benefit from their own operational and financial covenants. Revolving credit facilities at each level support liquidity and Midco has a debt service reserve facility used as liquidity support to cover 18 months of Midco debt service costs Combined £9.2bn of external debt (Mar 2022), including index linked debt (direct or synthetic) £4.3bn of debt issued and facilities replaced since separation (to March 22) Cadent Finance plc Ratio tests Quadgas Mid Co Trigger Default 31 Mar 22 Cadent Gas Net debt/ RAV 85.5% 92% 81.5% Bond Programme Default 31 Mar 22 Adj. ICR 1.1x 1.0x OpCo 65% 70% 2.1x 61.1% Net debt/ RAV 70% 61.1% net debt/ RAV 17#18£ millions Cadent has diversified its sources of funding across the major debt markets 1800 1600 ■Cadent Bank Debt ■Midco Bank Debt ■Cadent EIB Midco PP Cadent USPP ■Midco USPP ■Cadent MTN Midco MTN ■Cadent MTN PP Cadent CPI Swaps 1400 1200 1000 800 600 400 200 0 1 • Opco and Midco have a diversified investor base - with debt issued in GBP, USD, EUR and JPY (all currency swapped to GBP). Majority of debt issued in fixed (c. 63%) and index-linked (c. 35%) formats £1.2bn of existing debt to refinance by 2024 ■Fixed Rate Debt • Used the Transition Bond Framework to issue c. €1.1bn in 2020 and 2021. Sustainable debt markets continue to be a focus of the debt mix. ■Index Linked Debt (after swaps) ■Floating Rate Debt 18 2043-49#19Solid investment grade credit ratings provided by the 3 major rating agencies Business highlights Stable highly regulated environment Cadent creditor protection 70% Net Debt / RAV default covenant ☆ Predictable inflation linked cash flows Regulatory requirement to maintain Investment Grade credit rating D ☆ Revenue insulated from volume and commodity risk Leverage and interest cover ratio tests applying to consolidated group debt 色 Payments come from gas shippers, not the end customer - no consumer bad debt risk Limitations on group additional indebtedness, debt maturity and interest rate risk apply on consolidated basis to Cadent where most of the debt resides MOODY'S Baa1 (Stable) Corporate Credit Ratings Fitch Ratings BBB+ (Sta) (Issuer Default Rating) S&P Global Ratings Opco: BBB+ (Stable) Midco: BBB+ (Stable) 茴 19#20Cadent Your Gas Network Easier 4. Our approach to being Warmth a force for good Mark Fairer Greener Opportunities Society Cartone ZEN Quotes from call handlers at Cadent Gas 40 20 20#21Driving the transition to net zero, whilst improving the natural world Cadent Your Gas Network Safety & Sustainability: Our focus now and for the future Safety & Sustainability report 2019/20 2022 We will operate a fully electric company car scheme and a zero emissions first responder vehicle fleet by 2026 2026 We will be accredited to The Wildlife Trust Biodiversity Benchmark across all of our key sites 2026 We will procure 100% certified renewable energy to meet our energy needs Forecast Scope 1 Shrinkage Emissions Reduction (1000 x tCO2e) 1400 1200 1000 800 600 400 200 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2026 We will minimise the use of first time aggregate and ensure that less than 5% of our waste is sent to landfill 2030 We will reduce our methane emission rates by more than the UK's 30% target 2035 We will demonstrate hydrogen at scale through a range of initiatives 21 21#22Leading the sector on being a force for good Where we help people stay warm and independent in their homes, no matter their personal circumstances Easier Warmth Cadent DANGER SAFETY WARNING DO NOT USE Cadent 4 Four Estates A local charity helping local people Community Projects and Initiatives For adults, for children, for thriving communities 4 Foundation CO SAFETY emmaus £8.7m awarded to charitable endeavours since the launch of the Cadent Foundation 20,000 Customers referred for additional services beyond the meter 2-million Face to face conversations to raise awareness of the Priority Services Register (PSR) 1-million Households in fuel poverty supported though a range of interventions 2 days / year Of volunteering leave offered to all employees £400k Cadent's fundraising target for Emmaus UK 250,000 CO detection alarms provided free those most at risk £84-million Social benefit delivered in 2021/22 22#23Cadent Your Gas Network 5. Future of Gas Angie H₂ Hydrogen H 280 emission 23#24The ambition of UK Government has solidified over the past year 6th Carbon Budget (Dec 2020) UK Hydrogen Strategy (Aug 2021) Heat and Buildings Strategy (Oct 2021) December 2020 The Sixth Carbon Budget The UK's path to Net Zero HM Government UK Hydrogen Strategy H2 Hydrogen H Cinate Committer August 2021 CP 475 HM Government Heat and Buildings Strategy Presented to Parliament by the Secretary of State for Business, Energy and Industrial Strategy by Command of Her Majesty October 2021 Buildings Transport nard and manaous Agricutum, and one, and use change and foreby and waste 28 454.8 MtCO,e 24% 30% 24#25And launched a new British Energy Security Strategy Summary of UK Government Energy and Security Strategy H Hydrogen Now Financial support framework for production published Low carbon hydrogen standard First allocation to electrolysis later in 2022; operation by 2025 Net Zero Hydrogen Fund (£240m) 2030 Increased target from 5GW to 10GW; 5GW from electrolysis 2050 240-500TWh supply New licensing rounds Oil & Gas . Review of shale gas safety . Phase out of Russian oil and coal by end 2022 20-30MT CCUS >40% reduction in gas consumption 'Net Zero compatible' oil and gas sector Nuclear RAB model for new nuclear GB Nuclear Vehicle being set up • Up to 8 new reactors progressed • Up to 24GW of capacity +++ Wind & Solar Contracts For Difference