Slide 1: Results Presentation 2020
Results Presentation 2020 Internal Use
Slide 2: Legal Notice: Disclaimer
Legal Notice DISCLAIMER This document has been prepared by Iberdrola, S.A. exclusively for use during the presentation of financial results of the 2020 fiscal year. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason
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 Results Presentation / 2020 / 4
Slide 5: Highlights of the period
Highlights of the period Reported Net Profit of EUR 3,611 M Net Profit grows ~10% excluding COVID effect (EUR 238 M)… Record investments of EUR 9,246 M (+13%) Purchases awarded for more than EUR 14,000 M to support the activity of our supply chain Adjusted EBITDA grows 8% to EUR 10,715 M, excluding
Slide 6: Outperforming Eurostoxx utilities by 18 points in 2020
Highlights of the period Outperforming Eurostoxx utilities by 18 percentage points in 2020... 2020 stock performance +27.5% +9.8% -5.1% -15.5% Eurostoxx Iberdrola Eurostoxx 50 Ibex-35 Utilities … and Ibex-35 by more than 40... Results Presentation / 2020 / 6
Slide 7: Total shareholder return of 800% in 20 years
Highlights of the period …for a total Shareholder return of 800% in the last 20 years, thanks to a successful strategy that anticipated the energy transition… Renewable Coal & fuel oil Presence in A-rated Financial Strength + investment closure countries Geographical expansion in Energy storage Grow
Slide 8: Unique position to grow in the coming decade
Highlights of the period …and places Iberdrola in a unique position to grow in the coming decade… 2000 2020 2025E 2030E Renewable capacity (GW) 10 35 ~60 ~95 Fuel-oil & coal capacity (GW) 9 0 0 0 Networks Asset Base (Eur Bn) 4 31 ~47 ~60 Reported Net Profit (EUR Bn) 0.9 3.6 5.0 ~7 Dividend (EUR/shar
Slide 9: Gross Investments
Gross Investments Record investments of EUR 9,246 M (+13%), 91% allocated to renewables and networks 2020 Gross Investments by business Generation & Corporate & other 1% Supply -9% 8% -30% Renewables 9,246 39% +42% M EUR Networks --- 52% Purchases awarded for more than EUR 14,000 M to support the ac
Slide 10: Adjusted EBITDA up 8% excluding FX impact
EBITDA Adjusted EBITDA up +8%, excluding FX impact… Breakdown by business Networks • New regulatory period in Spain • New Rate Case in New York Generation • Larger Rate Base in UK & Supply 25% • Brazil: Higher contribution from Transmission and tariff reviews Networks Renewables 10,715 • Additional
Slide 11: EBITDA geographic diversification
EBITDA …with optimal geographic diversification: 76% from A-rated countries like Spain, UK, US, Australia, France and Germany … Breakdown by geography ~76% in countries with credit rating ≥A1 76% 24% …and the remaining 24% mainly from Brazil and Mexico 1 Under Standard & Poor’s categorization Result
Slide 12: Close to 4,000 MW of new installed capacity
New Installed capacity Close to 4,000 MW of new installed capacity in the last 12 months… Renewable Installed Capacity in 2020 MW Offshore wind 294 Onshore wind 1,691 Solar PV 874 Storage 31 (Hydro & Batteries) Total 2,890 …of which 74% are renewables, reaching ~35,000 MW of renewable capacity Resul
Slide 13: Reduction in CO2 owned emissions
Renewable installed capacity: Emissions …for a further reduction in CO2 owned emissions to only ~98 gr/kWheq in 2020… Coal and fuel-oil / CO2 emissions (gr/kWheq) Total Installed Capacity x2.7 25% 296 x2 220 -11% 110 98 4% 0% Enel NextEra Enel NextEra Iberdrola 2019 2019 2019 2020 … with commitment
Slide 14: Project pipeline above 74,400 MW
Progress on 2020-2025 Plan Project Pipeline Increasing our pipeline by 25,000 MW in 2020 to more than 74,400 MW Pipeline by technology (MW) Pipeline by geography (MW) 32,000 22,000 23,900 19,500 16,200 12,900 7,100 4,900 6,100 68% 3,300 900 Offshore Onshore Solar Batteries Hydro wind wind PV Storage
