Slide 1: Results Presentation First Quarter
Results Presentation First Quarter May 12, 2021 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 first quarter of the 2021 fiscal year. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity,
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 / First Quarter / 2021 / 4
Slide 5: Performing better than expected in the first months of 2021
Highlights Performing better than expected in the first months of 2021 Offsetting Better Ongoing + business performance + Acceleration of investments + improvement in financial profile - unexpected negative factors • Higher revenues: • Major projects: • Key ratios improving: • COVID-19: • Demand rec
Slide 6: Q1 2021 Adjusted Net Profit up 12% to EUR 1,082 M
Highlights of the period Q1 2021 Adjusted Net Profit up 12% to EUR 1,082 M Reported EBITDA grows 2% to EUR 2,814 M (+12% excluding COVID and fx impact) Gross investments of EUR 2,507 M (+45%) 8,700 MW of Renewables under construction 65% increase in Networks investments Improving liquidity and finan
Slide 7: EBITDA: Reported EBITDA up 2%
EBITDA Reported EBITDA up +2% (+12% excluding COVID and fx impact) 81% in A-rated countries Breakdown by business Networks • New Rate Case in New York approved in November 2020 Generation • Brazil: Higher contribution from transmission and tariff reviews & Supply 19% • Larger rate base in UK Network
Slide 8: Gross investments acceleration up to EUR 2,507 M (+45%)
Gross Investments Gross investments acceleration up to EUR 2,507 M (+45%)… Q1 Gross Investments by business Generation Corporate & other 1% & Supply 7% 2,507 50% Renewables EUR M Networks 42% ...92% allocated to Networks and Renewables Results Presentation / First Quarter / 2021 / 8
Slide 9: ~8,700 MW of renewables under construction
Renewable capacity under construction Investments in Renewables growing +29%, with ~8,700 MW already under construction… Renewable capacity Renewable capacity under construction by technology under construction by geography MW Spain Offshore wind 2,600 20% 31% USA Onshore wind 2,000 Solar PV 2,800 ~
Slide 10: 18,750 MW under construction or secured
Renewable Installed capacity … reaching 18,750 MW under construction or secured Renewable capacity1 under construction or secured (GW) 2021 2022 2023 2024 2025 Total Offshore wind --- --- 500 1,300 800 2,600 Onshore wind 1,350 2,200 1,100 100 --- 4,750 Hydroelectric 1,000 --- 200 --- --- 1,200 Solar
Slide 11: Significant expansion of offshore wind pipeline
Offshore wind Significant expansion of offshore wind pipeline in last 12 months West of Duddon Sands East Anglia ONE 389MW 714MW Vineyard Wind 1 800MW East Anglia Hub Sweden 3,100MW up to 3,600MW Ireland Park City Wind 3,000MW 804MW Flagship 10MW Japan (Seihoku oki) Areas 501 / 522 up to 600MW 3,400
Slide 12: Offshore wind projects under construction progressing according to Plan
Offshore wind Projects under construction progressing according to Plan St. Brieuc • Onshore construction work ongoing On track • Foundation works already launched in May COD 2023 • Permitting and authorization process completed On track • Fabrication of main components underway COD 2023-24 On track
Slide 13: New auctions offer additional routes to market
Offshore wind New auctions offer additional routes to market in the upcoming 12-24 months Auctions for current projects Auctions for new pipeline Rhode Island Poland 14GW Ireland ~5GW USA 501 South RoL (1.2GW) (Total auction capacity) Tariff (Country target 2022-25) Massachusetts 522 area (2.4GW) Se
