annual general shareholders meeting 2012
TRANSCRIPT
Ignacio S. GalánChairman & CEO
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2011 in reviewDespite the complex environment, once again
Iberdrola has maintained its
Earnings
Dividends
Financial strength
Today we are the IBEX industrial company with better rating
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Since the start of the crisis, four years ago, Iberdrola is:
The only major European utility that has maintained its earnings and dividend
One of only two large cap IBEX stocks that have maintained their earnings and dividends
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2011 operating environment: Spain
GDP
ElectricityDemand
+0.7%(-0.3% 4Q)
-2.1%
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2011 operating environment: Spain
High public deficits
Spanish economic imbalances:
Undermining of certain banking groups
Private sector debt burden
Highest unemployment rate in the EU
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2011 operating environment: Spain
Spanish economic strengths
World class companies in key sectors
International presence: Europe and Latam
Positive contribution from exports
Public debt below European average
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2011 operating environment: Spain
More competitive, open and liberalised
Opportunity to transform the economic model...
More oriented towards innovation and foreign markets
Investing more in productive economy and less in speculative activities
More sustainable
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2011 operating environment: Spain
Enhanced productivity… implementing reforms that enable:
Modernisation of labour and tax law
Greater social cohesion
Deleveraging by government, corporates and households
More efficient public spending
Enhanced productivity
Fostering a reindustrialisation process
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Regulatory stability
Resolution of the tariff deficit
2011 operating environment: Spain
The energy sector needs:
Almost 50% of the tariff corresponds to costs that are not related with power supply
The government needs to address the factors that generated the deficit
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2011 operating environment: UK
GDP
ElectricityDemand
+0.7%(-0.2% 4Q)
-4%
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Stability in the networks business
Distribution: current tariff framework stable until 2015
Transmission: current tariff framework stable until 2021
2011 operating environment: UK
Significant progress on the regulatory front
Subsea power linkScotland-England (420 km)
Line
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Ongoing progress on Electricity Market Reform (EMR)
Substitution of existing generation assets
Delivery of environmental targets
Security of supply
2011 operating environment: UK
Significant progress on the regulatory front
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GDP
ElectricityDemand
+1.7%
-0.8%
2011 operating environment: US
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2011 operating environment: US
Renewables business affected by:
Continuity in the networks business
Current tariff frameworks in New York and Maine stable until 2014
Regulation:
Low power prices due to emergence of new energy sources (shale gas)
Elimination of economic incentives to investment
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2011 operating environment:Mexico & Brazil
GDPMexico
+4%
GDPBrazil
+3.4%
Brazil
+2.7%
ElectricityDemand
Mexico
+5%ElectricityDemand
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2011 operating environment: Brazil
Supply points (mn) 2.3
ElectricityDistribution areas
Workforce
Elektro TOTALNeoenergia
•Sao Paulo•Mato Grosso do Sul
3,900
9.4
5,100
11.7
5 states
9,000
Capacity in operation and under
construction (MW)
_ 4,200* 4,200
•Rio Grande do Norte•Bahia•Pernambuco
* Includes 145 MW of Iberdrola wind power capacity in Brazil** 39%-consolidated
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2011 in review: Investment
Eur 8,200 mn of investments
Corporate investments: Eur 4,200 mn
Networks
Merger with Iberdrola Renovables
Organic growth: Eur 4,000 mn
Elektro acquisition (Brazil)
Generation
Renewables
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2011 in review: Spain
San Esteban hydro plant
Development of smart grids in Castellón, Bilbao, Valencia…
Extension of La Muela II, San Esteban and San Pedro
power stations
La Muela II hydro plant
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2011 in review: UK
NetworksEur 6,000 mn investment
programme approved by the regulator
Wind farms •Enlargement of Whitelee •Start-up of offshore wind farm
in the Irish Sea
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2011 in review: USA
Maine transmission line
Installation of smart meters in Maine
New wind farms in Washington, Pennsylvania, Ohio, Iowa and California
Manzana wind farm
(California)Lewiston substation (Maine)
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2011 in review: Brazil and Mexico
BrazilHydroelectric plants
Dardanelos hydro plant:
Mexico
La Venta III wind farm
La Venta III wind farm
•Dardanelos in operation•Start of construction at Belo Monte
and Telespires10 wind farms
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2011 results
Iberdrola maintained its results thanks to:
Geographically diversified business model
Weight of the regulated and renewable businesses
Efficiency improvements
Maintaining financial strength
EBITDA by business
Renewables
Liberalised(Generation)
51%
Regulated(Networks)19%
30%
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2011 results
Total installed capacity of over 46,000 MW
Installed capacity, 2011
30%
21%7%
10%
29% 3%
Hydroelectric
Wind
Nuclear
Cogeneration
Gas
Coal
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2011 results
Group output exceeded 145,000 GWh
Output by country
44%
28%
16%
11%1%
United States
Spain
Latin America
United Kingdom
Output by technology
20%
12%
17%
39%
9% 3%
Hydroelectric
Wind
Nuclear
Cogeneration
Gas
Coal
Carbon emissions were cut by 20% vs. 2007 to reachhalf the average of European utilities
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2011 results
Energy distributed up 2.3% to 205,000 GWh …
200,329
204,887+2.3%
2010 2011
Energy distributed (GWh)
… with higher quality of service (best performance ever recorded in Spain)
Energy distributed by region/country
United States
United Kingdom
Spain
47%
17%
15%
20%Latin America
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2011 results
Revenue rose 4% to Eur 32,000 mn…
Revenue by region/country
11,645
12,025+3.3%
2010 2011
Gross Margin (Eur mn)
...while Gross Margin exceeded Eur 12,000 mn
United States
United Kingdom
Spain
48%
27%
10%
14%1%Latin America
Other
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2011 results
Record EBITDA...
