Acciona Sa

the presentation of ACCIONA Energía first half 2023 results. I will make a brief introduction with the few points I would like to highlight and then pass on the floor to my colleagues, Rafael Mateo, CEO, and Arantxa Espeleta, CFO. I believe Acción Energía is now a better company than when we did the IPO two years ago. Higher value, larger scale, more profitable, better and more pipeline, and on the right track to prove our capacity to execute the 2 gigawatt a year of new capacity target. All in all, as I say, a better company than two years ago. Our investment activity is accelerating rapidly with 2.2 gigawatts under construction and one gigawatt of secured projects that will enter into construction in the next 12 months. So we are on track to deliver 1.8 gigawatts of installed capacity by the end of 2023. and very confident that we can at least install the same amount in 2024. From then on, we believe that we have the means, the pipeline, the balance sheet capacity, the supply chain, the manpower, and the know-how to continue installing north of two gigawatts a year in the foreseeable future. 2023 is the year when we prove our capacity to add new profitable megawatts at the pace announced at the APO, which I expect will ease the negative market sentiment that has been holding a share price back over the last six to nine months. Of course, there are other renewable sector-wide investor concerns. Inflation, interest rates, capex costs, supply change, deglobalization policies, or network congestion are undoubtedly challenges to be considered. In our case, we believe we have all those challenges sufficiently under control. Undoubtedly, we have experienced some delays in achieving our growth targets, but 2022 was a very unusual year with all the above-mentioned problems in their epitome. The war in Ukraine, total disruption in the global supply chain, anti-circumvention chaos in the US PV market, regulatory instability, the PGM connection collapse, markets getting acquainted with inflation, and interest rates hikes. an environment of unusually high energy prices that we also, as temporary, thus somewhat making us victims of our own success, as the levels of profitability would be very hard to match in future years. The ultimate change in the power price methodology for the current regulatory period in Spain has added to widen the delta relative to last year. But let me try to send a message of calm and predictability. In my view, the long-term outlook for the industry remains very bright. First, megatrends. The fight against climate change is more urgent than ever. There is an ever-growing number of countries committed to take measures. Social awareness is higher than ever. And we have the technologies available to transform the model. Also, energy independence has become a key strategic aim in many countries as the war in Ukraine has proved it necessary. All of this is leading to unprecedented policy support, privileged access to finance, economic incentives to develop the less mature technologies in the context of strong electrification of the global economy. We believe supply chain problems are pretty much over, and notwithstanding capital capex and financing cost, returns remain healthy as energy prices have settled significantly above pre-COVID levels. We are delivering profit above market price, and our initial expectations, market expectations, and our own initial expectations in the order of 600 million more EBITDA in the period 22-23, and enjoyed exceptional ROCE in the last two years. Return on capital employed. With respect to capacity additions and commercial activity, we will be adding three gigawatts of total capacity since the IPO by the end of this year, and that's two years ago, and signed around eight terawatt hours of PPAs in the last, in that same period. In terms of our 20 gigawatt target by 2025, the one that we announced at the IPO, we are approximately one year behind, but our projects are still here. with significant new additions to our pipeline, and we will deliver in 2023 more than three times what was on our business-as-usual annual growth in the IPO, before the IPO. We believe we will be able to maintain and increase a similar pace of growth in coming years while being very selective and disciplined in terms of risk, returns, and our balance sheet. We have invested 3 billion since the IPO, and our net debt has only increased by 1.1 cents. It is, I believe, too harsh from the market to attribute negative value to this. And in terms of paving the way for future growth, we have selectively opened new markets in Southeast Asia and Latin America and strengthen our presence in our core Australian, European, and North American markets, which, as you no doubt are aware, are poised for tremendous growth. We are also positioning ourselves in additional emerging technologies such as batteries, hydrogen, or floating. And of course, we are preserving our investment-grade credit rating and our balance sheet strength, which in the current volatile world, it is a very important competitive advantage. As for ESG, we have obtained ratings systematically at the top of the rankings, and I dare say we are a sector benchmark. We work to ensure long-term economic, social, and environmental sustainability, always sticking to our core values, while also strive to maximize our short-term delivery. At the second anniversary of the IPO of Acciona Energía, I reiterate, I firmly believe that the company has made great progress since that date, since the listing, and the general market is the general market environment is looking as good, if not better, than two years ago. As you see, I am optimistic despite a significant disconnect between the reality of the company and what seems to be the market perception judging by the stock price. I am confident the markets will soon recognize the progress made in the last couple of years and in the exciting future that lies ahead of us in Acción Energía and the rest of the group's sustainable infrastructure business. Thank you very much. Rafael, the floor is yours.

