Slide 1: Results Presentation First Quarter
RESULTS PRESENTATION First Quarter 26 April 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 first quarter of the 2023 fiscal year.
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: Highlights of the period
Highlights of the period | www.iberdrola.com |4
Slide 5: Highlights of the period
Highlights of the period NET PROFIT OF EUR 1,485 M DRIVEN BY STRONG OPERATING PERFORMANCE Recovery of previous retail deficit in the UK EBITDA grows 38% to EUR 4,064 M Better operating performance in EU: lower wholesale prices and output normalization Growth in networks and renewables Investments of
Slide 6: EBITDA reaches EUR 4,064 M, up 38%
EBITDA EBITDA REACHES EUR 4,064 M, UP 38% BREAKDOWN BY BUSINESS & COUNTRY NETWORKS 61% 39% Networks • Higher asset base Energy Production & Customers ~4,064 • Positive impact of annual tariff adjustments in US and Brazil EUR M • Regulatory frameworks protecting from higher inflation ENERGY PRODUCTIO
Slide 7: Investments up 9% to EUR ~10,400 M
Investments INVESTMENTS UP +9% TO EUR ~10,400 M IN THE LAST 12 MONTHS WITH EXPECTED ACCELERATION IN COMING QUARTERS GROSS INVESTMENTS BY BUSINESS (Last 12 months) Corporate & other • Improving diversification Other Energy Production 2% & Customers • EUR ~4,800 M invested in 12 months NETWORKS 7% • A
Slide 8: Offshore Wind
Offshore Wind CONSOLIDATING OFFSHORE WIND EXPANSION: PLAN TO 2025 SECURED Construction In operation Capacity Route to market progressing on budget St. Brieuc 2Q2023 496 MW Tariff secured for 20 years PPAs signed for 100% of capacity Under Vineyard Wind 4Q2023 806 MW with average tenor of 20 years co
Slide 9: Financial Strength
Financial Strength F I N A N C I A L R AT I O S I M P R O V I N G D R I V E N B Y C A S H F L O W G E N E R AT I O N … FFO1/ADJUSTED NET DEBT DEBT STRUCTURE2 (Q1 2023) +130 pbs 25.3% 25.4% Fixed Rates 24.0% Variable Rates 74% (87% ex. Brazil) ~43.7 26% EUR Bn AVERAGE DEBT MATURITY OF 6 YEARS Q1 2022
Slide 10: Asset rotation and partnerships: Mexico
Asset rotation and partnerships: Mexico A G R E E M E N T T O S E L L 6 0 % O F I B E R D R O L A’ s B U S I N E S S I N M E X I C O , R E TA I N I N G A L L P R I VAT E C U S T O M E R S A N D R E N E W A B L E G R O W T H • Selling 13 generation facilities TRANSACTION • Transaction complying with
Slide 11: Asset rotation and partnerships: Brazil
Asset rotation and partnerships: Brazil AGREEMENT WITH GIC TO CO -INVEST IN TRANSMISSION BUSINESS IN BRAZIL 50%-50% partnership in 8 operating transmission assets (1,865 km of lines) for BRL 1,200 M Option to include in the joint vehicle assets under construction or from future auctions at COD Impro
Slide 12: Asset rotation and partnerships
Asset rotation and partnerships ASSET ROTATION PLAN ALREADY EXECUTED… ASSET ROTATION AND PARTNERSHIPS EUR 7.5 Bn PARTNERSHIPS WITH GLOBAL FUNDS ✓ EUR 1.2 Bn ✓ EUR 400 M NEW AGREEMENTS WITH STRATEGIC PARTNERS ✓ Agreement to coinvest up to ✓ Adding new solar PV capacity to reach EUR 1,000 M in chargin
Slide 13: Routes to market
Routes to market SALES OF ~116 TWH PER ANNUM SECURED THROUGH RETAIL & SME CUSTOMERS, LONG TERM PPAs AND REGULATED MECHANISMS… SECURED ROUTES TO MARKET PPA with Major Global Companies multi-country multi-country multi-country Regulated • Avg. duration: ~15yrs Residentials & SMEs • Avg. Contract durat
Slide 14: AVANGRID and Neoenergia Results (Local GAAP)
AVANGRID and Neoenergia Results (LOCAL GAAP) AVANGRID’S ADJUSTED EBITDA OF USD 633 M (-1%) NEOENERGIA’S EBITDA UP +14% TO BRL 3,620 M Net Profit of USD 245 M affected by non-recurring impacts Net Profit of BRL 1,215 M in 1Q’22 (USD 181 M CIP restructuring deal) Gross investments of USD 2,670 M inves
Slide 15: Energy Context: 2 years of crisis caused by gas markets
Energy Context: 2 years of crisis caused by gas markets E N E R G Y C R I S I S I S D R I V I N G N E W P O L I C I E S T O S P E E D U P E L E C T R I F I C AT I O N …WITH NEW POLICIES BOOSTING GAS PRICES GRADUALLY NORMALIZING… ELECTRIFICATION Rising gas price due to fossil fuel dependence now Powe
