Slide 1: Results Presentation 2017
Results Presentation / 2017 ‘iserproia London / 21 February Iberdrola, “utility of the future”
Slide 2: Legal Notice
Legal Notice DISCLAIMER IMPORTANT INFORMATION This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with This document has been prepared by Iberdrola, S.A. exclusively for the provisions of (i) the restated text of the Securities Market Law approved
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: Highlights of the period
Highlights of the period Net Profit grows 3.7% to EUR 2,804 M Adjusted EBITDA reaches EUR 7,522 M1 (reported EBITDA EUR 7,319 M ) Net Investments of EUR 5,891 M (+38% vs 2016) US tax reform has a net positive impact of EUR 1,284 M, which has been applied to provisions & efficiency measures to increa
Slide 6: Adjusted EBITDA reaches EUR 7,522 M
EBITDA Adjusted EBITDA reaches EUR 7,522 M1 (reported EBITDA EUR 7,319 M ) EBITDA by business Operating Highlights Liberalised Gen & Supply Networks -38.9% •US: rate cases of New York & Connecticut. Regulated Generation 15% •Brazil: Neoenergia consolidation. +20.5% Renewables 7% •UK: higher output a
Slide 7: Net Investments increase 38% to EUR 5,891 M
Investments Net Investments increase 38% to EUR 5,891 M 89% in regulated and long term contracted businesses Business Investments1 Liberalised Gen & Supply 11% Contracted Generation 12% 36% Networks 41% Renewables 72% allocated to growth 1 Excluding Corporate and other 7
Slide 8: AVANGRID results FY 2017
AVANGRID results FY 2017 (USD, US GAAP) Adjusted Net Profit1: USD 682 M (+6%) Executing on the growth on our Strategic Plan • Investments of USD 2.3 Bn (+18% vs 2016) • Executed 846 MW of new wind PPAs in 2017 • Settled Southern Connecticut Gas distribution 3-year rate case • Sale of the Gas Trading
Slide 9: Shareholder Remuneration
Shareholder Remuneration Proposed increase in Shareholder Remuneration to EUR 0.323/share (+4.2%1)… Interim remuneration2 2017 EUR 0.140/share2 Paid in January 2018 88% of share capital chose the Scrip Dividend option + Supplementary remuneration 2017 Subject to approval at AGM payable in July 2018
Slide 10: Analysis of Results
Agenda Analysis of Results 10
Slide 11: Results / Group: non recurring factors
Results / Group Several non recurring factors have affected 2017 results … Negative Positive Hydro situation Spain US storms US Tax reform net impact Liberalised Business UK Gamesa capital gain Provisions for efficiency plans Discontinuing operations of Engineering NEO integration Write down of Nort
Slide 12: US Tax Reform / Group
US Tax Reform / Group US Tax Reform has a total net positive impact of Eur 1,284 M … Gross impact on deferred taxes due to Taxes Eur 2,026 M lower Corporate Tax Rate (from 35% to 21%) Adjustment to the value of US Renewables assets Provisions Eur -450 M due to the extension in time for recovery of t
Slide 13: From Reported EBITDA to Adjusted EBITDA
From Reported EBITDA to Adjusted EBITDA 2017 Reported EBITDA includes, as Net Op. Expenses, provisions for efficiency plans, benefitting 2018 results, as they have been mostly executed in Q1’18 +203 7,522 7,319 2017 Reported Provisions for 2017 Adjusted EBITDA efficiency plans EBITDA Adjusted EBITDA
Slide 14: Income Statement / Group
Income Statement / Group Net Profit up 3.7%, to Eur 2,804.0 M Eur M 2017 2016* Var. % Revenues 31,263.3 28,759.1 +2,504.1 +8.7 Gross Margin 13,363.8 12,935.4 +428.4 +3.3 Net Operating Expenses -4,170.6 -3,466.0 -704.6 +20.3 Levies -1,874.5 -1,535.8 -338.7 +22.1 Reported EBITDA 7,318.7 7,933.7 -615.0
Slide 15: Gross Margin / Group
Gross Margin / Group Gross Margin up 3.3%, to Eur 13,363.8 M, as NEO consolidation (Eur +561.9 M) more than compensates fx impact (Eur –186.4 M) Eur M Revenues Procurements +8.7% +1 .1% 28,759.1 31,263.3 15,823.7 17,899.5 2016 2017 2016 2017 Revenues grew +8.7% (Eur 31,263.3 M) and Procurements +13.
