Slide 1: Iberdrola, utility of the future – Results Presentation
AJ 1) n c er OH Presentation ~ E © oh ee) lberdrola, “utility of the future” Ls IBERDROLA
Slide 2: Agenda: Highlights of the Period
Agenda Highlights of the Period 2
Slide 3: Highlights of the period
Highlights of the period EBITDA reaches EUR 9,349 M, growing 27.7% Net Investments of EUR 5,320 M Continued operational efficiency improvement (>10%) Operating Cash Flow up 13.1% up to EUR 7,328 M Net Profit grows 7.5%, reaching EUR 3,014 M Proposed Shareholder Remuneration of EUR 0.351/share vs EUR
Slide 4: Double digit growth in all businesses
EBITDA Double digit growth in all businesses… EBITDA by business Operating Highlights Networks • Positive contribution of all geographies: Generation & Supply Mostly driven by tariff increases and efficiency gains in Brazil +39.3% In spite of negative impact of storms in the US 22% Renewables •
Slide 5: Net Investments reach EUR 5,320 M
Net Investments Net Investments reach EUR 5,320 M… Corporate & other 3% Generation & Supply 20% 46% EUR 5,320 M Networks Renewables 31% 5
Slide 6: Net Investments: Networks
Net Investments: Networks …increasing regulated networks assets by 5.6% in local currency in 2018… Network investments driven by regulatory frameworks • Distribution – New York & Connecticut: up to 2019 • Distribution – Maine: up to Q4 2020* • Transmission Maine and Connecticut: FERC regulated • NEC
Slide 7: Net Investments: Generation capacity
Net Investments: Generation capacity …and adding 2,789 MW of capacity between 2018 and Q1 2019… Capacity in progress – Commissioning date New capacity MW 2018-1Q2019 Q2-Q4 2019 2020 2021 2022 2018-2022 490 224 Offshore 400 400 1,514 79 970 263 41 284 202 Onshore 18 137 66 2,548 Renewables 471 16 10
Slide 8: Operational efficiency
Operational efficiency Operational efficiencies accelerated during the year, reaching EUR 250 M … Net Operating Expenses to Gross Margin 31.2% 30.0%1 -429 b.p. 26.9 % FY 2017 FY 2018 …thanks to measures taken mostly in Brazil 1 Excluding one-off impacts in 2017:efficiency measures and non-operating
Slide 9: Operating Cash Flow up 13.1%
Operating Cash Flow Operating Cash Flow up 13.1% EUR M Operating Cash Flow (FFO) 7,328 5,320 2,008 FFO Net Inv. FFO - Net Inv. FFO = Net Profit + Minority Results + Amortiz.&Prov. – Equity Income – Net Non-Recurring Results + Fin. Prov.+ Goodwill deduction + Dividends from companies accounted via eq
Slide 10: Net Profit grows 7.5%, to EUR 3,014 M
Net Profit Net Profit grows 7.5%, to EUR 3,014 M driven by new investments and efficiency gains 2018 Net Profit 5-year Net Profit evolution EUR M EUR M 3,014 Q1 Q2 Q3 Q4 CAGR: 6.7% +7.5% vs 2017 2,804 923 2,705 838 681 572 2,422 2,327 +7.5% +1.2% Δ (%) vs 2017 -7.1% 2014 2015 2016 2017 2018 -13.5% Q
Slide 11: Neoenergia results
Neoenergia results (Local GAAP) Neoenergia’s Net Profit reaches BRL 1,536 M, +278% Results Growth Execution of efficiency measures: BRL >300 M Driven by Positive tariff reviews in networks Decrease in financial costs New transmission auction won in December adds BRL 4 Bn investments… Networks
Slide 12: AVANGRID results FY 2018
AVANGRID results FY 2018 (USD, US GAAP) AVANGRID’s Adjusted Net Profit reaches USD 684 M Executing on the growth in our strategic plan: USD 1.7 Bn investments Networks • New England Clean Energy Connect (NECEC) interconnection between Canada and Massachusetts is on track for COD 2022 • New rate plan
Slide 13: Shareholder Remuneration
Shareholder Remuneration Proposed supplementary remuneration of EUR 0.2/share payable in July, to reach a total dividend of EUR 0.351/share… Interim remuneration1 EUR 0.151/share (paid on February 5th 2019) Supplementary remuneration + EUR 0.2/share Subject to approval at AGM (payable in July 2019)
Slide 14: Analysis of Results
Agenda Analysis of Results 14
Slide 15: Income Statement / Group
Income Statement / Group Reported Net Profit up +7.5%, to EUR 3,014.1, despite currency devaluation: USD -5.7%, GBP -0.9% and BRL -19.5%, EUR -110 M at Net Profit level vs 2017 EUR M 2017 2018 Var. % Revenues 31,263.3 35,075.9 +3,812.6 +12.2 Gross Margin 13,363.8 15,435.1 +2,071.3 +15.5 Net Operatin
Slide 16: Gross Margin / Group
Gross Margin / Group Gross Margin up 15.5%, to EUR 15,435.1 M,… EUR M Revenues Procurements +12.2% +9.7% 35,075.9 31,263.3 17,899.5 19,640.7 2017 2018 2017 2018 … with NEO consolidation more than offsetting fx impact 16
Slide 17: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses fall 0.4%, to EUR 4,155.2 M EUR M Net Operating Expenses 2017 2018 vs 2017 (%) Net Personnel Expenses -2,171.6 -2,020.0 -7.0% Net External Services -1,999.0 -2,135.2 +6.8% Total Net Op. Expenses -4,170.6 -4,155.2 -0.4% Fx, provisions for efficien