Thank you, José Manuel, and good morning to everyone. Let me please start with the key headlines for the period, defined as operating profit level but power prices coming off the peak of the energy crisis we saw last year. especially affected by the untimely changes in the spanish regulatory bonding mechanism for the regulated assets i like to mention that although the current price levels are more moderate they are still being a very good prices with around 100 euros per megawatt hour expected for both 2023 and 2024 so we still have a very good year 2023 and at least another one or two years of elevated power prices. The Spanish generation EBITDA in the last six months of 2023 is not very different from what we had for the entire year before the COVID. In 2023, we are seeing the benefit of the balance hedging and contracting we did last year, looking at very rich short-term prices for 2023, more than 160 euros per megawatt hour, and also securing significant long-term PPAs at very attractive prices backed by our existing Spanish generation fleet, both the short-term hedges and the long-term PPAs with much better prices than we expected in our IPO plans. The output remains below long-term average, especially because of the poor global resources, mainly in hydro. We increased our stake in Renomar, a Spanish wind company where we have owned historically 50% with our partners. The company owns 494 megawatts and its average production is 1.1 terawatt hour. This is not a big acquisition. It's basically normal because of our business, very natural things. for us to do as this asset that we developed in the past and we are operating since the start, now we are pleased to take the opportunity to increase our stake to 75% in this high quality portfolio of win assets as one of our partners decide to exit. We have paid just under 120 million euros for the 25% of the stake and Renomar had significant net cash position, implying that we are able to trade below 0.9 million euros per megawatt with a fantastic asset base. The transaction is generating a significant capital gain in the year that is helping to compensate at the bottom line the operating results. In the next few slides, I want to focus on our construction plan for the current year and also for the increase in visibility for 2024 and 2025. I will also provide you with our update financial expectation for the current year 2020. Starting with the construction plan 2023, as you know, our commitment is to install approximately 1.8 gigawatts of new capacity in the year, which is very concentrated in two geographies, North America and Australia, with ongoing U.S. solar projects such as Fort Bend, Union, High Point, Ritter Hawk, and our largest project under construction, the McIntyre Wind Farm in Queensland, Australia. We are broadly on schedule with a busy second half of the year, but on schedule. During the past six months, we completed the installation of 142 megawatts and our construction schedule is back-end loaded, planning 650 to 700 megawatts constructed in each of the next two quarters. Starting with McIntyre in Australia, we are currently in full turbine erection with 38 machines of 5.7 megawatts each completed as a few. And in the process of increasing our current installation rate of 10 to 12 new turbines per month. Yesterday, we had 47 turbines or 270 megawatts already erected. In the US, in contrast with the disruption in module PV supply that we had in 2022, aggravated in the past by the anti-circumvention issue, this year the things are going very much better. Although we had at the beginning of the year some potential delays with one of our Chinese suppliers, which was anticipating the problems with the U.S. border, today we have been able to resolve well early in March, procuring more from our new tier one manufacturer coming from India. Today, our module procurement plan for Red Tail Hawk in the U.S. market has even accelerated by a couple of months, which means that we are receiving all the modules for the project. And if everything goes according to the plan, we could potentially even increase the plant distillation at this site from the initial 150 megawatts in the year to 250 or 300 megawatts in this year, 2023. In Spain, we are expecting to get the construction permits and local license immediately to get working on the sites as soon as we can. In Peru, we are on track with our Marcona wind project. Looking at the big picture, we have a lot to do in the next six months, and there are obviously some challenges, but also some upside opportunities. and we are really very confident that we will be able to reach the target of 1.8 gigawatts new capacity installed at the end of the year. This is at the top of my list. We are extremely focused on completing the plan for the year and we have the capabilities to deliver and to maintain this new pace of growth going forward. Turning to the slide number eight, we have been very busy evaluating many projects in the last few months, approving more than one gigawatts of new capacity, as well as rejecting or postponing opportunities in some markets that today were not matching our expected return targets. Past February, at the full year result presentation, we were showing to you 1.2 gigawatts of identified capacity addition for 2024. basically comprising the tail end of McIntyre, the Red Tail Hawk, the first part of the Aldoga PV plant in Australia, a couple of wind projects in Australia, as well as a batch of new Spanish assets, which had, after a long wait, obtained environmental approval. As of today, the total fully secured capacity for 2024 stands at more than 1.7 gigawatts, with the addition of 40-mile wind farm in Canada, 280 megawatts in the phase one, another 160 megawatts of PV in Dominican Republic, with very high PPAs, more than $90 megawatt-hour PPA, and some additional Spanish projects. We have included also in the charts 413 megawatts PV project in India that we are securing the next weeks in which we'll add 125 megawatts extra in the 2024 construction schedule with the rest of the project delivered in 2025. We are also increasing fast the visibility, not just the visibility of 2024, we are increasing the visibility of 2025 and we have already a very good idea of what projects we are going to build in 2025. In the slide, we show you the expected regional split. We are not showing you the names of the projects as yet as some of the projects are in the internal process of getting the final investment decision. But they will be approved in the next few months and they will serve to fill the activity in the next years. That is including additional solar in the US in the PGE market, Potentially batteries and other battery storage in ERCOT in Texas and potentially some projects in the UK market. In India, I mentioned the large solar project we are securing that will contribute both 2024 and mostly 2025 in terms of capacity. South Africa, we are advancing with a view to contract and build three wind projects, totaling around 325 megawatts, and considering also a new battery project for the next tender in South Africa next month. In Australia, we will complete the final 185 megawatts of the 433 megawatts Aldoga project. So we have additional wood visibility of a couple of PV projects in Central America, adding more than 200 megawatts. And same in Croatia with our project solar PV Promina with 183 megawatts. And in Iberia, we have a significant pipeline of solar projects, mostly hybrid, and we are considering only the most efficient for now or the best contracted. With all these projects, we are secure, as I said before, not just 100% of our capacity for 2024, but most of our new capacity to be installed in 2025. So we think we have today very high visibility of at least 1.7, 1.8 gigawatts in 2024, and we can do, without any doubt today, another two gigawatts or more in 2025. With that, we will reach our IPO target of 20 gigawatts by the end of 2026, sometime in the early 2027 as the latest. We expect to reach and stay at the 1.8 gigawatt marks in 2023 and 2024, which is a well-balanced target for us. And then we will increase to a speed of around 2 gigawatts per year. We are living today in a world of plenty of opportunities for investment and higher proper prices, but also with more uncertainty for permitting, for read access, with higher and more volatile capex and higher interest rates. Even the module prices, the PV module prices, are falling strongly. Today, each project has to be analyzed in its own merit. Each project has to fight its own case. They are not blanket green light for any particular region in the world. We can say that achieving the right returns is easier in some geographical areas, Australia, the U.S., Spanish for wind, Spain for hybrid PV. But in other markets, we may have to develop and to be ready for the correct moment. This is the case of Brazil today. where we are waiting for the current moment or in some markets we are postponing projects we don't see today our required return. We can do that because we have a well-diversified pipeline and a well-diversified geographical presence in several markets and because we are not in the race to growth at any cost. We will grow in the future at unprecedented rates We have the origination and the execution capacity for a run rate of two gigawatts or more per year, and we want to capitalize on our increasing momentum. But we will grow at the right pace, at the speed that we can digest from a financial and a credit perspective point of view, and always protecting our highly profitable existing business. We are, for example, considering some sizable development opportunities in battery storage or in utility-scale floating offshore in the future that will significantly increase our capacity plans in the next few years. To accommodate the run rates of 2 gigawatts per year or more in our balance sheet, We will be open in the future when we need it or when our financial ratios demand it. That is not today. We will be open to alternatives such as minority partnership or as well as selective rotation and mature assets if it would be the case and the opportunity. In the next slide, number 10, and with respect to Outlook 2023, we have today half of the year behind us. the Renomar deal secure and the minimum for power prices stabilized around 100 MWh mark. In this context, our current EBITDA expectation for the full year is in the range of 1.2, 1.3 billion euros, based on the Spanish full prices of around 100 euros per MWh and consolidated output for the global fleet of around 22 TWh this year. taking into account the low hydro output for the rest of the year. In June, in the past month, the unexpected and extraordinary review in the Spanish regulatory price assumptions, the change of parameters for the current three-year period had a significant negative impact in our expectation. Nevertheless, it's just an accounting effect, not affecting cash, not affecting the value of the company, and we will recover in the future this positive accounting effect in 2026 in the year in the following years the renomar transaction is contributing both at the operating profit level and at the bottom line on top of the capital gain generated by the revolution of the company as it becomes today fully consolidated in our accounts all in all the this evita that we're projecting for 20 23 is still above the levels that we expected at the time of the IPO, despite the lower output in the year and less investment in 2022. This beta implies a significant growth relative to 2021 that was already a variable year if we look through the absolutely exceptional 2022. In terms of net investment cash flow, we expect to be close to the 2 billion. and the net debt to EBITDA ratio will be around 2.5 times. Finally, I want to share with you some decisions I have made with respect to the top tier of the organization. In the light of the rapid growth in size, in geographical footprint, in new, more renewable technologies and more activities related with the energy transition, I want, I need to reinforce the operational control of our global businesses. For that, I have created a new position, a new Chief Operating Officer position, designed to supervise all the global and operating activities of the company. That's a position that will be assumed by Arantxa Espeleta from next August the 1st. Cos Entre Canales will assume on the same date the role of the Chief Financial and Sustainability Officer on top of his responsibilities in strategy and corporate development. Congrats to both. Arantxa and Jose will work even more closely and more directly with me supporting myself in the most relevant operating and financial matters and decisions. Thank you very much and let me hand the floor to Arantxa to review the financial and operating performance during the first half of the year. Thank you.