framework well established • Up to 50GW of offshore wind >100GW offshore wind • Up to 70GW of solar by 2035 Energy System • New 'Future System Operator in place by 2024 Responsibility for strategic planning across gas and electricity and operations for electricity • End sale of gas boilers in the 2030s Net Zero by 2050 25 25#26We are planning five main schemes that will enable the distribution of hydrogen from production sites and pave the way for conversion of gas networks if required Cumbria BARROW Carlisle ° HyNet NW Blackpool Newcastle- upon-Tyne TEESIDE Middlesbrough ECH2 East Coast Hydrogen Liverpool Manchester Warrington Leeds о Bradford ° Sheffield Lincoln о IDC Funded Hydrogen Production Projects Future Hydrogen Production Clusters Current Clusters I Future Schemes MILFORD HAVEN Future Scheme (West) o Hull • Grimsby Stoke-on-Trent Nottingham Derby RATCLIFFE-ON-SOAR Wolverhampton о Birmingham Leicester ° о Worcester Coventry BACTON Norwich LOWESTOFT Cambridge Ipswich Hydrogen Valley Gloucester о SIZEWELL Luton Oxford o Bristol O SOUTHAMPTON 8 Portsmouth London Southend-on-Sea о THAMES ESTUARY & ISLE OF GRAIN Capital H 26#27We continue to demonstrate that the current gas network and appliances can take a blend of hydrogen Blending gas up to 20% Minimum disruption to customers Because no appliance changes Keele and Winlaton HyDeploy Ideal זין 27 22#28Whitby Your Hydrogen Village Home FAQs News About Contact Newsletter sign up Reducing heating emissions in Whitby, Ellesmere Port The UK is on an important journey to make heating more environmentally-friendly. Bringing low-carbon hydrogen to heat homes and businesses is the next exciting milestone. Cadent Your Gas Network British Gas Cheshire West and Chester In 2025, the first UK village will swap from natural gas to hydrogen. This exciting programme will demonstrate how the rest of the UK can become more environmentally-friendly when it comes to heating and cooking with gas. 28#29Strong performance in an established regulatory environment ► Successfully delivered our first year of RIIO-2 ▸ We were successful in our appeal to the Competition and Markets Authority winning 3 out of the 5 of our chosen grounds of appeal Transformation continues at pace following separation from National Grid. Our RIIO-2 business plan delivers frontier performance Customer performance continues to improve, with our North West network now delivering frontier performance ▸ Well insulated from inflation, the rise in gas prices and bad debt through a comprehensive package of regulatory protections Working at pace in support of our net zero ambition including a Hydrogen D Village 40 Leading the sector on ESG with an investment programme that supports CO2 reductions and significant on-going contributions to our communities via the Cadent Foundation that leads the sector in terms of scale and ambition Cadent Gas Ltd 29#30Q&A ? 30#31Cadent Your Gas Network Appendix 31#32Customer bill breakdown 2021/22 Cadent customer bill breakdown 2021/22 Performance improvement Incentives £2 Optimising our performance and putting the customer at the heart of everything we do. Operating and maintaining the network £16 Operating and Maintaining the equipment and infrastructure to transport gas to you safely and reliably today. Cadent average domestic bill is £132, that's 36pper day Taxes, Licence & other fees £31 Taxes, Licence fees for industry regulation and business rates paid to local Government. Network Investment £64 Repaying the cost of past and present investment replacing old assets to ensure the safe and reliable flow of gas long into the future. Providing a 24 hour emergency and repair service £19 Taking your calls, attending and repairing gas emergencies and escapes and making safe. In 2021/2022 a typical domestic customer paid £132 towards to the cost of our services, down from £158 at the start of RIIO-1 adjusting for the impact of inflation. Cadent does not decide amounts to charge end customers so the domestic bill impact is illustrative as our contribution to supplier costs. 32 32#33Corporate Governance at Cadent The Board's philosophy is to uphold the highest standards of corporate governance appropriate to our size, the essential public service we provide and the regulatory framework that applies to us Board Composition 17 Directors • • Non-exec Chairman (also SID) 2 further SIDS CEO; CFO; COO 11 Shareholder-nominated Directors 4 alternate Directors • Supported by General Counsel/Company Secretary • 5 Sub-Committees - Safety, Sustainability, Audit & Risk, Remuneration and Nominations 2 Steering Committees - Finance and Public Inquiry and Related Matters Advisory Board to Cadent Foundation Board Effectiveness Regularly evaluated; supported by independent third party 2020 review Safety & Sustainability Committee divided into two separate Committees; Finance Committee reconstituted as Steering Committee Structure and flow of Board agendas and papers reviewed to ensure information enables appropriate scrutiny and enquiry Appointment of independent expert advisors to the Board to consider Cyber matters Driving Performance and Culture Targets set for Cadent colleagues, convey our expectations on delivering our RIIO-2 commitments for the benefit of our customers and wider stakeholders Short Term Incentive Plan measures include Customer Excellence; Economic Outcome, Safety, Sustainability and Business Outcomes Long Term Incentive Plan measures, applicable to senior managers/ executive team, include delivery of RIIO-2 Customer Strategy, Economic Outcomes, Sustainability Commitment, RIIO-2 Commitment and Energy System Transition 33 33