Slide 18: Levies / Group
Levies / Group Levies up 3.0%, to EUR 1,931.0 M, as a consequence of Spanish generation taxes, due to the hydro output and higher pool prices, non recurring reversal of regional taxes and US Networks,… -13 +73 -49 -68 -1,931.0 -1,874.5 Spanish taxes Spanish regional 2017 US Networks Fx and other 201
Slide 19: Results by Business / Networks
Results by Business / Networks Networks EBITDA up 16.2%, to EUR 4,915.0 M, … EBITDA by Geography (%) Key Figures (EUR M) 2017 2018 vs 2017 Brazil 19% Gross Margin 6,786.7 7,641.8 +855.1 (+12.6%) 35% Spain Net Op. Exp. -1,921.9 -2,079.1 -157.2 (+8.2%) 4,915.0 United Levies -636.8 -647.7 -10.9 (-1.7%)
Slide 20: Results by Business / Networks
Results by Business / Networks Spain EBITDA EUR 1,709.4 M (EUR +189.9 M; +12.5%), due to positive settlements of previous years and the impact of 2017 positive court ruling on ICAs* US EBITDA USD 1,572.6 M (USD +67.2 M; +4.5%), driven by: + Higher contribution from rate plans + Positive IFRS impact
Slide 21: Results by Business / Renewables
Results by Business / Renewables Renewables EBITDA up 39.3%, to EUR 2,444.7 M, … EBITDA by Geography (%) Key Figures (EUR M) RoW 2017 2018 vs 2017 Mexico 10% 3% Brazil Gross Margin 2,791.5 3,610.9 +819.4 (+29.4%) 5% 38% Spain Net Op. Exp. -685.0 -698.2 -13.2 (+1.9%) United 2,444.7 States 23% Levies
Slide 22: Results by Business / Renewables
Results by Business / Renewables Spain EBITDA EUR 918.5 M (EUR +302.9 M; +49.2%), driven by higher output (+32.6%) US EBITDA USD 676.9 M (USD +79.2 M; +13.2%), with output increase (+9.7%), driven by higher installed capacity and load factor UK EBITDA GBP 457.8 M (GBP +114.5 M; +33.4%), higher load
Slide 23: Results by Business / Generation and Supply
Results by Business / Generation and Supply Generation & Supply EBITDA up 39.3% to EUR 2,038.4 M, … EBITDA by Geography (%) Key Figures (EUR M) 2017 2018 vs 2017 Brazil 5% Gross Margin 3,756.5 4,167.9 +411.3 (+11.0%) Mexico 31% 49% Net Op. Exp. -1,431.4 -1,327.4 +104.0 (-7.3%) Spain 2,038.4 Levies -
Slide 24: Results by Business / Generation and Supply
Results by Business / Generation and Supply Spain EBITDA EUR 1,000.7 M (EUR +221.3 M; +28.4%) • Higher Sales: 97,400 GWh (+12.1%) • Increase in Retail activity, including Products and Services • Net Op. Exp. additionally improve driven by provisions for efficiency plans accounted for in 2017 and cus
Slide 25: EBIT / Group
EBIT / Group Group EBIT up 100.5%, to EUR 5,439.4 M EUR M EBIT D&A and Provisions 2017 2018 vs 2017 (%) +100.5% D&A -3,183.6 -3,586.4 +12.7% Provisions -1,422.4 -323.2 -77.3% 5,439.4 2,712.6 TOTAL -4,606.1 -3,909.5 -15.1% 2017 2018 D&A and Provisions fall 15.1% due to EUR 1,193 M of non recurring Pr
Slide 26: Net Financial Expenses / Group
Net Financial Expenses / Group Net Financial Expenses up EUR 219.0 M, to EUR 1,156.1 M … Net Financial Exp. evolution (EUR M) Cost of Debt -1,156.1 -937.1 3.40% Neo 3.18% 244.4 27.9 32.4 85.7 851.4 911.7 2.99% 2.97% Dec-17 Debt Non Debt Dec-18 Dec-2017 Dec-2018 … driven by NEO integration, higher no
Slide 27: Net Debt / Group
Net Debt / Group Credit metrics improve Pro forma adjusted credit metrics** Net Debt* (EUR M) 2017** 2018 34,149 Net Debt / EBITDA 4.05x 3.65x 32,856 FFO / Net Debt 21.1% 21.5% RCF / Net Debt 18.2% 20.2% Leverage 43.4% 43.7% Dec-2017 Dec-2018 Currency appreciation in Q4 increased 2018 Net Debt by EU
Slide 28: Net Profit / Group
Net Profit / Group Reported Net Profit up +7.5%, to EUR 3,014 M , despite EUR 270 M of lower Non Recurring. Excluding them, Reported Net Profit is up 19%, to EUR 3,005 M EUR M 2017 2018 vs 2017 (%) Reported Net Profit 2,804 3,014 +7.5% - Non Recurring Results +279 +9 -97% Reported Net Profit ex. Non
Slide 29: Conclusions
Agenda a Conclusions ee du IBERDROLA www.iberdrola.com/home Iberdrola, “utility of the future” Results Presentation / 2018 29
Slide 30: 2019 Outlook
2019 Outlook Accelerating delivery of the 2018-2022 plan, with… …more REGULATED networks assets Networks Generation & Supply …more CAPACITY: +5,871 MW1 (2018 and 2019) Renewables …and further EFFICIENCY gains… …leading to mid single-digit growth at EBITDA and Net Profit level in 2019 Further details
Slide 31: Legal Notice
Legal Notice DISCLAIMER This document has been prepared by Iberdrola, S.A. exclusively for use during the This document and the information presented herein was prepared by Iberdrola, S.A. presentation of financial results of the 2018 fiscal year. As a consequence thereof, solely with respect to the
Slide 32: Legal Notice
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