Good morning. Thank you, Rafael. Let me quickly run through the key financial and operating figures. Revenues fell by 20% to 1,760 million euros as a result of lower prices in generation and supply activities. Generation revenues fell by 24%. ABTA is down to 686 million euros, falling by 25% in line with revenues. Generation ABTA in Spain is down while international improves. Earnings before tax are flat at 567 million euros, despite declining EBITDA and slightly higher depreciation charges, thanks to the Renomar revaluation financial charges that are not increasing significantly, and the partial reversal of the power concerts that we mark to market through the P&L, which last year contributed a significantly negative result, and this year is a positive contribution, thanks to lower market prices. Net investment cash flow of 1.5 billion euros is twice as high as in the previous year, evidencing the strong acceleration in our growth. Net debt increases by around 1.5 billion to 3.5 billion euros, reflecting the front-ended profile of our investment this year and the payment of the dividend. We expect net debt to be lower at year-end. WITH RESPECT TO THE KEY OPERATIONAL FIGURES IN THE SLIDE, LET ME MENTION THAT CONSOLIDATED CAPACITY STOOD AT 10.8 YIELDS, GROWING BY 1.5 YIELDS, OUT OF WHICH ALMOST 500 MILLIWATTS ARE RELATED TO THE CONSOLIDATION OF RENOMAR. CONSOLIDATED OUTPUT GREW BY 2% TO 10.5 TERAWATT HOURS, while the average price fell by 26% to 86.2 euros per megawatt hour, which explains the 24% decline in generation revenues. Availability improved to 95.8% and contracted output stood at 77.3% for the period. With respect to the ESG metrics in the slide 13, on the social side, we report a large increase in staff due to integration in Acciona Energia of the Acciona Group Renewable Energy ONM Services Company, EROM, last year. We increased the number of women in managerial positions and decreased the accident frequency index. On environment, the alignment of our CAPEX with the taxonomy is total. Emissions increased due to the change in methodology for lease vehicles that go from a scope three to scope one. And we will mitigate this later in the year by reducing the scope two. Waste to landfill increased due to boiler cleaning waste and removal of contaminated soil. Zero use blades go to landfill and we are working on a pilot to reuse blade materials. We have also increased the voluntary tree planting in a major way. On governance, on track to audit 100% of our critical suppliers by the year end. We approve a new ethics channel policy for the protection of those who report on regulatory violations and corruption. And finally, we published our unique impact financing framework, which is very innovative and introduces a local impact component to enhance both sustainability linked as well as green use of process instruments. In slide 14, you can find detail on the breakdown of the 1.5 billion euros of total investment during the period, with 1.1 billion euros of gross capex concentrated in the U.S., Australia, the Americas, and Spain, and over 400 million euros of net capex deferral. A significant part of it represents the payment in January for the Cunningham battery storage system agreed at the end of 2022 and disbursed in early January. In slide 15, we show the cash flow for the period. Operating cash flow amounted to 383 million euros with negative working capital reflecting in part that we paid back the excess regulatory income casting during 2022 and which was provisional and dependent on the final government calculations which were published very late in the year. Financial results increased from 40 million euros in the same period last year to 52 million euros, reflecting higher net debt and higher average cost of debt. Net investment cash flow of 1.1 billion euros as already discussed, and then the payment of the dividend for 230 million euros. The acquisition of Renomar brought around 100 million euros of project finance debt and 161 million euros of cash to our perimeter. That takes debt before IFRS, 16 to 3 billion euros, and to 3.5 billion euros with IFRS. With respect to the debt position, I would highlight the higher average cost of debt during the period, which increases to 4.3%, with the cost of corporate debt at 3.35%, and project debt at 8.5%. Our cost of debt is gradually reflecting the higher base rates, which have increased by 250 to 300 basic points in the last few years or so, even if the spreads are under control or even lower in terms of incremental financing. We have roughly 50% of our debt variable, as we prefer to have a balanced position and not to lock in the current high rates for the long term, with the view that as inflation pressures ease, at some states interest rates may correct. With respect to the average debt maturity, it has increased mainly as a result of the Australian dollar corporate facility device for Macintyre project, which has a 16 year door to door term, which was possible thanks to the structuring with the Spanish sport credit agency under its green policy. We issued our third benchmark green bond in Euro at the end of April, a 500 million euro seven-year bond with a coupon of 3.75%, implying 78 basis points over mid-swaps. It was another very successful transaction on the back of our profile as pure play renewable energy company with top ESG credential and investment grade rating. We tend to trade and price tighter than similar rated companies. For your review, we include the summary of the Spanish power market dynamics in this slide. Much lower prices than the previous years with the first half of 2023 at 88 euros megawatt hour versus 206 euros megawatt hour in the same period last year in a context of declining energy commodities of the peak. The blend of actual prices so far this year and forwards suggest a price of close to 100 euros megawatt hours for the year as a whole, and this has tended to stay relatively stable in recent months, and prices in the forward market in December are higher than the realized price in December 2022. Forward for 2024 are around at the 100 euros megawatt hours, and they have traded between 90 to 105 euros per megawatt hour for a few months now. Hydro reserves for the country remain below five-year averages in another very dry year. In slide 18, you can see the main driver for the Spanish generation business with revenues down 32% to 569 million euros. Output is up by 3% to 5.1 terawatt hours with lower proportion of regulated given the very high prices in the last couple of years, which has been in turn contracted to maintain a highly visible profile. The average active price falls by 34% to 112 euros megawatts, reflecting the lower wholesale prices, uplifted with a significant benefit from the hedging carried out for the period, and with limited impact from the regulatory drivers. The gas flowback during the period amounts to 19 million euros, which is why the achieved price in the unhedged volumes for the period is seven euros megawatt hours, rather than close to 90 euros megawatt hours. In the next slide, the total EBITDA in the Spanish business declined by 38% to 419 million euros relative to an exceptional first half in 2022 of 676 million euros. Generation EBITDA fell by 36% to 430 million euros with lower prices and some impact from the lower output when we exclude the new assets, as well as the regulatory change we have already mentioned. The contribution from the new assets and renumeration aggregate mitigates part of the effect of the lower prices. In slide 20, you can find some statistics on the markets we operate, as well as the evolution of commodities and the main exchange rates that affect us. I would note the pattern of very high prices globally during the mid part of 2022 and how that has corrected following the path of energy commodities. With respect to the key drivers for international generation revenues, volumes are up by just 1.4% with another year of weak resource more than compensated with the output from new assets. The average price falls by 8% to 62 euros megawatt hour, with prices declining in all markets except for Mexico, where we had high income from capacity payments. Generation revenues declined by 7% to 334 million.

