Iberdrola Sa · BME:IBE
Iberdrola Sa — 9M 2020 Earnings Presentation
41 slides from Iberdrola Sa's earnings presentation, Oct 21, 2020
Slide 1: Results Presentation Nine Months
Results Presentation Nine Months October 21, 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 nine-month period ended on 30 September 2020. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or
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 / Nine Months / 2020 / 4
Slide 5: Highlights of the period
Highlights of the period Adjusted Net Profit grows 8.8% and Reported Net Profit rises 4.7%, to EUR 2,681 M COVID-19: Progressive normalization of market conditions Record investments, up to EUR 6,638 M (+22.9%) 4,600 MW installed y-o-y and 7,600 MW under construction Expanding our geographical footp
Slide 6: Corporate transaction: Avangrid-PNM Resources combination
Corporate transaction Avangrid-PNM Resources combination: accelerating growth in US Iberdrola strategy Growing renewables and regulated activities Countries with high growths and good rating Earnings per share accretion Maintaining our financial strength Adding to previous operations: Infigen, Aalto
Slide 7: Corporate transaction
Corporate transaction Avangrid-PNM Resources combination: Electric utility in New Mexico and Texas Avangrid Pro forma 2019 figures (USD M) Iberdrola Pro forma 2019 figures (EUR M)1 EBITDA 2,453 EBITDA 10,601 Avangrid 1,867 Iberdrola 10,104 PNM 586 PNM 498 Net Income 846 Net Income 3,5262 Avangrid 67
Slide 8: Business recuperation
Business recuperation Progressive normalization of market conditions Monthly evolution electricity demand 2021 forward price evolution Feb Mar Apr May Jun Jul Aug Sept Oct 44.5 (MTD) 44.9 -2% -2% (€/MWh) 40.8 -9% Feb Mar Apr May Jun Jul Aug Sept Oct -18% (MTD) Feb Mar Apr May Jun Jul Aug Sept Oct (M
Slide 9: Gross Investments
Gross Investments Accelerating investments up EUR 6,638 M (+23%) despite COVID-19 restrictions 54% of total investments allocated to renewables 9M Gross Investments by business Gross Investments by quarter (Bn Eur) Generation & Corporate & other 1% Supply +1.9% 7% -21.1% 3.0 Renewables 6,638 38% 1.7
Slide 10: Installed Capacity
Installed Capacity More than 4,600 MW of new installed capacity in the last 12 months… …and 7,600 MW under construction of which around 1,000 MW offshore wind Capacity under construction (MW) Offshore wind 1,000 Onshore wind 2,200 Solar PV 2,700 Storage 1,250 (Hydro & Batteries) Others 500 Total 7,6
Slide 11: EBITDA
EBITDA Financial performance: adjusted EBITDA1 up +3.2% Networks Adjusted EBITDA by business • Negative impact of new regulatory period in Spain, as expected • Results in US affected by items reconcilable in US GAAP that will be registered in IFRS in future years Generation • Brazil: Higher contribu
Slide 12: Operational efficiency
Operational efficiency Net Operating Expenses improve by EUR 57 M… Net Operating Expenses (EUR M) -EUR 57 M 3.158 3.101 Q3 2019 Q3 2020 …even after considering EUR 43 M expenses1 related to COVID 1 Related mainly to donations of healthcare materials Results Presentation / Nine Months / 2020 / 12
Slide 13: Financial Strength
Financial Strength Cash flow up 2.3%, driving an improvement of financial ratios FFO / Adjusted Net Debt +20 bp 21.9% 21.7% Q3 2019 Q3 2020 Maintaining full access to capital markets Results Presentation / Nine Months / 2020 / 13
Slide 14: Recovery plans and increasing investments
Recovery plans and increasing investments A massive opportunity ahead in our current markets Emissions 140 Coronavirus recovery 55% reduction by 2030 Bn Eur fund by 2030 Offshore Offshore wind auctions VS 40% 40GW 4.9GW in NY & NJ wind by 2030 in 2020 & 2021 72 Billion by 2023 Share of vs 30 • 37% G
Slide 15: New growth platforms
New growth platforms Expanding our geographical footprint and creating new growth platforms Sweden: 9GW of offshore wind pipeline France: UK and Continental Europe: • Acquisition of 118 MW of onshore wind and 636 MW Increase of renewable pipeline renewable under development • 100% ownership of Saint