Slide 14: Networks investments increase by 65%
Networks Networks investments increase by 65%... Increasing investments in Distribution: New Rate Cases Total Networks investments 1,261 EUR M USA NECEC (233 km – delivering 1,200 MW renewable energy): Started construction Organic investments 858 EUR M Rochester Area Reliability Project: Completed 1
Slide 15: Financial Strength
Financial Strength Cash flow up 7%, driving an improvement of financial ratios Operating Cash Flow (FFO1) FFO / Adjusted Net Debt2 +7% 2,270 +140 bp 2,128 23.2% 21.8% Q1 20 Q1 21 Q1 20 Q1 21 Leaders in green financing, with EUR 32.1 Bn in Green / Sustainable financing and Liquidity3 reaching EUR 17
Slide 16: Avangrid results
Avangrid results (USD, US GAAP) Avangrid’s Adjusted Net Profit grows +50% to USD 354 M EBITDA up +21% to USD 752 M driven by improvements in Renewables and Networks Gross investments of USD 663 M (+24%) • 1,300MW of onshore wind and solar and 1,600 MW of offshore wind under construction • 42% increa
Slide 17: Neoenergia's Net Profit grows +75% up to BRL 1,007 M
Neoenergia results (BRL, BR GAAP) Neoenergia’s Net Profit grows +75% up to BRL 1,007 M Reported EBITDA grows +50% to BRL 2,284 M Gross organic investments BRL 2,027 M (+85%) • 49% increase in Networks driven by transmission (2x) and distribution (+30%) • BRL 460 M invested in Renewables (>1,000 MW -
Slide 18: Increasing climate ambition globally
Policies and regulation Increasing climate ambition globally Agreement on the European Climate Law for a 55% reduction in UE’s emissions by 2030 and Net Zero by 2050 UK Government target to reduce the UK’s emissions by 78% by 2035 US Administration’s goal of 50%-52% emissions cut by 2030 Results Pre
Slide 19: Green electrification, at the core of new governments policies
Policies and regulation Green electrification, at the core of new governments policies… United States Spain American Jobs Plan Climate Change and Energy Transition Law ▪ 100 Bn USD to boost US power infrastructure ▪ Increasing ambition for 2030: 23% emissions reduction, 74% ▪ Additional tax incentiv
Slide 20: Decarbonization track record and prospects
Decarbonization track record and prospects …fully in line with Iberdrola’s pioneering model after 20 years of execution Improving our carbon footprint, …and in the best position already far below competitors… to lead the road to “Net Zero” Iberdrola CO2 emissions in Europe (gr/kWheq) 51 -45% Up to 9
Slide 21: Strategic alliances
Strategic alliances Electrification, key to achieve Net Zero targets: Leading strategic alliances to accelerate investments Financial Energy Mobility Chemical Others Services • Renewable supply • Sustainable • Co-investment • Offshore wind • Green hydrogen mobility • Batteries in renewables • Green
Slide 22: Analysis of Results
Agenda Analysis of Results Results Presentation / First Quarter / 2021 / 22
Slide 23: Adjusted EBITDA up +3.9% to EUR 2,879 M
EBITDA / Group Adjusted EBITDA up +3.9%, to EUR 2,879 M, … EUR M +12.2% +3.9% 3,110 +1.5% +231 +65 2,879 2,814 2,772 Q1 2020 Q1 2021 COVID Q1 2021 Fx Q1 2021 Reported Reported effect Adjusted impact Adjusted EBITDA* EBITDA EBITDA EBITDA ex fx … and excluding fx is up 12.2%, reaching EUR 3,110 M *Q1
Slide 24: Gross Margin up 1.3%
Gross Margin / Group Gross Margin up 1.3%, to EUR 4,604.1 M, with a negative fx impact of EUR 356.4 M, … EUR M Revenues EUR M Procurements +7.0% +12.4% 9,425.9 10,088.4 4,881.2 5,484.3 Q1 2020 Q1 2021 Q1 2020 Q1 2021 … and grows 10.7% excluding fx and COVID impact Results Presentation / First Quarte
