Business
Acciona S A : 9m trading statement 2024
Acciona S A : 9m trading statement
About this update from Acciona Sa
LEGAL DISCLAIMER This Trading Statement has been prepared by ACCIONA, S.A. ("ACCIONA", the "Company" or the "Group" or, together with its subsidiaries, the "ACCIONA Group") for the sole purpose of providing the market with an update of the main trends and high-level operational data for the nine-month period from January to September 2024. Accordingly, it may not be disclosed or made public by any person or entity for any other purpose without the prior written consent of the Company. ACCIONA will not be liable for the contents of this document if used for any purpose other than that outlined above. The information, opinions and statements contained herein do not purport to be comprehensive and have not been verified or audited by independent third parties. In some cases they are based on management information and estimates and are subject to change and, therefore, ACCIONA offers no express or implied warranty as to the impartiality, accuracy, completeness or correctness of the information provided or the opinions expressed and statements made herein. Certain financial and statistical information contained in this document may be subject to rounding adjustments. Neither the Company and its subsidiaries, nor any entity controlled by the ACCIONA Group and its subsidiaries, nor any of its advisors or representatives will be liable in any way for any loss or damages arising from any use of this document or its contents, whether due to negligence or for any other reason. The information contained in this document on the prices at which securities issued by the ACCIONA Group have been bought or sold, and the performance of those securities, may not and should not be used to predict the future performance of securities issued by the ACCIONA Group. Neither this document nor any part of the same constitutes or may in any way be relied upon as legal, tax, investment, accounting, regulatory or any other type of advice regarding, about or in relation to the Company, nor may it be used or relied upon in connection with or as the basis for any contract, agreement or investment decision, or included or incorporated into such. I MPORTANT INFORMATION This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the Spanish Securities Market Act (Law 6/2023 of 17 March on the securities markets and investment services) and related secondary legislation. Likewise, this document does not constitute an offer of any kind for the purchase, sale or exchange of securities, a request for any offer to purchase, sell or exchange securities, or a solicitation for any vote or approval in any jurisdiction. In particular, this document does not constitute an offer to purchase, sell or exchange securities or a solicitation of any offer to purchase, sell or exchange securities. This document and the information contained herein do not constitute a solicitation of an offer to buy securities or an offer to sell securities in the United States (within the meaning of Regulation S of the US Securities Act). The ordinary shares of ACCIONA have not been, and will not be, registered under the US Securities Act and may not be offered or sold in the United States absent registration under the Securities Act, except pursuant to an exemption from, or in the case of a transaction not subject to, the registration requirements of the Securities Act and in compliance with the relevant state securities laws. There will be no public offering of ordinary shares in the United States. F ORWARD-LOOKING STATEMENTS This document contains forward-looking information and statements about ACCIONA, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "pipeline" and similar expressions. Although ACCIONA understands that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ACCIONA shares are cautioned that forward-looking information and statements are subject to certain risks and uncertainties, many of which are difficult to predict and are generally beyond ACCIONA's control, which could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed in the documents filed by ACCIONA with the Comisión Nacional del Mercado de Valores, which are publicly available for consultation. Forward-looking statements are not guarantees of future performance. They have not been reviewed by ACCIONA's auditors. You are cautioned not to place undue reliance on the forward-looking statements, which contain information only up to the date on which they were made. All subsequent oral or written forward-looking statements attributable to ACCIONA, the ACCIONA Group or any of their respective members, directors, officers, employees or any persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statement. All forward- looking statements included herein are based on information held by ACCIONA at the date of this document. Except as required by applicable law, ACCIONA does not undertake publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document contains certain non-IFRS financial measures of the Company derived from (or based on) its accounting records, which it regards as alternative performance measures (APMs) for the purposes of Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 and as defined in the European Securities and Market Authority