Slide 15: 17,400 MW of renewable capacity under construction or secured
Progress on 2020-2025 Plan Renewable Installed capacity … with 17,400 MW of renewable capacity already under construction or secured… Renewable capacity1 under construction or secured (MW) 2021 2022 2023 2024 2025 Total --- --- 500 1,300 800 2,600 1,300 1,600 900 600 100 4,500 1,000 --- 200 --- ---
Slide 16: Offshore wind: installed and under construction
Progress on 2020-2025 Plan Offshore wind Offshore already contributing EUR 585 M to EBITDA (+72%) Installed Under construction (COD 2023-25) Availability and load factors ahead of initial estimates All projects on track Irish Sea Baltic Sea North Sea Brittany Baltic Sea Massachusetts Connecticut Wes
Slide 17: Offshore wind: ready-to-build pipeline
Progress on 2020-2025 Plan Offshore wind …with an additional high quality pipeline of 19,000 MW of which 9,000 MW are ready to build and with seabed costs close to zero… Ready to build projects North Carolina Massachusetts North Sea Baltic Sea Name Kitty Hawk Zone 522 East Anglia Hub Windanker Capac
Slide 18: Upcoming offshore auctions and tenders
Progress on 2020-2025 Plan Offshore wind …giving us an optimal access to upcoming auctions and tenders in our markets in the next 12-18 months United States UK Japan 3,200 MW up to 12,000 MW 3,000 MW • Rhode Island - 600 MW • 1st Round - 1,500 MW • 4th Round CfD • Massachusetts - 1,600 MW • 2nd Roun
Slide 19: Regulated networks assets of EUR 31.1 Bn
Progress on 2020-2025 Plan Networks Regulated networks assets of EUR 31.1 Bn in 2020… Regulated Networks Assets Main drivers by geography PNM Resources Spain 30% • Closing expected by second half 2021 Brazil UK New York 14% • Rate Case approval: Securing investments 25% of USD 1,000 M per annum (x2
Slide 20: Increasing customer base in energy and smart solutions
Progress on 2020-2025 Plan Contracts Increasing customer base in energy and smart solutions (M Contracts) 48.5 42.3 43.8 • Growth driven by 10.7 9.3 Spain and UK Smart Solutions 8.4 18.0 • Growth in IEI Electricity & Gas 16.7 16.9 • Integration PNM & CEB-D Regulated 17.6 19.7 17.3 • Organic Growth i
Slide 21: Leading the development of green hydrogen
Progress on 2020-2025 Plan Green hydrogen Leading the development of green hydrogen Secured projects ready by 2021 Additional projects • Fertiberia: 810 MW of electrolyzers (2022-2027) Decarbonization • Puertollano I: 20 MW electrolyzer • >20 additional projects for 90 MW of of Industry • Inverness:
Slide 22: Next Generation EU opportunity
Next Generation EU, an opportunity to transform the economy More than 150 projects presented in Spain: Over EUR 21,000 M in core areas that will generate growth and employment… Iberdrola’s 150 projects Key benefits Inclusive Urban and Rural Infrastructure Employment >45,000 jobs per year Energy Tran
Slide 23: Financial Strength
Financial Strength Cash flow up 2%, driving an improvement of financial ratios Operating Cash Flow (FFO1) + 1.6% 8,192 Maintaining full access to capital markets 8,060 Leaders in green financing, with EUR 24.5 Bn in Green / Sustainable financing FFO / Adjusted Net Debt2 +190 bp Liquidity3 reaching E
Slide 24: Shareholder remuneration
Shareholder remuneration Proposed supplementary remuneration of EUR 0.252/share, to reach a total dividend of EUR 0.42/share (+5%1)… Interim remuneration2 EUR 0.168/share (paid on February 8th 2021) + Supplementary remuneration EUR 0.252/share Subject to approval at AGM (payable in July 2021) Total
Slide 25: Analysis of Results
Agenda Analysis of Results Results Presentation / 2020 / 25
Slide 26: EBITDA / Group
EBITDA / Group Adjusted EBITDA excluding fx is up 8%, reaching EUR 10,715 M EUR M +487 10,715 +218 10,228 10,104 10,010 9,935 +3.0% 2019 2020 2019 2020 COVID Fx 2020 Adjusted Adjusted Reported Reported effect impact Adjusted EBITDA(1) EBITDA(2) EBITDA EBITDA EBITDA ex fx Adjusted EBITDA reaches EUR