Slide 25: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses flat at EUR 1,048.7 M, as Group’s growth is compensated by fx, and +9.5% excluding fx, driven by the contribution of new businesses (Neo Distribução Brasília, Infigen, Aalto Power) and storm costs EUR M Net Operating Expenses Q1 2021 Q1 2020 vs Q
Slide 26: Results by Business / Networks
Results by Business / Networks Networks Reported EBITDA grows 4.3%, to EUR 1,312.6 M, … EBITDA by Geography (%) Key Drivers Strong operating performance in all Brazil 25% geographies … 32% Spain 1,312.6 … despite COVID impact on demand: EUR United 23% -26 M, to be partially recovered in the future S
Slide 27: Results by Business / Networks
Results by Business / Networks Spain EBITDA EUR 424.9 M (EUR +34.4 M; +8.8%): • Lower remuneration established for 2021 in the regulatory framework (5.58%): EUR -7 M. • Settlements from previous years as a consequence of improvements in quality and opex: EUR +15 M. • Net Operating Costs reduction dr
Slide 28: Results by Business / Renewables
Results by Business / Renewables Renewables Reported EBITDA up 27.8%, to EUR 932.1 M,… EBITDA by Geography (%) Key Drivers IEI* Mexico 10% Spain Production increases +19.1%, due to … 4% Brazil 35% 3% … higher installed capacity: 35,205 MW (+8.5%) … 932.1 23% … and higher load factor: 29.5% vs 26.9%
Slide 29: Results by Business / Renewables
Results by Business / Renewables Spain EBITDA EUR 321.7 M (EUR +138.9 M; +76%): • Higher output (+40.1%) driven by hydro (+53.7%) and onshore production (+16.6%). • Higher PV capacity, +709 MW (+127.7%), reaching 1,264 MW of installed capacity. • Higher sales price to the Supply business. US EBITDA
Slide 30: Results by Business / Generation and Supply
Results by Business / Generation and Supply Generation & Supply Reported EBITDA falls 31.8% to EUR 528.0 M, … Key Drivers EB EBITDA by Geography (%) Lower production from thermal and nuclear generation … Brazil 3% … and cold snaps impacting negatively Spain and Mexico … Mexico 23% 52% 528.0 Spain …
Slide 31: Results by Business / Generation and Supply
Results by Business / Generation and Supply Spain EBITDA EUR 279.5 M (EUR -181.0 M; -39.3%): • Lower output 7,278 GWh (-12.7%). • Higher energy purchases at higher prices vs Q1 2020, with additional impact of extreme weather conditions. Mexico EBITDA USD 147.4 M (USD -74.4 M; -33.5%): • Negative imp
Slide 32: EBIT / Group
EBIT / Group EBIT grows 3.0%, to EUR 1,712.7 M, and +14.4% excluding fx and COVID impact EUR M EBIT EUR M D&A and Provisions -0.6% +3.0% -1,108 -1,101 -95 -115 Provisions 1,664 1,713 -1,013 D&A -986 Q1 2020 Q1 2021 Q1 2020 Q1 2021 D&A fall 2.6%, to EUR 986 M, but grow 4.3% excluding fx, due to highe
Slide 33: Net Financial Expenses / Group
Net Financial Expenses / Group Net Financial Expenses up EUR 85 M, to EUR 265 M, due to positive fx hedges accounted for in Q1 2020 … Net Financial Exp. evolution (EUR M) Cost of Debt -265 -180 -85 3.45% -12 bps 3.33% Mar 2020 Mar 2021 Mar 2020 Mar 2021 … despite lower cost and lower average debt Re
Slide 34: Adjusted Net Debt / Group
Adjusted Net Debt / Group FFO / Adjusted Net Debt up 1.4 p.p. vs Mar 2020 to 23.2% Adjusted Net Debt 1 (EUR M) Adjusted credit metrics Mar 2020 3 Mar 2021 2,3 37,624 Adjusted Net Debt 1 / EBITDA 3.6x 3.6x 36,305 397* FFO / Adjusted Net Debt 1 21.8% 23.2% RCF / Adjusted Net Debt 1 19.9% 21.0% Adjuste