7,5287,650+1.6%
2010 2011
EBITDA (Eur mn)
… despite an increase in other taxes (+22%)
29%
50%
19%2%
EBITDA by business
Renewables
Regulated
Deregulated
Other
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2011 results
Recurring Net Profit rose by 1.2%
2,582
2,614+1.2%
2010 2011
Recurring Net Profit (€ mn
Net profit was Eur 2,805 mn despite Eur 400 mn of non-recurring provisions and lower divestments (down Eur 226 mn)
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5,718
6,047+5.8%
2010 2011
Operating cash flow (Eur mn)
2011 resultsOperating cash flow over
Eur 6,000 mn (+5.8%) for the first time
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2011 results
Average debt maturity extended to 6.3 years
Eur mn
2,778
4,0513,532
13,874
2015 2017 and beyond**
4,369
20162013 2014
Maturity profileof Iberdrola's debt*
6.26.3
2010 2011
Average debt maturity
Liquidity reaches nearly Eur 10,000 mn and covers financing requirements for 30 months (average interest rate: 4.5%)
2012
* Excludes drawn down credit lines** Includes outstanding promissory notes
1,880
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2011 resultsProposed shareholder remuneration of at least
€0.331/ share…
€0.146/share
€0.03/share
Dividend distributed in January*:
Dividend to be distributed in July**:
€0.15/share
* Purchase price of the December Scrip Dividend programme ** Pending shareholder approval
€0.005/shareGSM attendance bonus:
… in line with the previous year
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Year 2011
Iberdrola, an engine for economic growth
Over Eur 8,200 mn in investments
Over Eur 5,300 mn in purchases
Tens of thousands of jobs created or maintained at suppliers
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5,800 additional employees in 2011
Average age under 43
Half of the workforce holds a university degree
Iberdrola creates jobs, with a team of 33,000 professionals
Increasing presence of women to reach 23% of our workforce
Year 2011
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Strong commitment to training…
1,500 internal promotions
Geographic mobility and career development opportunities
700 apprentices and trainees
… providing 1,200,000 training hours in 2011 (+22%)
Year 2011
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Fundación Iberdrola: supporting education, art, culture and biodiversity
Cristo de la Misericordia Hinojosa de Duero chapel (Salamanca)
Cristo de la Misericordia Hinojosa de Duero chapel (Salamanca)
Scholarship programme in universities of Spain,
the UK and US
Atlantic Romanesque Planin Castile and León
and Portugal
Capercaillie Protection schemes in Spain and
Scotland
Scholarship award ceremony 2011
Year 2011
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Environmental investments of Eur 1,300 mn
Emission of 40 million tonnes of CO2 avoided
More efficient waste management
Long-standing commitment to the environment
Iberdrola, continued presence in the Dow Jones Sustainability and FTSE4Good indices
Year 2011
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Iberdrola invested Eur 140 million in innovation
Through Perseo Iberdrola has allocated over Eur 23 mn to energy sector research
Marine energy and smart grids
EU Seventh Framework Programme
Year 2011
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Year 2011
Supporting paralympic sports
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Corporate governance
Iberdrola, at the forefront of best practices
Regulations of the Board of Directors
Corporate policies
By-Laws
Regulations for the General Shareholders' Meeting
Code of Ethics and creation of the Ethics Mail Boxes
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Iberdrola, a long-term industrial project creating wealth and jobs…
… and a company that is increasinglysustainable, responsible and committed
Ignacio S. GalánChairman & CEO