Slide 1: Results Presentation 2022
RESULTS PRESENTATION 2022 22 February 2023 és IBERDROLA
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 ▪ This document and the information presented herein was prepared by Iberdrola, S.A. solely with respect to the the 2022 fiscal year. As a consequence ther
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 opera
Slide 4: Agenda: Highlights of the period
Agenda Highlights of the period | www.iberdrola.com |4
Slide 5: Highlights of the period
Highlights of the period STRONG OPERATING PERFORMANCE DRIVES NET PROFIT OF EUR 4,339 M (+11.7%), SUPPORTED BY GROWTH IN ALL GEOGRAPHIES EXCEPT IN SPAIN (-19%) Investments of EUR 10,730 M, up +13% •Record purchases of EUR 17,800 M to 20,000 suppliers •4,700 new hires EBITDA up +10% to EUR 13,228 M dr
Slide 6: Investments
Investments RECORD INVESTMENTS OF EUR ~10,730 M, UP +13% 90% ALLOCATED TO NETWORKS AND RENEWABLES FY 2022 GROSS INVESTMENTS BY GEOGRAPHY FY 2022 GROSS INVESTMENTS BY BUSINESS EUR M Weight Corporate & other EU 4,124 38% Other Energy Production 2% Spain 2,908 27% & Customers Other EU 1,216 11% 8% US 2
Slide 7: Networks
Networks EUR 4,677M INVESTED IN NETWORKS C G G D B 39. Bn (+19%)… GROSS INVESTMENTS BY GEOGRAPHY RAB INCREASE 2022 +19% Eur ~39.2 Bn Spain 17% EUR ~33.0 Bn 31% US EUR 12.1 Bn 36% US ~4,677 24% UK EUR 9.6 Bn EUR M Brazil 32% 24% Spain EUR 9.4 Bn 15% UK 21% Brazil EUR 8.1 Bn 2021 2022 …W H B F M W K V
Slide 8: Renewable capacity
Renewable capacity I N S TA L L E D C A PA C I T Y R E A C H E S 4 0 , 0 0 0 M W TOTAL RENEWABLE INSTALLED CAPACITY CAPACITY UNDER CONSTRUCTION TO BE OPERATIONAL BY 2026 BY TECHNOLOGY Battery storage Weight Solar PV 11% 0.5% 198 MW 4,264 MW UK 400 1,400 475 -- 50 2,325 30% Hydro storage 51% 11% Spai
Slide 9: EBITDA
EBITDA EBITDA INCREASES +10% TO EUR 13,228 M 75% F M “ ”-RATED COUNTRIES BREAKDOWN BY BUSINESS & COUNTRY NETWORKS 49% • Higher asset base in all geographies 51% Networks • Tariff increases in US and Brazil Energy Production & Customers ~13,228 +21% vs. 2021 • Regulatory frameworks protecting from hi
Slide 10: AVANGRID results (USD, US GAAP)
AVANGRID results (USD, US GAAP) Avangrid’s Net Profit grows +25% to USD 881 M Investments of USD 2.7 Bn: USD 1.9 Bn in Networks and USD 0.8 Bn in Renewables EBITDA up +5% to USD 2,456 M Networks: Rate cases on track to enable future investments - Filed rate cases in all states, settled in MA, in set
Slide 11: Neoenergia results (BRL, BR GAAP)
Neoenergia results (BRL, BR GAAP) Neoenergia’s Net Profit increases +20% to BRL 4,718 M EBITDA up +18% to BRL 11,582 M Gross investments of BRL 10,319 M: BRL 5,878 M in Distribution and BRL 2,633 M in new Transmission lines BRL 1,677 M in new Renewables assets (Wind and Solar) Portfolio optimization
Slide 12: Financial Strength
Financial Strength O N G O I N G I M P R O V E M E N T O F F I N A N C I A L R AT I O S D R I V E N B Y S T R O N G C A S H F L O W G E N E R AT I O N FFO FFO1/ADJUSTED NET DEBT +25% EUR +2.4p.p. 11.1 Bn EUR 8.9 Bn 25.4% 23.0% 2021 2022 2021 2022 1 FFO = Net Profit + Minority Results + Amortiz.&Prov
Slide 13: Partnerships & Asset Rotation
Partnerships & Asset Rotation P R O G R E S S I N G A H E A D O F I N I T I A L E S T I M AT E S Q4 HYDRO ASSET SWAP WITH ELETROBRAS 2022 2023 PARTNERSHIP WITH NORGES INVESTMENT BANK ONSHORE WIND / SOLAR PV PARTNERSHIPS OFFSHORE WIND PARTNERSHIPS Other 2023-2025 THERMAL ASSETS IN BRAZIL PARTNERSHIP
Slide 14: Energy Context: Building regulatory frameworks to boost electrification (EU)
Energy Context: Building regulatory frameworks to boost electrification EU Promoting the development of more renewables to accelerate Reform of European decarbonization and increase energy autonomy Electricity market design (expected implementation in ‘25-’26) Creating incentives to long-term contra