Guidelines on Alternative Performance Measures dated 5 October 2015. Other companies may calculate such financial information differently or may use such measures for different purposes than the Company, limiting the usefulness of such measures as comparative measures. These measures should not be treated as an alternative to measures calculated in accordance with IFRS, have limited use as analytical tools, should not be considered in isolation and may not be indicative of the Company's results of operations. Users of this document should not place undue reliance on this information. The financial information included herein has not been reviewed for accuracy or completeness and, as such, should not be relied upon. The definition and classification of the pipeline of the ACCIONA Group's Energy division, headed by Corporación Acciona Energías Renovables, S.A. ("ACCIONA Energía" or the "Company"), which comprises both secured and under- construction projects, highly visible projects and advanced development projects, as well as other additional opportunities, may not necessarily be the same as that used by other companies engaged in similar businesses. Accordingly, the expected capacity of ACCIONA Energía's pipeline may not be comparable with the expected capacity of the pipeline reported by other companies. Given its dynamic nature, moreover, ACCIONA Energía's pipeline is subject to change without notice and certain projects classified under a given pipeline category as identified above could be reclassified to another pipeline category or could cease to be pursued in the event that unexpected events, which may be beyond ACCIONA Energía's control, should occur. E X E C U T I V E S U M M A R Y ACCIONA's operational trends in the third quarter have been similar to those of the first half of the year. The Infrastructure businesses are performing strongly and the award of the company's first Managed Lane concession in the United States is a key highlight. Nordex has delivered an exponential improvement in its profitability, and has confirmed its full-year targets. ACCIONA Energía is maintaining a strong pace of new capacity additions, and consolidating the recovery of prices in Spain, while advancing its asset rotation plan. The key highlights of the period were as follows: In Energy , ACCIONA Energía has installed 483 MW in the third quarter, resulting in a cumulative 925 MW added in the first nine months of the year, progressing towards its goal of installing 1.7 GW for the whole year (close to 2 GW including the opportunistic acquisition of some operating assets). The average generation price achieved in Q3 was higher than in the first half of the year, while progress with asset rotation processes was in line with expectations. The sale of 175 MW of Spanish hydro was completed on 12 November, generating total proceeds of €293 million for the Company. The total capital gain expected is €180 million, €76 million of which were recognised in the first half results via reversal of impairment (below EBITDA), and a further €104 million will be recognised in EBITDA in the fourth quarter. ACCIONA Energía continues to work on potential asset rotation transactions for the period 2024-25, covering a perimeter of approximately 6 GW, with several significant potential transactions making good progress. The optimal volume of disposals to be completed will be determined by the preservation of the investment grade credit ratings, while the priority criteria will continue to be the price achieved and potential value creation, as well as strategic and operational fit. The Group's Infrastructure backlog reached another record, rising to a historic high of €27,207 million at 30 September 2024, 11.0% higher than at 31 December 2023. Including equity-accounted contracts, the aggregate Infrastructure backlog reached €40,952 million vs. €34,050 million at 31 December 2023, an increase of 20.3%. Major awards include the I-10 highway in Louisiana, USA, and the first lot of tunnels in the Melbourne Suburban Rail Loop East project. During this quarter, ACCIONA has further accelerated growth in the concessions business: equity investments in concession projects totalled €676 million at 30 September. In August, a consortium including ACCIONA was selected preferred bidder for the contract to build and operate the SR400 Express Lane in Atlanta, Georgia (USA) under a 50-year concession. The construction value of the project is ~USD 4,700 million with a total investment of approximately USD 10,900 million. The contract, which will be the third concession awarded to ACCIONA in the United States, represents a significant milestone for the group, becoming the largest concession project in our portfolio and representing the consolidation of our position as one of the largest players in the US managed lanes sector. With regards to Nordex, the company recorded order intake of 5,083 MW in the first nine months of the year, up from 4,892 MW in the same period of 2023. It has generated total revenues of €5,105 million, on which it obtained an EBITDA margin of 3.7%, having consolidated the gains in operational efficiency and profitability achieved in recent quarters. Nordex has reiterated its 2024 guidance, expecting now full-year EBITDA margin to be closer to the top end of the margin guidance range, which was 3.0 - 4.0% of