BUSINESS EVOLUTION

NINE MONTHS 2017 RESULTS PRESENTATION

The good performance of the main company businesses reaffirms its growth outlook

 Infographic for Nine months 2017 Results [PDF]

The first Nine months of 2017 have been marked by the reduced contribution from hydroelectrics in Spain, which contrasts with the maximum record attained in the previous year, partially offset by the good performance of the international businesses of Networks and Renewables.

The EBITDA of the Group reached €5,440 million euros, propelled by the performance of the Networks business, mainly in the United States and Brazil (positively affected by the incorporation of Neoenergia) and the Generation Contracted in Mexico. Out of the total amount, 80% stems from regulated businesses or long-term contracts.

The increase in investments to close to 4,000 million euros (+31.5%) enabling the commissioning of 7.4 GW from now up until 2020, of which 3 GW will already be in operation in 2018.

The good performance of the main company businesses, as well as its commitment to investing in those business areas more resilient to interim factors, will enable to maintain the growth outlook for 2017.

NETWORKS

  • The Networks area has increased its EBITDA by 5.4%, reaching €3,092.1M, driven by the good performance of operations in the United States and Brazil, which represent over 40% of the business.
  • The EBITDA of the Networks business represents 57% of the total EBITDA of the Company.
  • The growth forecasts of the Networks area during the rest of 2017 are based on the review of rates in the United States and in the subsidiaries of the Brazilian company Neoenergia, in which Iberdrola holds a 39% stake: Coelba, Cosern and Celpe.

GENERATION

  • The Generation and Customers business recorded an EBITDA of €1,241M. The performance has been very positive in Mexico, which has increased its EBITDA by 27%, reaching $445.3M.
  • The EBITDA of the Deregulated Generation and Retail area reached 15% of the total EBITDA of the Company, while the EBITDA of the Contracted Generation area reached 7%.
  • Production, as compared to 2016, and the results of the retail business in the United Kingdom are expected to return to normal levels over the next quarters.

RENEWABLES

  • The EBITDA of the Renewables area was €1,142.8M, highlighting the salient performance of the business in the United Kingdom (+34.7%). In addition, the corporate restructuring in Brazil and the appreciation of the Brazilian real have increased the EBITDA of the business in Latin America by 3%, reaching €56.8M.
  • The EBITDA of this area represents 21% of the total EBITDA of the Company.
  • As regards the remainder of 2017, almost 1,400 new MW will be installed and wind conditions are expected to return to normal levels.

As of 2011, the operating and economic and financial information of Iberdrola Group is structured following business lines: Networks, Wholesale and Retail and Renewables. On the other hand, Corporate encompasses the costs of the Group structure (Single Corporation) for the administrative services of the corporate areas that are later billed to the other companies, whether through specific service contracts or a management fee.