Foundations and platforms Tracked by erection, we have, as Rafael mentioned in his presentation, around 275 megawatts already erected, planning to finish with the 650 megawatts by the end of the year. And in parallel with very good progress also in the evacuation infrastructures for the substations and the lines to evacuate. And we will expect to start the energization progress process, sorry, as scheduled on Q1 24. So good progress on McIntyre.

Question number 10, also from Roberto Ranieri at Stifel. Do you see grid connection as an issue for capacity development and operations? What are the main issues on capacity development in general? Rafa, why don't you take that?

Yes, it depends on the market. Grid connection obviously could be a bottleneck for the expansion in new capacity. It depends on the market. In the case of Chile, I said before, that is a big issue with the connection. It's not the case in Spain, not yet, because the grid is very robust. But we are seeing other different issues that are affecting the capacity of development. The permitting could be an issue, especially because the permitting is being delayed because lack of staff in the different government bodies in order to approve the environmental permits or even the social acceptance or the local acceptance could be an issue in some projects. This is not affecting to us in our development because we are also having a very early and good approach to the new territories where we are going to install our projects as a new neighbor in the area and with long-term view of the our state there in order to improve the social and economical conditions of the area getting the social acceptance from the beginning of the project but this grid permitting and social acceptance could be an issue in order to delay the capacity addition well um let me add however that our capacity additions have

Our projected capacity additions have contemplated that problem, and of course we are assuming in the short run. In the long run, we don't know whether that is going to be the process, the political process in Europe is to improve on that fact. So there is new legislation being issued to facilitate the permitting process. We'll still have to see what the result of that legislation is. Question number 11 from JBCM, Jorge Guimaraes. Why the working capital consumption in Acción Energía in first half 23? Yes.

so approximately we have 200 million euros of outflow of which almost half of it i was mentioning in the presentation is related to paying back to the system the excess regulatory income that we have last year um you may recall that the regulatory income was cut last year given the high prices that were seen in the market but the final resolution didn't come until late uh late in the year so we collected so to speak more than it was due and we had to pay it back and that is related to that and the rest is just the normal course of business movements and we expect towards the full year to have to improve the working capital figures compared to the ones in at this point thank you next question from fernando la fuente atalantra

is Renomar contribution in second half.

Yes. So it could add another 40 to 50 million euros of EVTA in the second half, relatively to what we would have had on an equity-accounted basis, which would be around 15 to 20 million in the second half of the year. I don't know if I should add into the details. I think that's what we we should take it in compared to the equity accountants.

Yeah, we haven't got much time, so I think if Amanda wants more detail... Yeah, we can just explain more in detail. Question number 13 is, what is our strategy in green markets hydrogen and electrical vehicle charges how much resources how many risk how much resources would be allocated to these activities why don't jose you take this question hi good morning the answers were indicating significant resources to both initiatives on green hydrogen specifically those resources are dedicated to two joint ventures that we launched

at the one two years ago, which is the joint venture with Plug Power, which has been making good progress, and another which we announced at the beginning of 2023, which is a joint venture with Nordex called Acciona Nordex Green Hydrogen. In Acciona Plug, the joint venture with Plug Power, we have built a significant pipeline of over 300 megawatts of electrolysis in Spain and Portugal, and that is progressing well, with one project moving ahead at a good pace, which is a project in Navarra of 25 megawatts, which we expect to reach COD on in early 2025. And it's a project that we, as was mentioned previously, we think we can achieve reasonable levels of competitiveness even without subsidies. On the Acciona Nordics joint venture, that is an effort or an entity that seeks to develop large-scale off-grid projects in different parts of the world, in areas with exceptionally high renewable resources, with the objective of reaching the lowest possible levelized cost of hydrogen. We are making good progress in a number of places, particularly with projects in Chile, in the US, and in Morocco, and with significant early interest from both partners and potential off-takers. So positive developments in both. Regarding EV charging, we are convinced that the electrification of transport will happen. Our efforts are focused mostly in Spain, up to date. The electrification needs to accelerate significantly to reach the objective set in the National Energy Plan to reach the 5 million EVs that need to be on our roads by 2030. So we are convinced that this is a growing industry and one that already represents a good opportunity. We're investing still relatively modest amounts in 2023, around 15 million euros, but we expect that to grow significantly and we're starting to look at opportunities to internationalize that business and grow in other countries where we have an existing footprint.