sales. At the same time, the company has also reiterated its mid-term target of 8% EBITDA margin. In Other Activities , Bestinver continued to increase its assets under management, driven by profitability and net inflows, now totalling €6,688 million, held in both conventional and 3 alternative funds. Meanwhile, housing deliveries by ACCIONA Inmobiliaria were, as usual, affected by the seasonality of the business, with most of the planned deliveries of the year scheduled for the fourth quarter. ACCIONA's overall net Investment cash flow in the first nine months of 2024 amounted to approximately €2,200 million, of which: ~€1,100 million were invested in Energy, mainly in the MacIntyre wind project in Australia (net of the partial monetisation of the investment) and solar farms and battery energy storage systems in the United States. ~€830 million were invested in Infrastructure, highlighting the acquisition and completion of the Kwinana Waste-to-Energy plant, in Australia, for an overall investment of ~€500 million, and the equity contributions into other concession projects, mainly in the Line 6 of the Sao Paulo Metro. Nordex has invested €112 million, in line with its normal capex. ~€70 million were invested in Other Activities. ~€140 million were invested in Real Estate inventories. In terms of the outlook for 2024 , ACCIONA maintains its expectation of ~€2 billion in EBITDA - excluding capital gains from asset rotation - for the entire year, with approximately €1 billion coming from ACCIONA Energía and ~€1 billion from the rest of the group. The Company has secured an estimated €183 million of capital gains to date, of which €180 million arise from the sale of 175 MW of hydro assets recently completed. Of this amount, €107 million will be recognised at the EBITDA level and €76 million were already accounted in the first half results as reversal of prior impairments (accounted below EBITDA). Regarding total investment, the company estimates a net investment cash flow of around €2,500 million, with lower than initially expected net investment in Energy and higher in the rest of the group, which includes the investment in ACCIONA Energía shares via equity swaps. Regarding financial leverage, ACCIONA expects to close the year with a net debt/EBITDA ratio slightly above 3.5x. 4 O P E R A T I N G P E R F O R M A N C E Energy 30-Sep-24 30-Sep-23 Chg. (%) Total capacity (MW) 14,333 12,948 10.7% Consolidated capacity (MW) 12,757 11,556 10.4% Total production (GWh) 19,757 18,029 9.6% Consolidated production (GWh) 17,585 15,357 14.5% Average price (€/MWh) 66.0 87.6 -24.6% Infrastructures 30-Sep-24 31-Dec-23 Chg. (%) Infrastructure backlog (€m) 27,207 24,508 11.0% Aggregated infrastructure backlog (€m) 40,952 34,050 20.3% Project backlog (Construction & Water) (€m) 18,705 17,514 6.8% Water O&M backlog (€m) 4,783 4,478 6.8% Nordex 30-Sep-24 31-Dec-23 Chg. (%) Backlog (€m) 11,494 10,537 9.1% 30-Sep-24 30-Sep-23 Chg. (%) Order intake turbine (€m) 4,572 4,143 10.4% Order intake turbine (MW) 5,083 4,892 3.9% Average selling price - order intake (ASP) (€m/MW) 0.90 0.85 6.2% Other activities 30-Sep-24 31-Dec-23 Chg. (%) Stock of pre-sales (nº of housing units) 1,529 1,393 9.8% Property development- Gross Asset Value (GAV) (€m) 1,897 1,805 5.1% Bestinver - Assets Under Management (€m) 6,688 5,919 13.0% 30-Sep-24 31-Dec-23 Chg. (%) Average worforce 66,195 57,843 14.4% 5 B U S I N E S S L I N E S H I G H L I G H T S E N E R G Y General overview - ACCIONA Energía remains on track to meet its 2024 EBITDA target of ~€1 billion before capital gains. The Company maintains the high rate of new renewable capacity additions, expecting to add close to 2 GW (gross of divestments) in 2024 as a whole, combining the development of its own pipeline with the opportunistic acquisition of operating assets. In Spain, the recovery of power prices is strong and hydro output remains at high levels. Total average achieved prices for the year as a whole are now expected to be marginally higher than the levels provided with the Outlook at the first half results, which should, to a greater or lesser degree, help offset still relatively low generation output in certain International markets. Consolidated production grew by 14.5% in the first nine months of 2024, mainly thanks to the commissioning of new international assets, supported to a lesser extent by strong hydro production in Spain. Despite the ongoing normalisation of energy prices, the average price achieved was €66/MWh thanks to the Company's commercial policy and regulatory protection. The asset rotation plan is progressing as expected with the completion of the first disposal transaction. Several significant potential transactions are making good progress, reflecting strong demand for the Company's assets. Asset rotation activity - The sale of 175 MW of Spanish hydro was completed on 12 November, generating total proceeds of €293 million for the Company. The total capital gain expected is €180 million, €76 million of which were recognised in the first half results via reversal of impairment (below EBITDA), and a further €104 million will be recognised in EBITDA in the fourth quarter. Furthermore, in October the Company agreed the sale of its 49% stake in the 24 MW Mov- R wind farm in Hungary, a transaction that is expected to generate a capital gain of €3 million at the EBITDA level. ACCIONA Energía continues to work on potential asset rotation transactions for the period 2024-25 covering a perimeter of approximately 6 GW, although the optimal volume of disposals to be completed will be determined by the preservation of the investment grade credit ratings. The priority criteria will continue to be the price achieved and potential value creation, as well as strategic and operational fit. ACCIONA Energía remains strongly committed to the delivery of its value creation targets and the reduction of financial gearing over the period 2024-25. US acquisition of Green Pastures wind farms - In early November ACCIONA Energía announced the acquisition of the Green Pastures I and II wind farms in Texas for USD 203 million (enterprise value). The combined capacity of the wind farms is 300 MW with an expected annual output of around 1.1 TWh per year. The Green Pastures wind farms were commissioned in 2015 and will enlarge ACCIONA Energía's existing renewables portfolio in 6 North America, which already has 2.8 GW of installed capacity. This transaction will strengthen the Company's position in one of its key growth markets. The Green Pastures assets are highly complementary with ACCIONA Energía's existing wind portfolio, due to their location in ERCOT, also operating Nordex AWP 3000 turbines, and the potential for operational improvement under the Company's management, making the investment in operational assets unusually attractive in this case. ACCIONA Energía estimates that this acquisition will comfortably meet its target returns. The assets are currently merchant, but the Company may consider to lock-in hedging or PPAs once the assets are optimised and fully integrated into its platform. The acquisition price will be paid early next year. This investment falls within the capex commitments previously communicated for 2025, so it will not result in incremental capex over such levels. Installed capacity - Total capacity at 30 September 2024 reached 14,333 MW (12,757 MW in consolidated terms) following the addition of 925 MW in the first nine months of the year. MacIntyre and Aldoga (both in Australia) account for 365 MW and 131 MW, respectively, followed by 108 MW at Forty Mile wind farm in Canada and 87 MW upon completion of Red-Tailed Hawk (458 MW) PV plant in the United States, among other assets. ACCIONA Energía's target remains to install around 1.7 GW of new capacity in 2024 as a whole. New capacity installed since the beginning of the year as of the date of publication of this Trading Statement is 1.2 GW. Including the 300 MW added by the recently acquired Green Pastures wind farms in the USA, it is expected that capacity additions in 2024 (gross of divestments) will be close to 2 GW. Capacity under construction reached 1,270 MW by the end of September 2024, including the start of work at the site of Kalayaan wind farm in the Philippines. Capacity under construction is expected to stand at ~900 MW by year-end. Renewable production - Consolidated production reached 17,585 GWh, a year-on-year increase of 14.5% (+16.5% in Spain and +12.8% internationally), mainly explained by the commissioning of new assets. On a like-for-like basis (i.e. excluding new capacity and perimeter changes) production increased 2.8%. In Spain, like-for-like production recovered substantially to levels close to historical averages, with strong hydro output, which compensated for weaker wind production. However, like-for-like International production dropped sharply, in particular due to low wind resource in Mexico and the United States, where a recovery towards historical averages was expected. The MacIntyre (Australia) and Forty Mile (Canada) wind farms under construction, which have total capacity of 923 MW and 280 MW, respectively, are connecting their first turbines and beginning to produce power in this last quarter. Output at both assets will gradually rise to reach total capacity over the course of 2025. Average achieved price - The average price achieved by ACCIONA Energía's generation business dropped to €66.0/MWh compared to an average €87.6/MWh in the same period of the prior year, driven primarily by the normalisation of wholesale prices in Spain. The average achieved price in the Spanish generation business in the first nine months of 2024 was €72.5/MWh, significantly above the wholesale price of €52.4/MWh, thanks to hedging and the regulated nature of part of the Company's asset portfolio. 7 The average price in the International business fell by 9.6% compared to the first nine months of 2023 to €60.3/MWh with lower prices in the USA, Canada and the rest of the Americas. Whilst in Chile, there has been a strong recovery in unit revenues, partly due to the recognition of higher income from PEC tariff protection mechanism from previous periods resulting from the update of electricity tariffs, which also improves current revenues. Hedging in Spain - The total generation volume contracted for 2024 as a whole stands at 7,0 TWh, at an average price of €78/MWh. This average reflects prices of around €93/MWh (~3.7 TWh) for volume contracted under short-term financial derivatives and ~€61/MWh (~3.3 TWh) under medium and long-term PPAs. Around 2.4 TWh of the Company's production is also covered by effective regulatory protection, raising the overall