Slide 27: Gross Margin and Net Operating Expenses / Group
Gross Margin and Net Operating Expenses / Group Gross Margin falls 0.7%, with a negative fx impact of EUR 744 M. Excluding fx impact, grows 3.8% EUR M Gross Margin EUR M Net Operating Expenses -0.7% -0.4% 16,263.4 16,145.1 4,330.4 4,314.0 2019 2020 2019 2020 Net Operating Expenses improve 0.4%, but
Slide 28: Results by Business / Networks
Results by Business / Networks Networks Reported EBITDA falls 9.2%, to EUR 4,777.5 M, and -1.7% excluding fx impact (EUR -397 M) EBITDA by Geography (%) Key Drivers COVID impact on demand: EUR -111 M, Brazil to be mostly recovered 22% 34% Spain Good operating performance in 4,777.5 United Kingdom an
Slide 29: Results by Business / Networks
Results by Business / Networks Spain EBITDA EUR 1,611.8 M (EUR -98.9 M; -5.8%): • Lower remuneration established for 2020 in the regulatory framework: EUR -50 M • Impact of transferring the fibre optic contracts in Q3´19: EUR -49 M • Positive settlements accounted for in 2019: EUR -33 M US EBITDA IF
Slide 30: Results by Business / Renewables
Results by Business / Renewables Renewables Reported EBITDA up 8.4%, to EUR 2,585.6 M, and +11.1% excluding fx impact (EUR -64 M) EBITDA by Geography (%) Key Drivers IEI* 13% Spain Total installed capacity: 34,920 (+9.0%) Mexico 4% Increased production: +18.3%, driven by offshore, 27% Brazil with EU
Slide 31: Results by Business / Renewables
Results by Business / Renewables UK EBITDA GBP 674.6 M (GBP +213.6 M; +46.3%): • Higher production due to offshore (+231.4%), driven by the contribution from East Anglia 1 (714 MW), fully in operation from April 2020. Spain EBITDA EUR 697.6 M (EUR -38.5 M; -5.2%): • Lower sale price to the Supply bu
Slide 32: Results by Business / Generation and Supply
Results by Business / Generation and Supply Generation & Supply Reported EBITDA up 3.9% to EUR 2,564.8 M, and +5.5% excluding fx impact (EUR -39 M) Key Drivers EBITDA by Geography EBITDA (%) by Geography (%) COVID impact on demand EUR -107 M Brazil 2% Business improvement vs 2019 in UK and Mexico… M
Slide 33: Results by Business / Generation and Supply
Results by Business / Generation and Supply Spain EBITDA EUR 1,468.7 M (EUR -89.0 M; -5.7%): • Lower output 33,935 GWh (-6.5%) • Higher energy purchases at lower prices vs 2019 • Recurring EBITDA +6.4%, excluding: o LNG contracts sale in 2019: EUR 87 M o Corporate charge for brand: EUR 95 M Mexico E
Slide 34: EBIT / Group
EBIT / Group D&A +2.6% due to higher asset base. Provisions +41.7%, including EUR 124 M of bad debt provisions related to COVID (EUR 27 M in Networks and EUR 97 M in Generation & Supply) EUR M D&A and Provisions EUR M EBIT +5.8% -5.8% 4,474 4,227 500 353 Provisions 5,877 5,536 3,874 D&A 3,974 2019 2
Slide 35: Net Financial Expenses / Group
Net Financial Expenses / Group Net Financial Expenses improve by EUR 309 M to EUR 991 M, due to lower cost and one-off fx hedges, … Net Financial Exp. evolution (EUR M) Cost of Debt -1,300 +309 -991 3.50%* -32 bps 3.18% Dec 2019 Dec 2020 Dec 2019 Dec 2020 …. despite slightly higher average debt * De
Slide 36: Adjusted Net Debt / Group
Adjusted Net Debt / Group FFO / Adjusted Net Debt up 1.9 p.p. vs 2019, to 23.5% Adjusted Net Debt 1 (EUR M) Adjusted credit metrics Dec 2020 2,3 Dec 2019 3 37,537 Adjusted Net Debt 1 / EBITDA 3.5x 3.7x 35,142 1,030* FFO / Adjusted Net Debt 1 23.5% 21.6% RCF / Adjusted Net Debt 1 21.3% 20.1% Adjusted
Slide 37: Interest rates / Group
Interest rates / Group Conservative financial policy and debt structure: 71% of Group’s debt at fixed rate, and an additional 10% of future debt closed through forwards Debt structure Business structure 75% 71% 100% 89% 50% 71% 50% 56% 58% 41% R 1% 1% Fixed interest rate Fixed revenue Average debt m