Thank you. And final question, and to finish on time, is from Alberto Gandolfi at Goldman, who says, who asks with some degree of skepticism, I believe, how can you end at 2.5 times net debt to EBITDA if in first half you are at 3.5 billion, and if it is because CapEx is H2 in the second half, it's lower in the second half, how can you head towards 1.7 to 2 gigawatts annual additions if CapEx is slowing down? Alan Chang.

First, you have to consider, and we have been mentioning through the presentation, that some of the CapEx payments are front-end loaded, and also you have to consider that we have also the dividend payment. Second, we expect significant proceeds from the tax equity investors and partners on the second half of the year, and also remember that I just mentioned that we also are expecting to have improvements in the working capital. That's why we will reach to that figure.

And let me reiterate that CapEx is not slowing down. It may just be lower in the second half than in the first half, but it doesn't mean by any means that it is slowing down. Thank you very much indeed. And that's it for the Energia, for Acciona Energia. We will in a couple of minutes start the Acciona group presentation and Q&A. Thank you. Okay. Hello again. Good morning and welcome to the ACCIONA group first half results presentation for all those who weren't in the ENERGIA presentation. Let me start by stating that our strategy based on decarbonization of infrastructures and services is gaining momentum and recognition. what was originally a matter of business ethics and has developed into ACCIONA's most valuable competitive advantage. We have become the main reference in sustainable infrastructure solutions with 99% of our investments aligned with the European taxonomy of sustainable activities. We do not believe there is another company with presence in nine different sectors, energy, infrastructures, water, mobility, wind turbine manufacturing, waste treatment and other environmental services, real estate development and asset management. Those are the nine, which is so holistically aligned with the European taxonomy and the SDG. After 20 years of effort, I believe we can now safely say we are the world's most genuine sustainable infrastructure solution provider. Fundamentally to the SDG number six, which is clean water, SDG number seven, which is clean energy, SDG number nine, which is infrastructure, and SDG number 11, which is sustainable cities. All SDGs, all sustainable development goals, which are infrastructure related. This strategic focus, while in the past some may have found idealistic, romantic, or even business unfriendly, has become Acciona's most differential asset, our most talent-attracting figure, and our greatest source of new business opportunities. Our solid balance sheet is based on the stability of the revenues of our renewable energy assets and our growing concessions portfolio for which we are projecting rapid growth in the coming years. We are leading the investment in activities that are driving the new decarbonized economic model. In the first half of 2023, We accelerated our investment plans, reaching a record figure of 2.2 billion, the equivalent of what we invested in all of 2022, 81% more than in first half of 2022. That is, in 2023, 81% more than in 2022. 70% of this investment was focused on our energy business. But another key growth driver, often underweighted by the market, comes from our infrastructure business, which I will refer later. In Energia, just highlighting what we have presented in the Acciona Energia presentation just before. While EBITDA was down 25% versus 2022, mostly because of another ultimately untimely regulatory change in Spain and the 26% reduction in generation prices. Still, our financial performance significantly exceeds what we and the market projected at the time of the IPO two years ago. Excuse me just one second. Our capex of 1.5 billion double that of 2022, and we are on track to deliver 1.8 gigawatts of installed capacity in 2023, an equivalent amount in 2024, and 2 gigawatts going forward based on organic growth, hence improvable with M&A. We have signed around eight terawatt hours of new PPAs in the last couple of years. And by the end of this year, we will have added three gigawatts of total capacity since our listing. In terms of our IPO 20 gigawatt target, we are catching up. with a 12 to 18-month delay announced a few weeks ago, resulting from post-COVID supply chain problems. We are now confident we can at least maintain a similar growth rate in the coming years while maintaining our risk-return discipline and balance sheet strength. All in all, over the last two years, Acciona Energía is delivering returns well above our IPO expectations, 600 million is above and more than what the EBITDA projected in the IPO, and has invested 3 billion while only increasing net financial debt by 1.1 billion, thus protecting our credit rating. As for future growth, we have significantly strengthened our presence in our poor markets, Australia, North America, and Europe, and have opened seven new markets, seven new countries, Vietnam, Philippines, and Thailand in Southeast Asia, Brazil, Peru, and the Dominican Republic in Latam, and our energy-efficient business in France. Our geographical base for future growth has never been better, and we are also positioning ourselves in additional emerging technologies such as batteries, green hydrogen, or offshore floating. I fear there may be some degree of disconnection between the reality of our company and market perception, and I'm convinced we will soon bridge as we continue to deliver healthy growth. Despite strong stock market pessimism with higher interest rates, higher capex, and energy prices past their peak, we believe the general context is highly favorable as the ambition of the climate agenda and decarbonization through electrification is going exponentially. As for infrastructures, our infrastructure business has experienced a very healthy first half with simultaneous growth in revenues, which is up 37%, growth in EBITDA margin by 14%, going from 5.6% to 6.4%, and also in backlog. Now, at the historic... record of 46 billion euros. Unprecedented global infrastructure investment plans present a historic opportunity that we are seizing through five key strategic lines of action focused on risk mitigation and margin improvement. Number one would be a very selective approach to our regional footprint. Mainly, we focus on OECD countries with substantial investment plans so that there is scalability and, of course, a reliable legal framework. That would be Europe, North America, Brazil and other stable Latin American countries. and the philippines australia and exceptionally water contracts in hong kong and the gulf countries number two would be risk mitigation strategies via new contractual models such