Slide 35: Green / Sustainable financing
Green / Sustainable financing Two recent transactions reinforces the Group’s leadership in sustainable financing Subscribed with 21 banks at pre- Covid levels Margin linked to 2 sustainable indicators: Multicurrency • SDG 7, SDG 13: reduce emissions intensity to 70 gr/kWh in 2025 • SDG 5: increase t
Slide 36: Net Profit / Group
Net Profit / Group Adjusted Net Profit up 12.4%, to EUR 1,082.4 M EUR M Adjusted Net Profit 1,272 1,082 57 (3) 1,025 309 (2) 963 +12.4% Q1 2020 Q1 2020 Q1 2021 Q1 2021 Reported Adjusted Adjusted Reported Net Profit(1) Net Profit Net Profit Net Profit (1) Q1 2020 Reported Net Profit excludes EUR 15 M
Slide 37: Taxes
Taxes • In March 2021 the UK Government presented a new tax package. • Among others, it included an increase of the corporate tax rate from 19% to 25%, starting 1st April 2023. • Expected ~Eur -450 M of deferred tax impact in 2021 (non cash item). • Impact to be accounted when finally enacted, after
Slide 38: Conclusions
Agenda Conclusions Results Presentation / First Quarter / 2021 / 38
Slide 39: The execution of 2020-2025 Plan ahead of expectations
Conclusions The execution of 2020-2025 Plan ahead of expectations… Acceleration of USA and Brazil: ~75% of renewable Network investments: • Better outlook capacity increase • Progress on the integration new regulatory frameworks already under construction of: PNM Resources and and transmission or se
Slide 40: Reaffirming Net Profit guidance for 2021
Conclusions Reaffirming Net Profit guidance for 2021 New capacity Net Profit EUR 3.7- 3.8 Bn Networks investments * excluding potential non-recurrent and non-cash tax items Acceleration and new rate cases Operational efficiencies 0.44 Dividend EUR/share …and outlook for 2021 shareholder remuneration
Slide 41: Annex 1: Iberdrola Retribución Flexible program July 2021
Agenda Annex 1: “Iberdrola Retribución Flexible” program July 2021 Results Presentation / First Quarter / 2021 / 41
Slide 42: Iberdrola Retribución Flexible program July 2021
“Iberdrola Retribución Flexible” program July 2021 LAST TRADING DATE Closing prices considered for - Announcement of capital determining the increase in BORME average price used to - Last day to buy IBE shares Last day of rights PAYMENT DATE calculate number of and participate in trading period righ
Slide 43: Annex 2
Agenda Annex 2 Results Presentation / First Quarter / 2021 / 43
Slide 44: Group results
Group results For fiscal year 2021, IBERDROLA Group has changed the format of its income statement, eliminating the heading "Profit/(loss) on non-current assets" The items that were previously included in this heading are now classified as follows: - Gains or losses on disposals of fixed assets and
Slide 45: Income Statement / Group
Income Statement / Group EUR M Q1 2021 Q1 2020 % Revenues 10,088.4 9,425.9 +7.0 Gross Margin 4,604.1 4,544.8 +1.3 Net Operating Expenses -1,048.7 -1,046.8 +0.2 Levies -741.3 -726.5 +2.0 EBITDA 2,814.1 2,771.5 +1.5 EBIT 1,712.7 1,663.5 +3.0 Net Financial Expenses -265.4 -180.3 +47.2 Equity Results -3
Slide 46: COVID impact / Group
COVID impact / Group Two main direct COVID impacts considered, totalling EUR 84 M in Q1 2021, demand (EUR 65 M) accounted for within EBITDA and bad debt (EUR 19 M) at EBIT DEMAND(1) BAD DEBT(2) EUR M Generation Generation Networks Networks &Supply &Supply SPAIN 0 8 - 5 UK 8 17 - 5 US 9 - 4 - MEXICO
Slide 47: Liquidity and maturities