Slide 16: Regulation and policies to boost electrification
Regulation and policies to boost electrification Commission proposal on “Reform of Electricity Market Design”: key aspects • Market is functioning properly • “Evolution” to more Single Market and long-term contracting (PPAs) • No retroactivity: voluntary “CfDs” auctions for new renewable investments
Slide 17: Regulation and policies to boost electrification
Regulation and policies to boost electrification Renewable Energy Directive • Increasing renewable targets from 32% to 42.5% of total energy consumption by 2030 • Renewable targets by sector: 29% for transport, 42% for H2 production and 49% for residential energy consumption Inflation Reduction Act
Slide 18: 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 • Accelerating path to zero emissions • Reinforcing our commitment to the circular economy: ✓ Recycling blade factory ✓ Recycling ion-lithium battery plant S Supporting communities • Strengthening local supply cha
Slide 19: Analysis of results
Analysis of results | www.iberdrola.com | 19
Slide 20: Income Statement / Group
Income Statement / Group EBITDA up 38%, to EUR 4,065 M, and Net Profit up 40%, to EUR 1,485 M… EUR M Q1 2023 Q1 2022 % Revenues 15,461 12,150 +27.2 Gross Margin 6,709 4,685 +43.2 Net Operating Expenses -1,465 -1,151 +27.2 Levies -1,179 -583 +102.2 EBITDA 4,065 2,951 +37.7 EBIT 2,738 1,747 +56.7 Net
Slide 21: Net Profit evolution
Net Profit evolution Strong growth will moderate during the year due to the fact that during this quarter Iberdrola had… 1,485.3 … higher production and higher sales +40.4% 1,058.3 … much lower energy purchases at much lower prices than in Q1 ‘22 … 2022 UK retail deficit recovered in Q1 ’23 which wa
Slide 22: Gross Margin / Group
Gross Margin / Group Gross Margin up 43%, to EUR 6,709 M, and 40% excluding FX and reconciliation impacts in US REVENUES (EUR M) PROCUREMENTS (EUR M) 15,460.6 +27.2% 12,150.0 +17.2% 8,752.1 7,464.6 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Revenues up 27%, to EUR 15,461 M, and Procurements up 17%, to EUR 8,75
Slide 23: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses up 7% excluding FX, extraordinaries and reconciliation impacts in the US Net Operating Expenses (EUR M) Q1 2023 Q1 2022 vs’22 (%) Net Personnel Expenses -714.4 -547.4 +30.5% External Services -954.2 -780.7 +22.2% Other Operating Income 203.4 176.
Slide 24: Results by Business / Networks
Results by Business / Networks Networks Reported EBITDA grows 4.5%, to EUR 1,659 M 26% Spain Brazil 36% 1,659.0 15% United Kingdom United States 23% Balanced EBITDA contribution across geographies www.iberdrola.com | 24
Slide 25: Results by Business / Networks
Results by Business / Networks SPAIN EBITDA EUR 434.0 M (+6.1%): • EBITDA increases as a consequence of the regularization on revenues due to investments made in previous years. BRAZIL EBITDA BRL 3,290.4 M (+18.7%): • Growth driven mainly by tariff adjustments in Distribution and higher contribution
Slide 26: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers Energy Production and Customers EBITDA up 77.4%, to EUR 2,414 M RoW 5% Mexico 9% Brazil 3% United States 6% 2,413.5 49% Spain* United Kingdom 27% * 1.2% revenue tax in Spain included in corporation while for presentation purposes appears in Energ
Slide 27: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers EBITDA EUR 1,190.1 M (+113.5%): • EBITDA increase thanks to: SPAIN o Higher production, especially hydro and nuclear (+3.1 TWh) and higher sales. o Lower energy purchases at much lower prices than last year. o Positive effect in gas management vs
Slide 28: Results by Business / Energy Production and Customers
Results by Business / Energy Production and Customers EBITDA USD 222.7 M (+3.7%): MEXICO • Higher contribution from thermal assets thanks to new capacity in operation since May ‘22 (Tamazunchale II, 514 MW), partially compensated by lower wind load factor. EBITDA BRL 412.0 M (-2.0%): BRAZIL • Higher