as alliance collaborative contracts and selective approach to clients and project profiles we try to favor technically complex contracts with fewer competitors and lower clients' price sensitivity. Number three would be a focus on concessions. Our global footprint provides us with a wide range of greenfield investment opportunities. More than 1.8 A billion investment over the next five years in equity has already been committed. And we follow a plain vanilla strategy based on greenfield to brownfield, de-risking, margin compression, and asset rotation in the concession side. Then number four would be technical excellence to compete in technically complex sustainable infrastructure projects, mainly through digitalization of processes, very strong design and engineering, and other in-house capability and enhancement of our attractiveness as employer of choice for STEM talent. And finally, number five would be a differentiated approach to social and environmental positive impact. What I was mentioning that initially could have been a romantic element is now becoming an incredibly powerful commercial tool. And we... make it a reality through sophisticated, innovative emission reduction, regenerative and positive social impact programs. A few good examples of this approach over the last six months would be, for example, the consolidation of our transmission line credentials in two major contracts in Australia and Latin America. the growth in the water sector by 9 percent in the first half of 23 over 22, both in EPC and service revenues, with key contracts signed in Italy and the Philippines, and the very important strategic opportunities under negotiations in Brazil and MENA and Middle East and North Africa and Australia. Another example could be the consolidation as the first non-domestic contractor in the Philippines and the development of urban services with the start of operations in Ness and the Ness project in the waste to energy plant in the UK and various other contracts in Spain. Summarizing, our growing recognition as a leading provider of climate, resilient, environmentally positive, and socially regenerative infrastructures is driving our business to unprecedented growth and significantly improved risk-return equation. Let me jump on to Nordics. where our 47.08 stake entails, from now on, global consolidation. Here, megatrends have significantly improved its growth prospects for the next decades. European net zero, US IRA, or Australian decarbonization plans among many other plans around the world, decarbonization plans around the world, these being the key in our key markets, the most important key markets, say together with green hydrogen demand, policy momentum and improved pricing pressure are driving the wind turbine industry towards an undoubtedly brighter future. covid related supply chain raw materials and logistic headwinds are now turning around and nordics is uniquely positioned to benefit from the energy transition as it is the fastest growing onshore wind turbine oem in outside china and of course the third global player and number two in the european market Its highly competitive cost of energy optimized product portfolio, its strong order intake momentum together with the industry-wide tailwinds make us confident of its future performance. Going to our asset management business, Westinberg, the company has reached the $6 billion of assets under management. with a 15% increase over 2022. It has been so far a very good year. for our traditional equity funds in terms of returns and growth. And all those returns are high double-digit and performing better than our benchmarks and most of the competition. This, of course, should lead to significant improvements in net inflows in the coming months. There's also significant progress in alternative funds, having reached our first infrastructure fund capital raise target of $300 million, with 90% already invested in a portfolio of nine high-quality diversified infrastructure assets. Similarly, we will soon be launching a first real estate investment vehicle, and we have reached an agreement with BlackRock by which a new Best Invert BlackRock private equity fund will have privileged conditions to invest in BlackRock private equity funds ecosystem. In summary, very good returns in our traditional products and excellent progress in our product building strategy, leverage on accionas, know-how, footprint, and investment opportunities in real estate and infrastructure and on BlackRock in private equity. As for real estate, again, sustainability attributes are differentiation-based or built to rent, built to sell iconic buildings or residential products in Spain, Portugal, Poland, and Mexico. It is worth noting that we certify 100% of our residential products with 80% reaching maximum ratings, and that our office building ratings are among the world's highest scores in LEED or WELL certificates. In particular, within our circularity recovery and transformation of iconic buildings strategy, it is worth noting our recently inaugurated headquarters in Madrid, from where I'm speaking, originally Banesto's headquarters, a 1956 Banesto headquarters, turn into possibly one of Europe's most sustainable, attractive, and employee-friendly in-town campuses. From a financial point of view, our real estate division is still in the build-up phase, but we are very confident that substantial P&L contribution, adding to a consistently yearly growth in NAV, will soon be visible. As for mobility, In an attempt to go beyond our conventional boundaries in profitably contributing to and profitably contributing to sustainability, we continue to make progress in electric mobility. Under the Silenz brand, we manufacture and sell 18% of Europe's electric motorcycles, over 14,000 projected sales in 2023. and are gearing up for the commercial launch of our micro car silent 04 uh so4 at the end of this year it's convenient size it's prize and it's extractable exchangeable battery pack make it a uniquely practical, versatile, economically accessible, and environmentally friendly vehicle. Urban. We also see promising opportunities in the second life battery cycle as a competitive balance to renewable generation peaking and through the recent acquisition of Solideo, the energy efficiency company, playing also an important role in the growing market of solar communities in Spain through the Silence Home project. To finish, as you can see, we have what appears to be another strong year ahead of us, while continuing to lay the basis for solid long-term growth with a combination of mature and emerging lines of business aligned around the sustainability as has been recognized by all major global sustainability and ESG industries. Thank you for your attention. I now give the floor to Jose Angel Tejero, our CFSO, for further detail, and we will take questions after that. Thank you.