Slide 15: Energy Context: Building regulatory frameworks to boost electrification (US, UK)
Energy Context: Building regulatory frameworks to boost electrification US ➢ Inflation Reduction Act • Promoting electrification through more renewables and networks. • Creating incentives to green hydrogen production. • Supporting local supply chains. UK ➢ Increasing need for investment linked to e
Slide 16: ESG+F: Creating sustainable value for all
ESG+F C R E AT I N G S U S TA I N A B L E VA L U E F O R A L L E Protecting the planet • Upgrading Decarbonization Targets: Carbon neutral by 2030 in Scope 1 and 2, and Net Zero in all three scopes before 2040 • New Biodiversity Plan: Targeting to have net positive impact by 2030 • Reducing emission
Slide 17: Shareholder remuneration
Shareholder remuneration P R O P O S E D S U P P L E M E N TA R Y R E M U N E R AT I O N O F E U R 0 . 3 1 / S H A R E , T O R E A C H A T O TA L D I V I D E N D O F 0 . 4 9 / S H A R E 1 Interim remuneration2 EUR 0.18/share (paid on January 31st 2023) + Supplementary remuneration EUR 0.31/share Sub
Slide 18: Agenda: Analysis of results
Agenda Analysis of results | www.iberdrola.com | 18
Slide 19: Income Statement / Group
Income Statement / Group EBITDA up 10%, to EUR 13,228 M, and Net Profit up 12%, to EUR 4,339 M… EUR M 2022 2021 % Revenues 53,949 39,113 +37.9 Gross Margin 20,199 17,062 +18.4 Net Operating Expenses -5,209 -4,227 +23.2 Levies -1,762 -829 +112.7 EBITDA 13,228 12,006 +10.2 EBIT 7,984 7,343 +8,7 Net Fi
Slide 20: Gross Margin / Group
Gross Margin / Group Gross Margin up 18%, to EUR 20,199 M, and 12% excluding FX impact REVENUES (EUR M) PROCUREMENTS (EUR M) 53,949.4 +37.9% 39,113.5 +53.0% 33,750.0 22,051.7 2021 2022 2021 2022 Revenues up 38%, to EUR 53,949 M, and Procurements up 53%, to EUR 33,750 M www.iberdrola.com | 20
Slide 21: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses up 5.6% excluding FX and non recurring impacts… Net Operating Expenses (EUR M) 2022 2021 vs’21 (%) Net Personnel Expenses -2,517.8 -2,287.3 +10.1% External Services -3,601.9 -2,935.7 +22.7% Other Operating Income 910.6 994.6 -8.5% Total Net Opera
Slide 22: Results by Business / Networks
Results by Business / Networks Networks Reported EBITDA grows 21.0%, to EUR 6,526 M 25% Spain Brazil 30% 6,525.8 17% United Kingdom United States 29% Balanced EBITDA contribution across geographies www.iberdrola.com | 22
Slide 23: Results by Business / Networks
Results by Business / Networks EBITDA EUR 1,608.0 M (-1.5%): SPAIN • EBITDA decrease due to net impact of both positive and negative regulatory and legal issues. EBITDA BRL 10,524.3 M (+13.1%): BRAZIL • Growth driven mainly by tariff adjustments in Distribution. EBITDA IFRS USD 1,988,0 M (+34.4%): •
Slide 24: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers Energy Production and Customers EBITDA up 4.3%, to EUR 6,699 M RoW 6% Mexico 13% M Eur Brazil 6% 6,699.2 52% Spain United States 11% United Kingdom 12% www.iberdrola.com | 24
Slide 25: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers EBITDA EUR 3,460.2 M (-4.1%): • EBITDA decrease due to: SPAIN o Group's policy of maintaining prices despite high-cost environment. o Lower renewable production. o Positive Court Rulings in Q4’21. EBITDA USD 759.7 M (-10.7%): UNITED • Positive im
Slide 26: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers EBITDA USD 899.1 M (-2.4%): MEXICO • Positive impact from Texas cold snap losses in Q1 2021. • Offset by lower thermal production. EBITDA BRL 2,184.0 M (+36.3%): BRAZIL • Mainly driven by better performance of the generation business and increase
Slide 27: D&A and Provisions and Bad Debt