Slide 38: Net Profit / Group
Net Profit / Group Adjusted Net Profit up EUR 300 M (+9.7%), and Reported Net Profit up 4.2% EUR M 3,611 +4.2% 211** 3,466 366* +9.7% 2019 2020 Reported Adjusted Net Profit Reported Net Profit Net Profit * 2019: LNG contracts sale (EUR +66 M), transfer of the fibre optic contracts (EUR +151 M), sett
Slide 39: Conclusions
Agenda Conclusions Results Presentation / 2020 / 39
Slide 40: Business model and proven capability to deliver
Conclusions Our business model and proven capability to deliver make Iberdrola the best pick in the current scenario Energy transition: Acceleration in ALL activities Medium and Long-term ESG focus Resilience Iberdrola, the GENUINE GREEN MAJOR Results Presentation / 2020 / 40
Slide 41: Energy Transition: Acceleration in ALL activities
Conclusions Energy Transition: Acceleration in ALL activities • 72% of installed owned capacity is already renewable A leader in • Capacity 2x in 5 years to 60,000 MW and 3x by 2030 to 95,000 MW RENEWABLES • Pipeline of 74,400 MW of which 17,000 MW are under construction or secured • Offshore alread
Slide 42: Medium and Long-term solid growth
Conclusions Medium and Long-term solid growth All our businesses are GROWTH • More than 90% of gross investments to Networks and Renewables BUSINESSES • 76% of EBITDA from A-rated countries • A balanced mix of businesses and currencies Optimal • 80% of gross margin secured: DIVERSIFICATION • 70% of
Slide 43: ESG Focus
Conclusions ESG Focus GREEN TRANSITION • No generation with coal and fuel-oil: write-offs, decommissioning or ALREADY achieved social costs already incurred in previous years Leading in • Record purchases of EUR 14 Bn to support 400,000 jobs1 in our supply SOCIAL chain TRANSFORMATION Best-in-class •
Slide 44: Outlook: Net Profit guidance
Outlook Strong prospects in the short, medium and long term 2020 2021E 2025E 2030E Net Profit EUR 3.6 Bn EUR 3.7-3.8 Bn EUR 5 Bn EUR ~7 Bn Net Profit guidance of EUR 3.7-3.8 Bn in 2021… Results Presentation / 2020 / 44
Slide 45: Outlook: dividend per share
Outlook …with dividend of EUR 0.44 per share… 2019 2020 2021E ... 2025E ... 2030E (EUR per share) ~ +90% ~0.75 +40% 0.56 0.44 0.42 Dividend 0.40 …and increasing shareholder remuneration: 40% in 2019-2025 and ~90% in 2019-2030 Results Presentation / 2020 / 45
Slide 46: Annex
Agenda Annex Results Presentation / 2020 / 46
Slide 47: Income Statement / Group
Income Statement / Group EUR M 2020 2019 % Revenues 33,145.1 36,437.9 -9.0 Gross Margin 16,145.1 16,263.4 -0.7 Net Operating Expenses -4,314.0 -4,330.4 -0.4 Levies -1,820.9 -1,829.0 -0.4 EBITDA 10,010.2 10,104.0 -0.9 EBIT 5,536.3 5,877.2 -5.8 Net Financial Expenses -991.0 -1,300.1 -23.8 Non Recurrin
Slide 48: COVID impact / Group
COVID impact / Group EUR 342 M of total COVID impact on EBIT level: EUR 218 M of demand impact within EBITDA and EUR 124 M of bad debt included within Provisions (EUR M) COVID Impact at Net Profit level by quarters 136 50 35 17 Q1 Q2 Q3 Q4 EUR -238 M of COVID impact on Net Profit, around 50% expecte
Slide 49: COVID impact / Group
COVID impact / Group Two main direct COVID impacts considered, totalling EUR 342 M in 2020, demand (EUR 218 M) accounted for within EBITDA and bad debt (EUR 124 M) at EBIT DEMAND(1) BAD DEBT(2) EUR M Generation Generation Networks Networks &Supply &Supply SPAIN 9 28 - 18 UK 22 43 - 65 US 55(3) - 8 -
Slide 50: Net Debt evolution
Net Debt evolution Adjusted Net Debt -6.4%, FFO and Siemens Gamesa divestment more than compensate the capex increase in 2020 (EUR M) 3,057 (1,556) 37,537 9,246 (3,000) 35,142 (8,192) (2,515) 565 1,0301 2019 2020 FFO Gross Dividends Divestments Hybrid FX impact Other Net Debt Net Debt Investments 1.