Thank you, José Manuel, and good morning to everyone. We'll make a short review of ACCIONA financial results in the first half of the year. Starting with the key financial highlights, revenues grew by 7% and EBITDA fell by 13% as a result of 25% fall in energy and 47% increase in the non-energy businesses. A very solid growth driven by infrastructure. The VDA of energy reflects the partial normalization of power prices in Spain, also affected by the impact of change of the remuneration parameters applicable in Spain in the 23-25 regulatory period. However, achieved prices are still relatively high compared to historical levels. These results include the full consolidation of Nordex since April 1st after having reached 47.1% of its share capital. Nordex has contributed $1.5 billion of revenues and has reached breaking point at the BDA level in the second quarter of 2023. Profits without taxes reached $691 million, and attributable net profits reached $467 million, a 132% increase versus the same period of last year. Excluding the impact of the change in Nordic consolidation method, attributable to net profit would have been $206 million, a 2% growth versus the first half of 2022. We have invested $2.2 billion in the first six months of 2023, 81% more than the first half of 2022, and net financial debt at the end of June stands at $7 billion versus $5.2 billion at December 2022. The following slide, you can find the ESG highlights and key environmental and social performance metrics. Firstly, it's important to highlight that at this moment, Nordic's data is not integrated in this semester due to both companies are using different measurement methodologies. However, we expect that by the end of the fiscal year, the financial information models will be fully integrated, allowing us to provide consolidating ESG indicators for the group. Moving on to Acciona Ex Nordes, in the social aspect, it is worth noting that the increase in staff has been utilized to significantly improve gender representation, particularly in managerial positions. We have managed to increase the gender quota by 1.3 percentage points, a notable achievement in a workforce of nearly 50,000 people. Shifting focus to environmental data, As our CEO has already highlighted, we have achieved almost complete aligning to eligible investment with the taxonomy. While there might be a slight decrease in this figure during the second semester, we are confident it will remain well above our strategic aligning target of 90%. As noteworthy milestones for this semester, we established an SDG budget enabling key projects to proactively track important sustainable management variables. Additionally, we have adopted a new sustainable and impact financing framework, recognized as one of the most advanced and distinctive in the market for green financing. Going to the next slide, the data evolution. you can see that the main cash flow items that explain the evolution of net debt in the first six months of the year. The most important moving part has been the 2.2 net investment already mentioned. Working capital outflow of 459 million in the first half year includes 207 working capital consumption of actual energy, of which almost half is related to paying back to the system the excess regulated income we collected last year. The 252 million in the rest of the group consistent in the usual seasonality and growth achieved by the non-energy businesses revenue. As a result, we finished the first half of 2022 with 7.66 million of net debt. It is important to highlight that almost 50% of the total net debt corresponds to debt associated to work in progress related to renewable assets that have been under construction right now and will be EBITDA contributors once they are finished. In the next slide, we can see the investment by division, and we provide here the details. Aside from the 1.5 invested in Acción Energía, we have invested $160 million in infrastructure, $302 million in Nordex, and $103 million in other activities, and $136 million in property development, which includes the land acquisition of $54 million. The $302 million invested in Nordex includes $272 million shareholder loan granted by Acciona to Nordex that has been converted afterward in equity. The rest of it is Nordex-owned CapEx. Going to the next slide, we provide some outlook for the rest of the year. Our current EBITDA expectation for the full year is a range of 1.2 and 1.3 in Action Energía, still above the levels we expected at the time of IPO, and unchanged solid double-digit growth in the rest of the activities, with a positive contribution from Nordex at the EBITDA level. In terms of net investment cash flow, we expect to invest around 3.1 of consolidated capex, of which 2 billion will be invested in energy and the remaining 1.1 billion in the rest of the group. The expectation includes Nordics' own estimated capex of around 170 between April and December. We expect profit before tax to grow a strong double digit, which is a positive contribution for Nordics. going going forward to the next slide and we go to the operating results of the different business and in energy given that it just presented the first half results in full detail and that the ceo has already given you some of the most important figures of the business i'm not going to go through the specific advice um just if you can go straight to action infrastructure moving to infrastructure Given that the CEO also has already presented the main first-hand figure, I will go straight to more detailed details of the different businesses. Going into construction, the performance of the construction activities of the first semester of 2023 have performed very positively, both in terms of revenues and VDAs. Sales reached 2,925 million, up 46%, driven by the good performance of the company's main countries, main projects in Australia and Brazil, which remain the main countries for the construction business. EBITDA rose to 148 million, up 75%, compared to the first half of 2022. It is worth noting that the significant increase in margins achieved from 4.2% in the first half of 2022 to 5% in the current year. This improvement in the BDA margin is based on the growth in international activities and in the good pace of execution of capital intensive projects. In this way, works have started in the Western Harbour Tunnel, the largest contract in our backlog, while Sao Paulo Line 6 project, another major contract, is progressing well. If we go into concession, the next slide, concession business also performed well in the first half of 2023, with the BDA growing significantly to 31 million, which is 110% higher than the same period of 2022. The VDA growth was driven by the good progress of the Sao Paulo Metro Line 6 project in Brazil, which is already 32% complete. The first half of 2023 also saw our consolidation of the transmission lines market, where we have been selected as first-ranked proponent for the Central West Oral Omega project I have just mentioned. The contract includes the design, construction, operation, and maintenance of 250 kilometers of transmission lines, including substation for 31 years. The total investment in the project is expected to be 7.2 billion Australian dollars. Acciona has 50% stake in the construction consortium and 36% stake in the concessionaire. In addition, this week we have announced the award of our second concession project in the U.S., a contract to design, build, finance, and operate and maintain the new Calcasieu River Bridge for 50 years, part of the interstate I-10 highway in Louisiana. The U.S. $2.1 billion project will include the replacement of an existing bridge, which is more than 70 years old. The project construction will be executed by joint venture between Acciona and Satir, while Acciona will have 30% of the concession. These projects are good examples of the capabilities and synergies of our businesses, which allow us to deal with large contracts. Including them, we have a US$1.8 billion investment already committed in our current portfolio of concessions. Going to water rapidly, in the next slide, you will have a test of the performance of the water business, which has obtained $610 million in revenues and a growth of 8.8% compared to the first half of $22 and $45 million of APTA. And going over the next slide into Nordics performance, Each one's results have already been published, as the company published yesterday its results and held a conference call explaining them. So, we'll go very briefly over the main magnitudes. Nordisk's results have shown a very relevant improvement in the second quarter of the year versus the first one, with a 12.2 gross margin and break-even at the BTA level. As Nordic Management has explained, we expect further margins improvement sequentially each quarter, with overall further improvement in the second half of the year. Yesterday, Nordic Management reiterated its guidance for 23 and mid-term strategic margin target of 8% margin EBITDA confirmed. Going to the other activities of the group, and one by one, in property development, the results in the first half has been affected by the seasonality of the business, with only 24 units delivered. We expect to deliver around 800 units in the whole year, and 95% of them will be concentrated in the last quarter. The gross asset value has increased 12% to more than 1.7 billion. With regards to best in bed, the results reflect the lower average assets under management and the discontinuation of the Italian subsidiary. However, in the first six months of the year, the total funds under management have increased which is more or less 6 billion as of today, with a 17% year-to-date positive performance of the three largest traditional equity and fixed income funds. Lastly, the number of electric vehicles sold by Silence in the first half of the year has been 9% lower than the same period of last year, consistent with the global decrease of the electric mobility sector in Europe. We manufacture and sell 18% of Europe's electric motorcycles, and with the commercial launch of a microcar, Silence 04, at the end of this year we expect to sell over 14,000 units Thank you for your attention. Let me have the floor back to .