Slide 16: Other milestones
Other milestones Multiple regulatory measures under development • Electric vehicle program in NY • New York rate case on track • RIIO T2 process ongoing. • CMA draft decision rising • BRL ~1,664 M Off-balance (tariffs applied retroactively sheet COVID system loans from April) on water companies (Fin
Slide 17: Analysis of Results
Agenda Analysis of Results Results Presentation / Nine Months / 2020 / 17
Slide 18: COVID impact / Group
COVID impact / Group Two main direct COVID impacts considered, totalling EUR 308 M in 9M 2020, … DEMAND(1) BAD DEBT(2) EUR M Generation Generation Networks Networks &Supply &Supply SPAIN 8 28 - 13 UK 23 34 - 27 US 61(3) - 9 - MEXICO - 11 - - BRAZIL 30 2 31 - IEI - 19 - 12 TOTAL 122 94 40 52 … Demand
Slide 19: COVID impact / Group
COVID impact / Group Several measures underway in order to offset COVID impacts COVID Impact at Net Profit level by quarters Networks (EUR M) Expected recovery of impacts in UK and US, and under negotiation in Brazil 136 Generation & Supply Bad debt impacts managed through commercial activity
Slide 20: Income Statement / Group
Income Statement / Group Reported Net Profit grows 4.7%, to EUR 2,681.0 M. Adjusted Net Profit grows +8.8% EUR M 9M 2020 9M 2019 % 9M 2020 % Adjusted (Adjusted) Revenues 24,248.0 26,457.5 -8.4 Gross Margin 11,841.3 12,086.7 -2.0 Net Operating Expenses -3,100.9 -3,158.2 -1.8 Levies -1,395.2 -1,429.6
Slide 21: Results reconciliation
Results reconciliation Adjusted results exclude main non-recurring impacts in 9M’19 and 9M’20, but not fx impact (EUR -236 M at EBITDA level at 9M 2020) EBITDA Net Profit 7,561 -216 +485 -154 2,681 7,345 2,553 -203 +3.2% -2.0% +8.8% +4.7% 2020 COVID 2020 2020 COVID Siemens Tax 2020 Adjusted effect R
Slide 22: Gross Margin / Group
Gross Margin / Group Gross Margin falls 2.0%, to EUR 11,841.3 M, with a negative fx impact of EUR 343 M, … EUR M Revenues EUR M Procurements -8.4% -13.7% 26,457.5 24,248.0 14,370.8 12,406.7 9M 2019 9M 2020 9M 2019 9M 2020 … and grows 0.8% excluding fx impact Results Presentation / Nine Months / 2020
Slide 23: Net Operating Expenses / Group
Net Operating Expenses / Group Net Operating Expenses improve 1.8%, to EUR 3,100.9 M, driven by cost containment, due to COVID and efficiency plans EUR M Net Operating Expenses 9M 2020 9M 2019 vs 9M’19 (%) Net Personnel Expenses -1,595.7 -1,598.1 -0.2% Net External Services -1,505.2 -1,560.1 -3.5% T
Slide 24: Levies / Group
Levies / Group Levies fall 2.4%, to EUR 1,395.2 M, … EUR M +36 -1 -1,430 -1,395 Spanish taxes on 9M 2019 generation Other 9M 2020 … due mainly to lower prices in Spain Results Presentation / Nine Months / 2020 / 24
Slide 25: Results by Business / Networks
Results by Business / Networks Networks EBITDA falls 10.7%, to EUR 3,519.7 M EBITDA by Geography (%) Key Figures (EUR M) Brazil 21% 9M 2020 9M 2019 vs 9M’19 (%) 34% Spain Gross Margin 5,625.1 6,080.5 -7.5% 3,519.7 Net Op. Exp. -1,559.3 -1,606.9 -3.0% Levies -546.1 -531.7 +2.7% United 24% States 21%
Slide 26: Results by Business / Networks
Results by Business / Networks Spain EBITDA EUR 1,202.9 M (EUR -93.0 M; -7.2%), due to the lower remuneration established for 2020 in the regulatory framework (EUR -44 M), the impact of transferring the fibre optic contracts in Q3´19 (EUR-49 M) and positive settlements accounted for in 9M 2019 (EUR
Slide 27: Results by Business / Renewables
Results by Business / Renewables Renewables EBITDA up 5.6%, to EUR 1,771.5 M, driven by the US and the UK EBITDA by Geography (%) Key Figures (EUR M) IEI* 13% 9M 2020 9M 2019 vs 9M’19 (%) Mexico 3% Spain 26% Gross Margin 2,660.0 2,519.0 +5.6% Brazil 4% 1,771.5 Net Op. Exp. -599.7 -569.8 +5.3% Levies
Slide 28: Results by Business / Renewables
Results by Business / Renewables UK EBITDA GBP 442.8 M (GBP +141.3 M; +46.8%), due to higher production both in onshore (+4.3%) and offshore (+258.2%), as a consequence of the contribution from East Anglia 1, 714 MW fully in operation since April 2020. US EBITDA USD 510.9 M (USD +42.4 M; +9.0%), dri