contracted/protected volumes to approximately 80% of expected output for 2024. Aside from the regulated volumes, the generation output contracted in 2025 stands at ~5.6 TWh at an average price of around €63/MWh, of which ~1.6 TWh is covered by short-term financial hedges and ~4.0 TWh by PPAs. Further contracting of the company's operating assets in Spain in the coming years - whether through financial hedges or PPAs - will be conditional on potential divestment transactions. The aim continues to be to hedge around 80% of production and avoid over- hedging in months of low renewable output. Investment and balance sheet management - Cumulative investment (net ordinary capex) in the first nine months totalled ~€1,100 million, net of the partial monetisation of MacIntyre. In addition, ACCIONA Energía invested €56 million in the share buy-back programme, which was completed in Q1. The Company monetised tax incentives in the US market for a total of €133 million in the period, thereby reducing the effective investment, and it expects to receive additional rebates totalling around €110 million before year-end. Excluding proceeds from asset rotations, the Company expects net ordinary capex for 2024 to be less than initially indicated, given that part of the planned investments will now be carried forward to 2025. Therefore, the current scenario is to maintain a similar level of annual investment (around €1,500 million) in 2024 and 2025, which reflects some moderation in capacity installation in 2025 consistent with the Company's deleveraging commitments and the normal fluctuations in the timing of development projects. The Company is currently working on corporate and non-recourse debt financings to fund capex related to projects in Australia, India, South Africa and the Dominican Republic, as well as Southeast Asia. The Company has established an Australian Medium Term Note programme in order to consider potential opportunities to fund its local capex needs in the Australian public bond market in the future, complementing the AUD-denominated bank financing that supports the development of ACCIONA Energía's solid Australian project pipeline. Development and new growth - ACCIONA Energía continues to advance with its project portfolio in the Philippines. In addition to the start of construction of the Kalayaan wind farm (101 MW), the Philippine Board of Investments has declared ACCIONA Energía's 196 MW Daanbantayan PV project a "Green Lane" development, speeding up and simplifying the award of permits by government agencies. The Company has started the construction of the 83 MW Pedro Corto PV plant in the Dominican Republic. This project is expected to start supplying energy under a feed-in tariff regime by the end of 2025. ACCIONA Energía was also awarded in Q3 a 12-year contract for 8 differences for a new PV plant in Croatia. The 189 MW Promina facility will be the country's largest when it is commissioned in 2027. In Italy, progress is being made in the development of its project pipeline with the award of the autorizzazione unica for a 52 MW PV plant, which is scheduled to be installed in 2026. The Company expects to obtain the regional permit (PAUR) before the end of year. ACCIONA Energía is making progress with the arrangement of PPAs and financing for the Zen and Bergriver (194 MW) wind farms and is participating in the ongoing renewables procurement round REIPPPP 7 with ~0.7 GW of wind assets. The new 26 MW hybrid PV facility at the Peralejo wind farm in Spain was commissioned in the month of October, completing the Company's second wind-solar hybrid renewable generation facility. In the battery energy storage area, ACCIONA Energía makes progress with respect to the development of its US battery storage portfolio, with focus on two projects with 400 MW/800 MWh capacity. In Spain, work has begun to install two utility-scale containers for second life batteries (SLBs) from electric vehicles at the Extremadura III PV plant. Outlook for 2024 - The Company maintains its expectation of ~€1bn EBITDA before capital gains for 2024. Consolidated output is expected to reach levels of around 24.5 TWh and the average achieved price to be approximately €70/MWh. The Company has secured an estimated €183 million of capital gains to date, of which €180 million arise from the sale of 175 MW of hydro assets recently completed. Of this amount, €107 million will be recognised at the EBITDA level and €76 million were already accounted in the first half results as reversal of prior impairments (accounted below EBITDA). The Company expects total investment of €1,400-1,500 million in FY 2024, including the investment in the share buy-back programme (already completed), and net of the monetisation of both the MacIntyre stake and US tax incentives. This investment amount does not include cash proceeds from divestments. O P E R A T I N G P E R F O R M A N C E Total installed capacity reached 14.3 GW at 30 September 2024 vs. 12.9 GW at the end of Q3 2023. Consolidated capacity increased from 11.6 GW to 12.8 GW over the last 12 months. Over the last nine months 925 MW of total capacity has been added, comprising 496 MW of new capacity installed in Australia (MacIntyre and Aldoga), 108 MW in Canada (Forty Mile), 87 MW in the United States (completion of Red-Tailed Hawk) and 86 MW at the Ayora PV plant in 9