OUTLOOK 2020-2025

Iberdrola launches €75 billion investment plan to 2025 as a firm commitment to economic recovery

A total of 90 % of gross investment — 68 billion euros — will be organic. More than half (51 %) will be spent on renewable energies and 40 % on networks. Of this investment, 83 % has been earmarked for countries with climate ambitions and A ratings. These investments and efficiency (+1.5 billion euros) will drive the group's results to 2025 in EBITDA terms to 15 billion euros, while net benefit will stand at around 5 billion euros. The company's purchases, totalling more than 22,000 suppliers, will help to support up to 500,000 jobs in the world in 2025, as opposed to the current 400,000.

Outlook 2020-2025. Capital Markets Day 2020.

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OUTLOOK 2020-2025

Business Model and Strategic Pillars

Consolidating our successful business model

  • Power decarbonisation
    • Offshore Wind
    • Solar FV
    • Onshore Wind
    • Pumped
    • Battery Hydro Storage
  • Networks system integration
    • Automation
    • Smart Grids
    • HVDC
    • DSO Model
  • Demand electrification
    • Transport
    • Buildings
    • Industry
    • Heat Pumps
    • Electric Vehicles

- More Renewable Energy

- More Networks

- More Storage

- More energy solutions for our Costumers

Building on the strategic pillars that have triggered 2 decades of sustained growth...

- ESG+F

  1. Acceleration of Profitable Growth
  2. Sustainable Dividend
  3. Financial Strength
  • Geographical diversification: countries with high rating and ambitious climate policies
  • Energy transition: enabling decarbonisation and electrification
  • Efficiency: continuous drive for excellence
  • Portfolio optimization: contributing to the environmental and financial sustainability of our business model
  • Innovation: laying the foundations for the future

... to accelerate value creation for all stakeholders in the new scenario

2020-2025 Gross Investments: Eur 75 Bn

Eur 68 Bn of organic investments and Eur 7 Bn1 of PNM Resources transaction

  • Annual Organic Investments (Eur Bn)
    • Average 2017-2019: ~7
    • Average 2020e-2022e: ~10
    • Average 2023e-2025e: ~13

Growth represents 75 % of total organic investments (Eur 50 Bn)

1 Iberdrola estimates of PNM Resources transaction investment.

51 % of organic investments in renewables and ~85 % in Europe and the USA...

  • Gross Organic Investments by Business (Eur 68 Bn)
    • Liberalised: 9 %
    • Renewables: 51 %
    • Networks: 40 %
  • Gross Organic Investments by Geography (Eur 68 Bn)
    • Countries with credit rating greater than or equal to A2:
      • IEI Europe and Australia: 16 %
      • Spain: 21 %
      • UK: 16 %
      • USA: 34 %
    • Mexico: 2 %
    • Brazil: 11 %

...more than 83 % allocated to A-rated countries

2 Under Standard & Poor's categorization

2020-2025 Operating Figures:

Renewable Installed Capacity 2x (GW)

  • 2019: (7)/32
  • 2022e: (7)/44
  • 2025e: (11)/~60

(x) GW under construction by year end

With more than 20 GW of capacity in other generation technologies

2020-2025 Efficiency: ~EUR 1.5 Bn

Achieving efficiencies of close to ~EUR 1.5 Bn in 2000-2025, of which EUR 1 Bn in 2023-2025...

NOE / Gross Margin (-200 bps)

  • Average 2017-2019: ~27 %
  • Average 2020e-2022e: ~26 %
  • Average 2023e-2025e: ~25 %

...NOE / Gross Margin ratio constantly improving, to reach below 25 % by 2025

2025e EBITDA: ~ Eur 15 Bn

EBITDA grows ~Eur 5 Bn from 2019 (CAGR 6-7 %)...

EBITDA (Bn Eur) (CAGR 6-7 %)

  • 2019: 10.1
  • 2022e: >12
  • 2025e: ~15

...increasing the share of renewables and geographic diversification...

  • EBITDA 2025e by Business (~15 Eur Bn)
    • Liberalised: 22 %
    • Renewables: 31 %
    • Networks: 47 %
  • EBITDA 2025e by Currency (~15 Eur Bn)
    • Countries with credit rating greater than or equal to A3:
      • EUR: 40 %
      • AUD: 1 %
      • GBP: 17 %
      • USD: 30 %
    • BRL: 12 %

...with more than 80 % of EBITDA in A-rated countries

3 Under Standard & Poor's categorization.

2025e Net Profit: Eur ~5 Bn

Net Profit increase of ~Eur 1.5 Bn to reach Eur ~5 Bn in 2025 (6-7 % CAGR)...

Net Profit (Eur Bn) (CAGR 6-7 %) (~Eur 1.5 Bn)

  • 2019: 3.5004
  • 2022e: 4.000 - 4.200
  • 2025e: ~5

...maintaining financial strength and solid rating

4 Net Profit 2019 restated for the recognition of the financial cost of the hybrid bond.

2020-2025 Shareholder remuneration

In a strong growth scenario, shareholder remuneration will grow in line with results

  • Pay-out between 65 % and 75 % of EPS (our earning estimates would lead to a DPS in the range of approx. 0.53-0.56 in 2025)
  • Increasing DPS floor:
    • 2020-2022: 0.40 Eur/share
    • 2023-2025: 0.44 Eur/share (+10 %)
  • Maintaining optionality for shareholders with the "Iberdrola Retribución Flexible"
    program, including share buy-back

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Documentation Capital Markets Day 2020. Access.