Slide 51: Debt maturity profile
Debt maturity profile Average Debt maturity of close to 7 years 18,089 (EUR M) 5,096 4,549 4,078 3,535 3,626 2021 2022 2023* 2024** 2025 2026+ * Includes USD 400 M with extension option for 1 or 2 year ** Includes USD 500 M with extension option for 1 or 2 year Results Presentation / 2020 / 51
Slide 52: FX Hedging
FX Hedging Currencies hedged at the beginning of each year to minimize volatility at Net Profit level Hedge (%) 2021 levels 80% 1.2 – 1.21 85% 0.86 – 0.87 R 85% 6.35-6.60 Results Presentation / 2020 / 52
Slide 53: Liquidity and debt diversification
Liquidity and debt diversification Liquidity totals EUR 17.4 bn* covering 24 months** of financing needs Liquidity by instrument Gross debt by product Bank loans 12.5% Leases EUR 5.3% bonds Cash Structured 31.1% Backup 5,706 1.1% Lines 7,300 Multilateral 11.6% Commerci al paper Available 7.7% BRL GB
Slide 54: Main financial transactions
Main financial transactions Group’s solid and sustainable profile enables raising funds in all markets, equivalent to EUR 12.5 bn to date* Market Amount Remarks Hybrid* EUR 5,000 M Achieved objective for 2021 Bond EUR 1,110 M Deals in all markets with USD 1,580 M oversubscribed order books BRL 2,560
Slide 55: Green / sustainable financing
Green / sustainable financing Iberdrola remains the world leading group in green bonds issued Iberdrola signed new transactions totaling EUR 4.5 bn* of green financing for a total of EUR 24.5 bn in green/sustainable financing** to date * Including EUR 2.0 bn signed to date ** Including sustainable c
Slide 56: 2020 Investments
2020 Investments Spain UK US Brazil México EIE Total Networks 553.9 566.8 1,588.7 904.8 - - 3,614.2 Renewables 1,173.2 597.4 1,026.6 165.7 242.5 1,554.6 4,759.9 Generation & Supply 261.4 156.9 - 17.3 198.9 86.9 721.3 Other 101.7 27.5 10.3 3.8 7.2 - 150.6 Total 2,090.1 1,348.6 2,625.6 1,091.5 448.5 1
Slide 57: Renewable Installed capacity under construction or secured
Progress on 2020-2025 Plan: Renewable Installed capacity Renewable capacity under construction or secured (MW) 2021 2022 2023 --- 100 --- 1,200 --- 1,300 --- 200 --- 1,500 --- 1,700 --- 100 --- 1,000 --- 1,100 --- --- --- --- 100 200 --- 100 --- --- --- 100 --- --- --- --- 100 100 --- 200 --- 400 --
Slide 58: IEI Renewable Installed capacity
Progress on 2020-2025 Plan: IEI Renewable Installed capacity Iberdrola Energía Internacional - Renewable capacity under construction or secured (MW) 2021 2022 2023 Portugal --- --- 1,000 30 --- 1,030 --- --- --- 140 --- 140 --- 200 160 --- --- 360 Australia --- 210 --- 110 --- 320 --- 140 --- 80 ---
Slide 59: Net Electricity Production secured
Net Electricity Production ~70% of generation secured through PPAs or long term arrangements… Net Electricity Production 2021 Energy secured 2021 by type Energy secured PPA, FiT Merchant or CfD 5% 70% Hedge 9% Regulated Hedge 3% 88% 25% Retail Portfolio …with a 25% secured through our customer base
Slide 60: Average power price and production sold forward