Slide 16: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses up 20.3% (Eur -704.6 M), to Eur 4,170.6 M, driven by NEO consolidation, US storm costs, provisions for efficiency plans and other, partially compensated by fx Eur M Net Operating Expenses vs 2016 (%) 2017 2016 vs 2016 (%) Like for like Net Person
Slide 17: Levies / Group
Levies / Group Levies up 22.1%, to Eur 1,874.5 M as a consequence of … -2 -68 -269 -1,875 -1,536 2016 positive 2017 2016 Court Rulings Social Bonus Other 2017 … 2016 positive Court rulings in Spain and impact of 2017 Social Bonus 17
Slide 18: Results by Business / Networks
Results by Business / Networks Networks Adjusted EBITDA up 5.9%, to Eur 4,328.4 M EBITDA by Geography (%) Key Figures (Eur M) 2017 vs 2016 vs 2016 (%) Brazil 12% Gross Margin 6,786.7 6,160.5 +626.2 (+10.2%) United States 32% 36% Spain Net Op. Exp. -1,921.9 -1,440.8 -481.1 (+33.4%) Levies -636.8 -638
Slide 19: Results by Business / Networks
Results by Business / Networks EBITDA Eur 1,520 M (Eur -84 M; -5%), due to lower incentives (Eur -16 M) and provisions for Spain efficiency plans. Adjusted EBITDA falls 0.7% EBITDA USD 1,505.5 M (USD +99.7 M; +7.1%), driven by: US + New Rate Cases (USD +120 M) + Positive IFRS impact - Storm costs on
Slide 20: Results by Business / Generation and Supply
Results by Business / Generation and Supply Generation & Supply EBITDA falls 29.0% to Eur 1,600 M … Key Figures (Eur M) EBITDA by Geography (%) Brazil 2017 vs 2016 vs 2016 (%) 4% Gross Margin 4,237.8 4,634.0 -396.2 (-8.6%) Mexico 32% Net Op. Exp. -1,580.1 -1,504.6 -75.5 (+5.0%) 55% Spain Levies -1,0
Slide 21: Results by Business / Generation and Supply
Results by Business / Generation and Supply EBITDA Eur 902 M (Eur -619 M; -41%) - Output* decreases -20.8% due to record low hydro production (7.9 TWh) against previous record high year (-56.9%, or -10.4 TWh) Spain + Better Gas results (Eur +83 M) due to the price revision for the portfolio - Levies
Slide 22: Results by Business / Renewables
Results by Business / Renewables EBITDA up 6.1%, to Eur 1,592.1 M, with installed capacity growing 7.5% to 16.6 GW* Key Figures (Eur M) EBITDA by Geography (%) Rest 2017 vs 2016 vs 2016 (%) 6% Mexico and 7% Brazil Gross Margin 2,326.5 2,179.5 +147.0 (+6.7%) 31% United Spain Net Op. Exp. -574.4 -536.
Slide 23: Results by Business / Renewables
Results by Business / Renewables EBITDA USD 597.8 M (USD -26.2 M; -4.2%), affected by the positive impact of some US power hedges accounted for in 2016 and higher development costs, despite higher output (+2.0%) EBITDA EUR 493.1 M (EUR –4.3 M; -0.9%), driven by lower output (-2.6%). Spain Positive a
Slide 24: EBIT / Group
EBIT / Group Group EBIT, adjusted for North America Gas business write down (Eur 743 M) and reduction of the value of US renewables due to tax reform (Eur 450 M), falls 16.7%, to Eur 3,905.4 M Eur M EBIT 2017 2017 2016 -42.1% vs 2016 (%) D&A -3,183.6 -3,074.2 +3.5 4,685.9 2,712.6 Provisions -1,422.4
Slide 25: Net Financial Expenses / Group
Net Financial Expenses / Group NEO integration, partially compensated by lower cost of debt, drives Net Financial Expenses up Eur 33.7 M to Eur 937.1 M Net Financial Exp. evolution (Eur M) Cost of Debt * -937.1 -903.4 -31 bps 3.49% -85.7 +65.6 -13.6 3.18% (inc. NEO) -50 bps 2.99% (exc. NEO) * Impact
Slide 26: Net Profit / Group
Net Profit / Group Reported Net Profit up 3.7%, to Eur 2,804.0 M Eur M 2017 2016 vs 2016 EBIT 2,712.6 4,685.9 -42.1% Net Financial Result -937.1 -903.2 +3.8% Equity -281.7 -53.4 n/a Non Rec. results +279.1 +48.7 n/a Taxes +1,397.1 -935.2 n/a Minorities -366.0 -137.9 n/a Reported Net Profit 2,804.0 2
Slide 27: Net Debt / Group
Net Debt / Group Net Debt increases to Eur 32,856 M, affected by the consolidation of NEO Net Debt (Eur M) Credit Metrics 32,856 2,817 29,230 4.1x Net Debt / Adjusted EBITDA 30,039 21.1% FFO/Net Debt 1 .2% RCF/Net Debt 2016 2017 43.4% Leverage NEO Pro forma credit metrics include Neo from January 1s
Slide 28: Investor Relations app
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