Slide 1: Results Presentation
Results Presentation TAON7 dd IBERDROLA
Slide 2: Legal Notice: Disclaimer
Legal Notice DISCLAIMER This document has been prepared by Iberdrola, S.A. exclusively for use during the This document and the information presented herein was prepared by Iberdrola, S.A. solely presentation of financial results of the 2019 fiscal year. As a consequence thereof, this with respect t
Slide 3: Legal Notice: Forward-Looking Statements
Legal Notice FORWARD-LOOKING STATEMENTS This communication contains forward-looking information and statements about Iberdrola, S.A., including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operati
Slide 4: Highlights of the Period
Agenda Highlights of the Period 4
Slide 5: Strategic positioning
Strategic positioning FY 2019 results reflect two decades anticipating the energy transition: Leader in renewables Presence in high rating and smart grids Growth Stability countries Vision and Execution Diversified mix of Proven expertise and businesses and geographies successful track record Predic
Slide 6: Highlights of the period
Highlights of the period Accelerating the delivery of our plan: two years ahead Record EBITDA exceeding EUR 10 bn for the first time (EUR 10,104 M) Gross Investment increases by 32%, up to EUR 8,158 M 5.5 GW installed in 2019, with 9 GW additional already under construction Maintaining financial str
Slide 7: EBITDA
EBITDA EBITDA reaches EUR 10,104 M (+8.1%)… EBITDA by business Networks • Brazil: increased revenues driven by regulatory frameworks and demand • UK: higher income due to larger rate base Generation & Supply +21.1% Renewables 24% • New capacity in all countries: +2.8 GW y-o-y • Wind: Higher offshore
Slide 8: Gross Investments
Gross Investments Gross Investments acceleration: +32%, driven by networks and renewables… Gross Investments growth trend FY Gross Investments by business Corporate & other Generation & Supply 2% +0.7% +32.2% -9.4% 13% +27.3% Networks +21.6% 44% +18.5% 8,158 M EUR +1.7% Renewables +84.8% 41% 3M 6M 9
Slide 9: Investments: Generation capacity
Investments: Generation capacity More than 9 GW1 already under construction… +0.5 GW +1.2 GW +3.0 GW +2.8 GW IEI +1.0 GW +0.5 GW …with a diversified pipeline of more than 40 GW 1 Installed by 2022 9
Slide 10: Investments: Networks
Investments: Networks Increasing regulated networks assets up to EUR 31 bn (+6%) in 2019… New rate case in Maine effective March 2020 RIIO-T2 under discussion. Business plans submitted to Ofgem. In place in 2021 Significant progress made in NY settlement discussions for rates RIIO-ED2 under
Slide 11: Cash Flow Generation
Cash Flow Generation Maintaining financial strength due to cash flow generation, up 10%… Operating Cash Flow (FFO1) +10% 8,060 7,328 2018 2019 1 FFO = Net Profit + Minority Results + Amortiz.&Prov. – Equity Income – Net Non-Recurring Results + Fin. Prov.+ Goodwill deduction + Dividends from companie
Slide 12: Asset Rotation Plan
Asset Rotation Plan …and the execution of asset rotation: on top of EUR 3.5 Bn in 2018-2019… Asset Rotation 2018-Q1 2020 Other non-core Spain 0.7 East Anglia One 1.7 (Minority Stake) Siemens-Gamesa 4.6 (Minority Stake) 1.1 EUR Bn US gas business & 0.3 Gas contracts UK conventional 0.1 0.7 generation
Slide 13: Shareholder remuneration
Shareholder remuneration Proposed supplementary remuneration of EUR 0.232/share, to reach a total dividend of EUR 0.40/share (+14%1)… Interim remuneration2 EUR 0.168/share (paid on February 5th 2020) Supplementary remuneration + EUR 0.232/share Subject to approval at AGM (payable in July 2020) Total
Slide 14: 20 years focus on ESG criteria
20 years focus on Environmental, Social and Governance (ESG) criteria Leveraging on our leadership on sustainability and ESG… Shareholders Employees Society …with full commitment on ethics, transparency and corporate governance, reinforced by the inclusion of Sustainable Development Goals in our byl
