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

ENERGIA LIMPIA XXI. Iberdrola launches a historic investment plan worth €75 billion euros for the period 2020-2025, with the aim of anticipating and taking advantage of the opportunities created by the energy revolution facing the world’s major economies. 90% of this investment volume – €68 billion – will be organic and will be aimed at consolidating its business model, based on more renewable energy, more networks, more storage and more intelligent solutions for its customers.

The group expects to obtain a gross operating profit (EBITDA) of €15 billion by 2025, which means an increase of €5 billion from 2019, with average annual growth of 7%. Net profit would amount to €5 billion, after growing annually by between 6% and 7% during the period.The presentation of the outlook to 2025 has been used to review upwards the group’s outlook for 2022, despite the COVID-19 context. Thus, net profit in 2022 will be in the range of €4 billion to €4.2 billion, compared to the €3.7- €3.9 billion initially foreseen. Gross investment will rise by 35% to €50 billion, compared to the €38-billion forecast, and efficiencies will rise to around €1.6 billion, exceeding the €1.2 billion forecast and maintaining the rating at BBB+/ Baa1 levels.

VALUE CREATION, AN OPPORTUNITY FOR INDUSTRY AND EMPLOYMENT

Iberdrola’s investment programme for the next six years, the largest by a Spanish company, will contribute to boosting the industrial fabric and job creation in the countries where the group operates.During the presentation of the plan for 2020-2025, Ignacio Galán, the Chairman of Iberdrola, explained that “after 20 years of anticipating the energy transition, our business model positions us as a key agent in the transformation of the industrial fabric. With our experience, our engagement with society and our financial strength we are advancing a model for long-term sustainable economic growth capable of meeting the current challenges of society.”

Iberdrola will maintain the social market economy and the United Nations’ Agenda 2030 as the cornerstones of its activity. Investments and procurement of goods and services from its more than 22,000 suppliers will contribute to sustaining up to 500,000 jobs worldwide by 2025.

Also, nearly 20,000 new recruits will join the group during the period (more than 10,000 recruits and 30,000 jobs created by 2022).The company, which in 2019 alone contributed €8.2 billion in taxes to the countries where it operates, expects its fiscal effort to rise to €12 billion in 2025, with the annual average for the period [2020-2025] being €10.3 billion, a direct consequence of the greater activity required to deliver the plan.In a scenario of investment growth, shareholder remuneration will increase in line with results. The company has set up a growing floor of between €0.40 – €0.44 per share between now and 2025. The group will continue to implement its “Iberdrola Flexible Compensation” scheme with its corresponding buyback programmes, which avoid dilution of shareholders. The company maintains its dividend policy and the pay-out stays between 65% and 75%.

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