D&A and Provisions and Bad Debt D&A and Provisions up 12%, to EUR 5,244 M, and +6% excluding FX impact Eur M +12% -5,244 -4,663 -470 -369 Bad Debt Provisions Other Provisions -94 -97 -4,197 D&A -4,680 2021 2022 Improvement of key ratios vs 2021: Bad Debt Provisions/Billing at 1.1% and Overdue Debt/B
Slide 28: Net financial results
Net financial results Recurring Net Financial Results up EUR 628 M, to EUR 1,838 M, due to USD and BRL appreciation affecting debt and derivatives, higher average debt balance and increased cost of debt mainly in BRL NET FINANCIAL RESULT (EUR M) COST OF DEBT -117 -1,838 +67 bps -145 -202 4.27% -163
Slide 29: Net debt evolution
Net debt evolution FFO up 25%, compensates gross investments and FX Eur M 2,750 1,084 1,189 43,749 39,119 -11,123 10,730 FX Other2 Dividend1 Gross FFO Investments Net debt Net debt Dec 2021 Dec 2022 Limited impact from working capital and collateral position allows Net Debt to remain below Eur 44 Bn
Slide 30: Financial ratios
Financial ratios FFO / Adjusted Net Debt improves 2.4 p.p. as strong cash flow generation more than compensates Net Debt increase ADJUSTED CREDIT METRICS 2022 20211 Adjusted Net Debt / EBITDA 3.3x 3.2x FFO 2 / Adjusted Net Debt 25.4% 23.0% RCF / Adjusted Net Debt 22.0% 20.6% Adjusted Leverage 42.8%
Slide 31: Liquidity and maturities
Liquidity and maturities As of today, our liquidity totals EUR 23.5 bn covering 26* months of financing needs with an average life of debt above 6 years 21,119 Cash 5,626 Available financing 2,218 Credit lines 6,037 4,584 5,019 4,521 15,686 4,119 2023 2024 ** 2025 *** 2026 2027 2028+ Hybrid maturing
Slide 32: Net Profit / Group
Net Profit / Group Net Profit up 12%, to EUR 4,339 M EUR M 2022 2021 vs’21 (%) EBIT 7,983.9 7,342.8 +8.7% - Net Financial Expenses -1,837.5 -1,003.2 +83.2% - Equity Method 74.5 -74.1 n/a - Corporate Tax -1,161.3 -1,914.0 -39.3% - Minorities -720.9 -466.8 +54.4% Net Profit 4,338.6 3,884.8 +11.7% Taxe
Slide 33: Agenda: Conclusions
Agenda Conclusions | www.iberdrola.com | 33
Slide 34: Conclusion: 2023 Outlook
Conclusion: 2023 Outlook A N T I C I PAT I N G TA R G E T S S E T I N O U R S T R AT E G I C P L A N Production increase driven by hydro and wind resource normalization Impact of new Revenue Tax in Spain Investment of more than Eur 11,000 M (1.2% of revenues in Spain) ~3,000 MW of additional renewab
Slide 35: Conclusion: 2023 Outlook
Conclusion: 2023 Outlook 2023 NET PROFIT OUTLOOK GROWING AT MID SINGLE-DIGIT IN LINE WITH CAPITAL MARKETS DAY 2023-25 FORECASTS 2023 Mid Guidance single-digit Reported EUR 4.3 Bn EUR ~200 M of revenue tax contribution (1.2% sales in Spain) 8%-10% 2022 2023e 8% - 10% GROWTH EXCLUDING REVENUE TAX IN S
Slide 36: Agenda: Annex I
Agenda Annex I | www.iberdrola.com | 36
Slide 37: Diversified financing portfolio at competitive rates
Diversified financing portfolio at competitive rates The deep diversification of funding sources during 2022 provided flexibility to tap the market at competitive conditions, raising ur 1 .7 Bn to date through several products… New financing 2022: EUR 12.697 M Main transactions Bond market TEI Hybri
Slide 38: ESG financing
ESG financing In 2022 Iberdrola signed EUR 10.7* bn of new ESG financing bringing the cumulative total to EUR 48.6* bn NEW ESG FINANCING 2022: EUR 10,662 M * TOTAL ESG FINANCING: EUR 48,624 M * Green Sustainable 84% of newly signed financing are ESG transactions, reaffirming Iberdrola's Structured B
Slide 39: ESG+F
ESG+F 2022 2025e 2030e Specific emissions (global mix) Carbon Neutral in electricity generation in 2030 g CO2 /kWh 88 <70 Carbon neutral* % assets with biodiversity assessment Biodiversity: Net positive impact in 2030 and Neutrality Plan n/a 20% 100%/ Net Positive Trees, in Million Biodiversity: Con