Slide 15: ESG: Shareholders
20 years focus on Environmental, Social and Governance (ESG) criteria Shareholders • Total shareholder return +37% • Second company in the IBEX35 with more women • 74% quorum in the Annual General Meeting on the Board of Directors and third in percentage with all proposed resolutions approved by of
Slide 16: ESG: Employees
20 years focus on Environmental, Social and Governance (ESG) criteria Employees • 3,481 new hires in 2019 (~5,000 in 2020) • Social dialogue: 36 labour agreements • ~55 hours of training per employee • Work-life balance initiatives • Supporting ~900 students taking postgraduate • 99% of workforce wi
Slide 17: ESG: Society
20 years focus on Environmental, Social and Governance (ESG) criteria Society • 110 grCO2/kWh emissions, two-third less of our • Included in Bloomberg’s “The Green 30 for 2020” competitors in Europe • S&P Global Platts Energy Transition Award • 10% improvement in service quality • Leadership and inf
Slide 18: Analysis of Results
Agenda Analysis of Results 18
Slide 19: Income Statement / Group
Income Statement / Group IFRS 16 implementation affecting P&L and Net Debt figures Lower Net Operating Expenses: EUR +145.8 M Higher Depreciation: EUR -126.9 M Higher Net Financial Expenses*: EUR -51.6 M Lower Net Profit: EUR -22.2 M Higher Net Debt: EUR +1,652 M, with EUR +1,246 M due to change of
Slide 20: Income Statement / Group
Income Statement / Group Reported Net Profit up 13.0%, to EUR 3,406.3 M driven by strong business performance EUR M 2018 2019 Var. % Revenues 35,075.9 36,437.9 +1,362.0 +3.9 Gross Margin 15,435.1 16,263.4 +828.2 +5.4 Net Operating Expenses -4,155.2 -4,330.4 -175.2 +4.2 Levies -1,931.0 -1,829.0 +102.
Slide 21: Gross Margin / Group
Gross Margin / Group Gross Margin up 5.4%, to EUR 16,263.4 M, and +4.0% excluding fx impact … EUR M Revenues Procurements +3.9% +2.7% 35,075.9 36,437.9 19,640.7 20,174.5 2018 2019 2018 2019 … Revenues grew 3.9% (EUR 36,437.9 M) and Procurements up 2.7% (EUR 20,174.5 M) 21
Slide 22: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses up 4.2%, to EUR 4,330.4 M and +2.7% excluding fx impact EUR M Net Operating Expenses 2018 2019 vs 2018 (%) vs 2018 (%) (excluding fx) Net Personnel Expenses -2,020.0 -2,146.1 +6.2% +4.7% Net External Services -2,135.2 -2,184.4 +2.3% +0.7% Total N
Slide 23: Levies / Group
Levies / Group Levies fall 5.3%, to EUR 1,829.0 M, as a consequence of … +118 -16 -1,829 -1,931 Spanish taxes on 2018 Fx and other 2019 generation … lower taxes in Spain, due to lower hydro production and lower prices 23
Slide 24: Results by Business / Networks
Results by Business / Networks Networks EBITDA up 7.1%, to EUR 5,262.2 M, … EBITDA by Geography (%) Key Figures (EUR M) Brazil 23% 2018 2019 vs 2018 Gross Margin 7,641.8 8,130.6 +488.8 (+6.4%) 33% Spain 5,262.2 Net Op. Exp. -2,079.1 -2,184.0 -105.0 (+5.0%) United States 25% Levies -647.7 -684.4 -36.
Slide 25: Results by Business / Networks
Results by Business / Networks Spain EBITDA EUR 1,710.7 M (EUR +1.3 M; +0.1%), as positive one-off accounted for in 2018 corresponding to ICAs* (EUR +55 M) was compensated by the transfer of the fibre optic contracts (EUR +49 M) US EBITDA IFRS USD 1,489.5 M (USD -83.1 M; -5.3%), driven by: + Higher
Slide 26: Results by Business / Renewables
Results by Business / Renewables Renewables EBITDA falls 2.4%, to EUR 2,385.1 M, … EBITDA by Geography (%) Key Figures (EUR M) IEI* 2018 2019 vs 2018 14% Mexico Gross Margin 3,610.9 3,445.6 -165.3 (-4.6%) 4% Brazil 31% Spain Net Op. Exp. -698.2 -719.1 -20.9 (+3.0%) 6% 2,385.1 Levies -468.0 -341.4 +1
Slide 27: Results by Business / Renewables
Results by Business / Renewables Spain EBITDA EUR 736.1 M (EUR -182.4 M; -19.9%), as a consequence of lower hydro (-31.8%), partially compensated by 7.2% higher wind production and lower taxes US EBITDA USD 662.1 M (USD -14.9 M; -2.2%), higher output (+2.3%), due to new installed capacity, offset by