Average power price and production sold forward Production sold forward 2020 2021 2022 (1) (2) Price % Price % Price % Iberia (EUR/MWh) ~ 75 100% 75-80 ~ 100% 75-80 ~ 70% UK (GBP/MWh) ~ 70 100% 70-75 ~ 100% 70-75 ~ 100% (1) Estimated price for average customer portfolio (2) Including retail roll-ove
Slide 61: Networks: Rate Cases
Networks: Rate Cases Stable and geographically diversified returns approved through regulatory frameworks 2020 2021 2022 2023 i-DE 2020 - 2025 RIIO-T1 Apr 13 - Mar 21 RIIO-T2 Apr 21 - Mar 26 SPEN RIIO-ED1 Apr 15 - Mar 23 NYSEG/RGE RC May 20 - Apr 23 CMP-D RC Mar 20 - Feb 21 Mar 21 – Feb 22 Mar 22 –
Slide 62: Next Generation EU: Spain's Recovery Plan (1/2)
Next Generation EU: Spain's Recovery, Transformation & Resilience Plan (1/2) Area Initiative Investment (Eur M) Projects Floating offshore wind: Industrial scale farm (300 MW) + demos 1,300 3 Pumped-hydro storage 3,400 6 Solar PV national deployment plan 3,700 1 Floating solar PV on hydroelectric da
Slide 63: Next Generation EU: Spain's Recovery Plan (2/2)
Next Generation EU: Spain's Recovery, Transformation & Resilience Plan (2/2) Area Initiative Investment (Eur M) Projects Public charging infrastructure for electric cars 80 2 Private charging infrastructure for electric cars 300 2 National fast and superfast corridors for electric vehicles 200 2 I+D
Slide 64: New ESG plan, Energy to Thrive
ESG New ESG plan, “Energy to Thrive”, with more than 350 measures building on 20 years of leading sustainable strategy • Leading the energy transition for more than two decades Environmental • Innovation and clean energy at the core of our strategy • Creating employment • Contributing to improve the
Slide 65: TFCD - Scenario Analysis: base case
TFCD - Scenario Analysis A resilient business model under the base case scenario1… STEPS Scenario 2030 Operating Impact 2030 EBITDA Impact (EUR M) Business Impact Type Region Low/NM Medium High <100/NM 100-300 >300 Europe Supply GWh Rest of the World Spain and UK US Global Generation MW/GWh Brazil I
Slide 66: TFCD - Scenario Analysis: Net Zero 2050
TFCD - Scenario Analysis … leading to greater opportunities in the road to Net Zero 2050 Net Zero Scenario 2030 Operating Impact 2030 EBITDA Impact (EUR M) Business Impact Type Region Low/NM Medium High <100/NM 100-300 >300 Europe Supply GWh Rest of the World Spain and UK US Global Generation MW/GWh
Slide 67: ESG - Sustainability Indicators
ESG - Sustainability Indicators Sustainability Indicators 2020 2019 (*) Contribution to GDP (Gross Margin) 0.55% 0.49% (*) Contribution to GDP (Net revenues) 1.05% 1.23% Net Profit (EUR million) 3,610.7 3,466.4 Dividend yield (%)(**) 3.46% 3.87% CO2 emissions over the period (gr, CO2 /KWh): Total 98
Slide 68: ESG - Indexes, rankings and recognitions
ESG - Indexes, rankings and recognitions Rating Status Dow Jones Sustainability World Index 2020 Selected in the utility sector. Iberdrola member in all editions Sustainability Yearbook ROBECOSAM 2020 Classified as "Silver Class” in the electricity sector. MSCI Global Sustainability Index Series Ibe