Liquidity and maturities Adequate and diversified liquidity totals EUR 17 bn* covering 21 months of financing needs Liquidity by instrument (Eur M) Maturities (Eur M) Cash 2,941 Available Loans 1,163 Backup Lines Credit 9,800 Lines 2,808 Comfortable maturity profile with an average debt life of 6.5
Slide 48: Green / sustainable financing
Green / sustainable financing Iberdrola signed EUR 7.5 bn of new sustainable transactions and EUR 2.0 bn of new green financing for a total of EUR 32.1 bn in green/sustainable financing* Green / sustainable financing: Eur 32,090 M Green financing: Eur 15.713 M Iberdrola remains the world leading gro
Slide 49: Sustainable Finance and EU Taxonomy
Sustainable Finance and EU Taxonomy Up to 90% of Iberdrola’s long term Plan aligned with EU taxonomy… Aligned1 economic activities Total gross organic investments 2020-2025 Windpower (onshore and offshore) Photovoltaic 83-90%2 Hydropower Energy storage (pumped hydro) Transmission of electricity Dist
Slide 50: Q1 2021 investments
Q1 2021 investments Spain UK US Brazil Mexico IEI Total Networks 125.7 150.9 373.1 611.5 - - 1,261.3 Renewables 326.0 43.5 351.7 83.0 2.8 240.3 1,047.4 Generation & Supply 77.3 41.9 - 2.6 31.1 22.9 175.8 Other 17.4 3.6 - 1.0 0.2 - 22.2 Total 546.5 239.9 724.8 698.1 34.1 263.2 2,506.6 Results Present
Slide 51: Project Pipeline
Project Pipeline High quality pipeline of 77,900 MW with a success rate above 60% Pipeline by technology (MW) Pipeline by geography (MW) 33,900 25,200 24,900 19,700 14,500 15,600 Offshore 50% Onshore 13% 7,100 4,400 6,200 63% 3,400 900 Iberia Offshore Onshore Solar Hydro Batteries wind wind PV Aroun
Slide 52: Progress on 2020-2025 Plan
Progress on 2020-2025 Plan Renewable capacity under construction or secured (MW) 2021 2022 2023 --- 200 --- 1,200 --- 1,400 --- 600 --- 1,600 --- 2,200 --- 200 --- 800 --- 1,000 --- 50 --- 50 150 250 --- --- --- 100 --- 100 --- --- --- --- 100 100 --- 250 --- 300 --- 550 --- 800 --- 900 --- 1,700 --
Slide 53: Average power price and production sold forward
Average power price and production sold forward Production sold forward 2021 2022 (1) (2) Price % Price % Iberia (EUR/MWh) 75-80 100% 75-80 70% United Kingdom (GBP/MWh) 70-75 100% 70-75 100% (1) Estimated price for average customer portfolio (2) Including retail roll-over contract production sold fo
Slide 54: 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 RC Mar 20 - Feb 21 Mar 21 – Feb 22 Mar 22 – Feb 23
Slide 55: Next Generation EU: Spain's Recovery Plan (1/2)
Next Generation EU: Spain's Recovery, Transformation & Resilience Plan (1/2) Leading or taking part in 175 projects with total investments of EUR 30,000 M with key partners like Fertiberia, Volkswagen-Seat, Irizar, Navantia, … Area Initiative Projects Floating offshore wind: Industrial scale farms +
Slide 56: Next Generation EU: Spain's Recovery Plan (2/2)
Next Generation EU: Spain's Recovery, Transformation & Resilience Plan (2/2) Area Initiative Projects Public charging infrastructure for electric cars 2 Private charging infrastructure for electric cars 2 National fast and superfast corridors for electric vehicles 2 I+D+i in charging infrastructure
Slide 57: ESG - Sustainability Indicators
ESG - Sustainability Indicators Sustainability Indicators Q1 2021 Q1 2020 (*) Contribution to GDP (Gross Margin) 0.59% 0.52% (*) Contribution to GDP (Net revenues) 1.15% 1.22% Net Profit (EUR million) 1,025.2 1,272.7 Dividend yield (%)(**) 3.60% 4.15% CO2 emissions over the period (gr, CO2 /KWh): Eu