Slide 28: Results by Business / Generation and Supply
Results by Business / Generation and Supply Generation & Supply EBITDA up 21.1% to EUR 2,468.7 M, … EBITDA by Geography (%) Key Figures (EUR M) 2018 2019 vs 2018 Brazil 3% Gross Margin 4,167.9 4,687.6 +519.7 (+12.5%) Mexico 31% Net Op. Exp. -1,327.4 -1,411.2 -83.8 (+6.3%) Spain 2,468.7 62% Levies -8
Slide 29: Results by Business / Generation and Supply
Results by Business / Generation and Supply Spain EBITDA EUR 1,557.7 M (EUR +531.3 M; +51.8%) • Higher Production: 36,369 GWh (+14.6%); CCGT (+137.0%) • Revenues increase. Active management of customer portfolio: Energy + Smart Solutions • LNG contracts sale (EUR +87 M one off) Mexico EBITDA USD 853
Slide 30: EBIT / Group
EBIT / Group Group EBIT up 8.0%, to EUR 5,877.2 M EUR M EBIT D&A and Provisions 2018 2019 vs 2018 (%) +8.0% D&A -3,586.3 -3,874.3 +8.0% Provisions -323.2 -352.4 +9.0% 5,877.2 5,439.4 TOTAL -3,909.5 -4,226.7 +8.1% 2018 2019 D&A and Provisions up 8.1% due to higher asset base and activity (EUR -188 M)
Slide 31: Net Financial Expenses / Group
Net Financial Expenses / Group Net Financial Expenses up EUR 144.0 M, to EUR 1,300.1 M, due to higher average debt, IFRS 16 impact (EUR 53.5 M) and FX hedges … Net Financial Exp. evolution (EUR M) Cost of Debt - 79.3 - 1,300.1 - 53.5 - 1,156.1 - 26.9 + 15.7 3.40% 3.35% Dec 2018 Cost Avg. debt IFRS16
Slide 32: Adjusted Net Debt / Group
Adjusted Net Debt / Group Credit metrics stable despite the increase in debt driven by IFRS16 (+EUR 1,652 M) and capex program Adjusted credit metrics Adjusted Net Debt* (EUR M) Dec 2018 Dec 2019** Dec 2019** (Exc IFRS16 impact) Adjusted Net Debt*/EBITDA 3.7x 3.7x 3.6x 37,769 34,149 FFO/Adjusted Net
Slide 33: Green/sustainable financing
Green/sustainable financing Iberdrola Group is the world leading private group in green bonds issued Green Financing: EUR 11,036 M Green / Sustainable Financing*: EUR 20,077 M Hybrid DCM 2,500 EUR Bank loans 359 79% Multilateral loans 685 Public Senior DCM 5,700 AGR DCM 1,210 USD 19% Neo DCM 287 Pri
Slide 34: Net Profit / Group
Net Profit / Group Reported Net Profit up 13.0%, to EUR 3,406.3 M EUR M 2018 2019 vs 2018 (%) EBIT 5,439.4 5,877.2 +8.0% - Net Financial Expenses -1,156.1 -1,300.1 +12.5% - Equity Method +4.7 -51.4 n/a - Non Recurring Results +8.9 +202.8 n/a - Corporate Tax and Minorities -1,282.8 -1,322.2 +3.1% Rep
Slide 35: Income Statement / Net Profit
Income Statement / Net Profit Non recurring costs, mostly accounted for in Q4, partially offset 2019 positive one-offs and will enhance future results 2019 positive one-offs … … and non recurring costs: Spanish fibre optic: EUR +151 M Efficiency measures: EUR -38 M LNG contracts: EUR +67 M UK Lib. B
Slide 36: Conclusions
Agenda Conclusions @@ BERDROLA /wewvriberdrola.com Results Presentation /2019 dla 26
Slide 37: Conclusions: Strong 2019 results
Conclusions Strong 2019 results Shareholder EBITDA Net Profit Remuneration EUR 10,104 M EUR 3,406 M EUR 0.40/share +8% +13% +14% 37
Slide 38: 2020 Outlook
2020 Outlook Increasing gross investments to more than EUR 10,000 M (+40% over the average of last three years)… Increase in Capacity 4 GW (+8%) Increase in Asset base ~4% RAV increase …together with higher efficiencies… 38
Slide 39: 2020 Outlook
2020 Outlook …and the good perspectives of all businesses… Networks • New rate plans Renewables Generation • Additional capacity & Supply • Higher production • Hedges in commodities prices …lead to high single-digit1 growth outlook in Net Profit for 2020, maintaining financial strength and dividend
Slide 40: Medium term Outlook
Medium term Outlook Our Vision and track record in execution is reinforced by strong climate policies EU Green Deal National Energy Increasing our and Climate Plan “Net Zero” Net Profit outlook: high single-digit New average growth planning in Resiliency plans strong demand Brazil and Mexico for ren