Okay. Thank you, José Ángel. Let's start with the Q&A. And the first question would be for – from Fernando García at the Royal Bank of Canada and JBCM, Jorge Guimaraes. What is our strategy with Nordex going forward, keeping our stake at this level or increasing and decreasing? Our strategy is to stay at this level. Basically, I do not expect to move our position from the present level. There's also a question from, I'm not sure from who it is, but on working capital cycle for Nordics. and the fact that it's a different working capital cycle than the construction, and how do we manage that different cycle in working capital? I think the answer to that is... The Nordics has its own financing strategy, its own financing capacity, which is at this stage very healthy. And we do not need to participate in ACCIONA. We do not foresee the need to participate from the side of the shareholder ACCIONA. in any further financial support. At this stage, things look very positive from the Nordex balance sheet position. Then question number two comes from Fernando Garcia at RBC. Now, net debt stands at 7 billion. Could you provide details of ACCIONA capital structure strategy? I'll pass it on to José Ángel if he wants to add anything, but let me just state that this can be a very ample, very wide answer. But let me give you the very short answer, which is maintaining investment grade is the utmost objective, and that will guide all the capital structure strategies. Do you want to add anything, José Ángel?

I think that the only thing that I add is that net debt, our expectation is that net debt stays more or less flat from here to the end of the year. with more of that debt that is associated to assets that are under construction passing into assets that are already, you know, into operation and provided additional comfort and coverage to the interest charge and debt as a whole.

Question number three from Fernando Garcia, RRBC. Could you provide details of the 459 negative working capital at accional level? What do you expect for the rest of the year?

Well, as I think that I made a mention in my speech, but basically the 459, 207 corresponds to energy. And in the energy presentation, they have made the projection that this will be coming down the second half of the year. The rest of this is 222 infra and 33 for the rest of the group. And this figure reflects the usual seasonality. The working capital that we expect for the rest of the 2023 year will be around $200 million as a whole. We expect energy can bring that $207 million to around $50 million, and the rest of the good will contribute around $150 million.

Thank you. Number four, CaixaBank from Flora Trindade and Jose Ruiz from Barclays. Do you expect to see margins in construction to remain at this level going forward? The very short answer is yes, indeed. But let me pass on the floor to Luis Castilla, our CEO in infrastructures, to give you a little more color on the answer of that question.

Thank you. Yes, we expect to maintain a minimum of 5% of EBITDA in our business. This is coming from the good quality of the portfolio, the new awards that we have received, and in particular from the increase on the collaborative projects that we are enjoying, particularly in our first construction market in Australia, where we have more than 60% of these collaborative projects.

Yeah, let me add that that high-quality portfolio or their backlog and the much-improved risk Profile of the contracts is a result of, in general, is a result of very, very high demand in this industry with very significant investment project programs around the world. and very important needs, social and environmental infrastructure needs, that are, of course, pulling from the demand side, so giving the supply side, that is ourselves, particularly in companies with a very high technical profile, such as Acciona, giving us a great opportunity to be very selective in terms of clients, markets, type of contracts, type of projects, et cetera, et cetera. So that is resulting in a very healthy backlog, a very large backlog, but still a very selective one. Question number five on the property development from Flora Trindade at CaixaBank. Considering the weak first half results in real estate, do you maintain the 800 units for the year?

Thank you, José Manuel. Yes, the answer is yes. We maintain the target of delivering around 800 units this year. The first half results have been affected by the seasonality, only delivering 24 units, but you have to bear in mind that according to our calendar of deliveries, 95% of the total units of the year are going to be delivered in the last part, in the first part, actually. And almost 100% of them are already pre-sold, as is seen in our backlog of pre-sales, which is more than 1,700 units. But, Andres, maybe you want to add something about this or give some color on 2024 and 2025 expectations?

Andres Pan is the CEO of, as you know, our real estate unit.

Thank you. I understand perfectly the question because of the seasonality of our business. we have achieved 800 deliveries, but 95% are concentrated in Q4. 45% are domestic, 55% international. Out of those, 97% of the domestic is already sold, and 100% of the international deliveries are already sold. Concerning next year, in 24, we expect a number of deliveries close to 1,000 units. Out of those, 71% are already sold, And from 2025 onwards, the number of deliveries will be close to 1,500 units.

Thank you, Andrés. Question number six from CaixaBank, Flora Trindade. Can you provide us with numbers on invested capital in the mobility segment and the concessions? José Andrés, please. For sure. I'm sorry.

Yeah. The capital investment that we have in the mobility segment, including, of course, silence, is $145 million so far. Going into concessions, what we have is investors so far As of June, 186 million. But let me add also that we have in water concessions an additional 148 million. Obviously, that does not take into account that we have an additional 1.8 billion in U.S. dollars commitments from now until 2028. Also, for this year, just to give you a little bit of light, the additional investment that we plan to do in concessions is mainly Line 6 and La Serena Hospital, and we plan to do an additional 70 million.

Let me stress that, as I've said, in the next years, we have already committed, I think it's 1.8 billion in equity infusions in our concession business, which should be a strong improvement, strong growth in that side of the business. Question number seven. Do you see, this is from Barclays, Jose Ruiz, do you see any sign in improvement in second half EBITDA for second, in EBITDA for Westinberg? I think Ike Crezpla, CEO of Westinberg is here, so please take that.

Okay, the answer is yes, we do, and we do considering good performance of our equity and fixing on... It was connected, so repeat, please. Yes, sorry. Yes, we do, and we do consider, first of all, the good performance of our equity and fixing on funds year-to-date. Second, the increase in AUMs. As you said, we are very close now to 6 billion, and especially the increase in average AUMs. In the first half of this year, we have been very penalized for that. Third, the contribution of the new alternative vehicles that we will launch from September, such as the real estate and the private equity. And finally, we expect a better contribution from our investment bank business in the coming months and in 2024. Thank you.

Thank you, Kike. Question from Jose Ruiz at Barclays. Do you plan any disposal to reduce net debt? No, not in the short run. As I have said, the guiding principle in our capital structure, i.e., in our debt to equity or debt to EBITDA ratio is the rating, the investment rate rating, and that doesn't seem to be at all at any risk at this stage, so no sale of assets will be done for that purpose. selling and rotation of assets may be done for other purposes or for other reasons, such as in maybe a very high price being offered for a product, which of course for an asset, which of course will mean that we may consider it. But for debt reduction or leverage reduction purposes, we do not intend to sell any assets because the position is comfortable at the present stage and going forward. And question number nine is from Alantra, Fernando Lafuente. Activity has been strong in construction with revenues growing 46%. What do you expect for second half and for 2024? We expect... We expect continuity in the second half as for the first half. And we expect to be at around the same levels, over 30% compared to last year. Although this percentage-wise, beginning of last year was a slow start. was only starting to pick up because of the supply chain problems and all the problems that you know and market tensions. So the comparison to last year is higher on the first half than it will be on the second half. However, the rhythm in construction continues stable in the year. From the point of view of the coming years, we do expect a double-digit 10% turnover growth in revenues in the coming few years, what we can foresee with the current backlog. So that is the end of the questions. So thank you very much indeed. And we'll see you at the end of the year, if not earlier, for any questions or clarifications that you may require. Thank you very much.