Slide 29: EBIT / Group
EBIT / Group EBIT grows 57%, to EUR 2,738 M EBIT (EUR M) D&A and Provisions (EUR M) 2,738 +56.7% 1,747 -1,326 -1,204 +10.2% -171 -108 Provisions -1,096 D&A -1,156 Q1 2022 Q1 2023 Q1 2022 Q1 2023 D&A and provisions up 10.2%, to EUR 1,326 M, driven by higher asset base and bad debt evolution due to in
Slide 30: Net financial results
Net financial results Net Financial Results up EUR 111 M, to EUR 510 M, due to higher average debt and interest rates, partially offset by FX derivatives results NET FINANCIAL RESULT (EUR M) COST OF DEBT +96 bps 5.08% -68 +53 -74 -510 -22 4.12% -399 Debt result +78 bps (ex NEO) 3.63% 2.85% FX Q1 202
Slide 31: Financial ratios and Adjusted Net Debt / Group
Financial ratios and Adjusted Net Debt / Group FFO / Adjusted Net Debt improves 1.3 p.p. as 14% average growth in yearly FFO exceeds 8% average growth in net debt ADJUSTED CREDIT METRICS ADJUSTED NET DEBT (EUR M) Mar 2023 Mar 20221 Adjusted Net Debt / EBITDA 3.1x 3.3x 43,749 43,722 FFO 2 / Adjusted
Slide 32: Net Profit / Group
Net Profit / Group Net Profit up 40%, to EUR 1,485 M EUR M Q1 2023 Q1 2022 vs’22 (%) EBIT 2,738.0 1,747.1 +56.7% - Net Financial Expenses -510.1 -399.5 +27.7% - Equity Method 3.4 215.8 -98.4 - Corporate Tax -591.9 -311.5 +90.0% - Minorities -154.0 -193.6 -20.5% Net Profit 1,485.4 1,058.3 +40.4% Lowe
Slide 33: Conclusions
Conclusions | www.iberdrola.com | 33
Slide 34: Conclusions: Strong operating performance expected to continue
Conclusions S T R O N G O P E R AT I N G P E R F O R M A N C E EXPECTED TO CONTINUE OVER THE REST OF THE YEAR… Speed-up of investments Improving business Reinforcing solidity conditions and financial strength ‘23e organic investment1 12 Bn Hydro reserves at average levels Asset rotation plan to 202
Slide 35: Conclusions: 2023 outlook, normalized distribution of net profit
Conclusions …FOLLOWING A MORE NORMALIZED DISTRIBUTION OF NET PROFIT A F T E R A N U N U S U A L LY L O W Q 1 2 0 2 2 NORMALIZED QUARTERLY EVOLUTION (LAST YEARS AVERAGE) Q1 Q2 Q3 Q4 2023 OUTLOOK: MID TO HIGH SINGLE DIGIT NET PROFIT GROWTH E X C L U D I N G A D D I T I O N A L E X T R A O R D I N A R
Slide 36: Conclusions: Delivering on Plan 2023-2025 ahead of schedule
Conclusions DELIVERING ON OUR PLAN 2023 -2025 AHEAD OF SCHEDULE… INVESTMENTS • ~60% of capacity additions in operation or under construction • c100% of Network investments secured with tariff frameworks closed or under advanced negotiation ASSET ROTATION PLAN PARTNERSHIPS • Co-investment agreements
Slide 37: Annex
Annex | www.iberdrola.com | 37
Slide 38: Next Generation EU. Q1 2023
Next Generation EU. Q1 2023 ~400 M€ CAPEX in projects, 130 M€ grants obtained PROJECTS IN PROGRESS CAPEX GRANTS AWARDED CASTELLÓN GH2 – BP Castellón refinery 25 MW electrolyser (50% BP partnership). > 60 M€ 15 M€ FORESA - 5MW electrolyser, green methanol in Galicia. 15 M€ 5,5 M€ LIPSA - 2,5MW electr
Slide 39: Liquidity and maturities
Liquidity and maturities As of today, our liquidity totals EUR 21 bn covering 22* months of financing needs with an average life of debt of 6 years 21.504 Cash 3,920 Available financing 2,319 Credit lines 5.973 14,688 5.040 4.574 3.924 3.133 2023 2024 2025 2026 2027 2028+ Strong liquidity to face po
Slide 40: Diversified financing portfolio at competitive rates
Diversified financing portfolio at competitive rates Continuing with the strategy of diversification of funding sources that provides flexibility to tap the market, raising Eur 1.6 Bn in new financing and extending the term of Eur 3 Bn in existing transactions … New financing 2023: EUR 1.644 M Main
Slide 41: ESG financing
ESG financing Iberdrola signed EUR 1.3 Bn of new green financing for a total of EUR 48.6 bn in ESG transactions NEW ESG FINANCING Q1 2023: EUR 1,331 M * TOTAL ESG FINANCING: EUR 48,623 M * 81% of newly signed financing are ESG transactions, reaffirming Iberdrola's 64% of total financing commitment w
Slide 42: 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