Slide 29: Results by Business / Generation and Supply
Results by Business / Generation and Supply* Generation & Supply EBITDA up 10.3% to EUR 2,004.4 M,… EBITDA by by Geography Geography(%) (%) Key Figures (EUR M) Brazil 2% 9M 2020 9M 2019 vs 9M’19 (%) Gross Margin 3,571.7 3,482.3 +2.6% Mexico 29% 61% Net Op. Exp. -973.2 -1,036.8 -6.1% 2,004.4 Spain Le
Slide 30: Results by Business / Generation and Supply
Results by Business / Generation and Supply Spain* EBITDA EUR 1,230.1 M (EUR +55.2 M; +4.7%) • Lower output 25,356 GWh (-11.3%), higher purchases at lower prices vs 9M 2019 • Active management of customer portfolio: Energy + Smart Solutions • LNG contracts sale (EUR 89 M) in Q2 2019 Mexico EBITDA US
Slide 31: EBIT / Group
EBIT / Group Group EBIT falls 11.2%, to EUR 3,987.9 M, with Depreciation growing 8.7% due to higher asset base D&A and Provisions (EUR M) 9M 2020 9M 2019 vs 9M’19 (%) D&A -2,987.5 -2,748.6 +8.7% Provisions -369.8 -261.5 +41.7% TOTAL -3,357.3 -3,010.1 +11.5% Provisions up +41.7%, including EUR 92 M o
Slide 32: Net Financial Expenses / Group
Net Financial Expenses / Group Net Financial Expenses improve by EUR 250 M to EUR 640.8 M, due to one-off fx hedges and lower cost, … Net Financial Exp. evolution (EUR M) Cost of Debt -890.6 +117.9 - 48.8 + 180.8 -640.8 3.57%* -42 bps 3.15% Fx and Sept 2019 Cost Avg. debt other Sept 2020 Sept 2019 S
Slide 33: Adjusted Net Debt / Group
Adjusted Net Debt / Group Strong credit metrics Adjusted Net Debt* (EUR M) Adjusted credit metrics Sept 2020*** Sept 2019** 37,883 Adjusted Net Debt* / EBITDA 3.8x 3.6x 1,030* 36,518 FFO / Adjusted Net Debt* 21.9% 21.7% RCF / Adjusted Net Debt* 19.9% 20.2% Adjusted Leverage* 45.5% 43.9% Sept 2019**
Slide 34: Liquidity and debt diversification / Group
Liquidity and debt diversification / Group Liquidity totals EUR 13,8 bn, covering 30 months of financing needs Bank loans Liquidity: EUR 13,814 M 12.2% Cash Leases 2,067 4.6% EUR bonds 31.6% Structured 1.1% Available Multilateral Loans 11.3% Backup 2,141 Lines 7,300 Commercial paper 8.4% Credit Line
Slide 35: Net Profit / Group
Net Profit / Group Reported Net Profit up 4.7%, to EUR 2,681.0 M, and Adjusted Net Profit +8.8% … EUR M 9M 2020 9M 2019 vs 9M’19 (%) EBIT 3,987.9 4,488.9 -11.2% - Net Financial Expenses -640.8 -890.4 -28.0% - Equity Method -19.3 -21.1 -8.8% - Non Recurring Results +514.7 +122.4 n/a - Corporate Tax -
Slide 36: Conclusions
Agenda Conclusions Results Presentation / Nine Months / 2020 / 36
Slide 37: Conclusions: nine months results
Conclusions: nine months results Reported Net Profit of EUR 2,681 M, up 4.7% and Adjusted Net Profit grows 8.8% Gross investments reach EUR 6,638 M (+23%) 4,600 new MW in the last 12 months with 7,600 MW under construction Maintaining financial strength (13.8 Bn of liquidity) …despite COVID impacts
Slide 38: Conclusions: 2020 Outlook
Conclusions: 2020 Outlook Improved results in second half of the year after softening of COVID-19 measures Net Profit by quarters Investment acceleration (EUR M) 1.257 New capacity 964 917 905 836 New Rate cases 680 588 Cost savings Q1 Q2 Q3 Q4 2019 2020 Lower COVID-19 impact Net Profit to accelerat
Slide 39: Conclusions: 2020 Outlook
Conclusions: 2020 Outlook Strong underlying business performance thanks to our diversified model … maintaining Net Profit guidance at mid / high single-digit growth… …and maintaining shareholder remuneration policy: interim shareholder remuneration of EUR 0.168 per share Results Presentation / Nine
Slide 40: Annex: Iberdrola Retribución Flexible program January 2021
Agenda Annex: “Iberdrola Retribución Flexible” program January 2021 Results Presentation / Nine Months / 2020 / 40
Slide 41: Iberdrola Retribución Flexible program: January 2021
“Iberdrola Retribución Flexible” program: January 2021 - Last day to buy IBE Closing prices shares and participate in considered for scrip and/or receive the determining the dividend in cash Last day of rights - Delivery of shares average price used to - Announcement of capital trading period and -