Acciona Sa

Good morning, ladies and gentlemen, and welcome to Acciona's financial results presentation for fiscal year 2024. 2024 has been a transformational year for our group. We achieved a record EBITDA of 2.5 billion, with more than half generated by our infrastructure segment and Nordics. Our infrastructure backlog now stands at an all-time high of 54 billion, driven by several landmark concession awards that will redefine our company in the years to come. Acciona Energía set new records by adding two gigawatts of capacity in the year, building on the 1.7 gigawatts achieved in 2023 and marking the peak of our recent growth cycle. Our energy asset rotation activity has also delivered strong results with 1.3 billion completed to date at very attractive valuations. As we look ahead, we have several promising opportunities and we will remain flexible evaluating options based on pricing, strategic fit and partner quality. Despite facing a challenging market in Spain during the first half of the year, Acciona Energía delivered comfortably on our revised guidance while protecting our balance sheet, maintaining our credit rating, and avoiding capex overruns or write-offs. This resilience has transformed initial challenges into a successful outcome for the year as we see it. As for Nordics, it has shown a remarkable recovery over the recent years, and in 2024 we witnessed the consolidation of this turnaround marked by a rebound on profit margins, record order intake, a robust cash position, and over 20% growth in its order book. Given the recent debate on renewables, renewables versus fossils, let's say, let me very briefly share my perspective on the renewable energy market. Regardless of climate skepticism or ideological opposition, we are living in an era of rising global electricity demand. And renewables remain the most competitive, the most secure, and most rapidly deployable source of power, even in countries with abundant fossil resources. Renewables are the cleanest, cheapest, most secure, autochthonous source of energy, local. And today we have managed to disprove the notion that grid stability and security of supply could only accommodate a small percentage of renewables. That was the thinking for many years. In fact, in the Iberian Peninsula, I think it's likely to be the world's first example of an energy island serving more than 60 million heavy consumers where renewables consistently supply 60% of the electricity demand at one of Europe's most affordable prices in generation. Of course, this new generation paradigm has brought new challenges such as curtailments and historically low prices, particularly during the beginning of last year. We believe, however, that regardless of the minor regulatory adjustments that may be required for a very heavy renewable intensive electricity grid, new demand will soon restore balance as seen both in Spain and in comparable U.S. markets. My assessment is not only my own, my own empirical economic conclusion. It is proven by the fact that globally in 2024, for the 23rd consecutive year, a record renewable capacity additions of 500 gigawatts were built. And only in the US, 90% of the new capacity was renewable. And for those who consider nuclear as a viable alternative in the short run, I would just suggest that we look at Hinkley Point in the UK, Flamanville in France, Okiloto in Finland, or Voktel in Georgia, which all illustrate the challenges with nuclear. huge budget overruns, extended delays, and production costs which produce LCOEs of four to six times those of wind or solar. Simply put, renewables are the most competitive, secure, and rapidly deployable source of electricity for both developing and developed economies. But for Spain and other early adopters, this is particularly true if we were to take full advantage of the wind repowering opportunity, the lowest hanging fruit in the decarbonization of our power matrix, enhancement of our energy security, and reduction of our electricity costs. By replacing aging turbines with fewer, larger, more modern units installed in optimal sites, with reduced environmental footprint, minimal grid investment, and low social opposition, we can potentially double or even triple install capacity in record time. In this regard, we welcome the launch of the Clean Industrial Deal, which paves the way for a stronger, greener and more innovative Europe supporting net-zero European industry, an opportunity for which ACCIONA and Nordics are undoubtedly well positioned to play a key role. While our outlook for renewables confirms that clean energy remains the most competitive and secure solution for the future, 2024 has been a transformational year for ACCIONA with good financial performance, record backlog in infrastructure, record new capacity additions in energy, good asset rotation, and consolidation of Nordic's turnarounds. That now I would like to hand over to the presentations of Rafael Mateo, CEO of Accion Energía, and José Entre Canales, Chief Financial Sustainability Officer, who will guide you through our Energía results. Following this presentation, we will conduct the Q&A on the energy side. before moving on to ACCIONA Group results presentations and Q&A. Thanks very much.

Thank you and good morning. As Jose Manuel commented in his introduction, 2024 has been a very good year for the company from the strategic perspective. And in my view, we have delivered what we promised the year ago in terms of capacity growth, controlled capex, debt, asset rotation, and credit rating protection. Indeed, one of our key targets for the year was to construct 1.7 gigawatts of new capacity, and we ended up adding 2 gigawatts of new capacity, including the 300 megawatts of operational wind capacity that we acquired opportunistically in Texas, leaving the excellent fit with our existing operations and know-how. Two gigawatts of gross capacity additions is really a true landmark for a company and marks the peak of the post-IPO growth acceleration phase. Very importantly, we completed the construction of our largest ever wind farm in the portfolio, McIntyre in Queensland, Australia, with 923 megawatts of installed capacity. We started the commissioning process at the end of the last year, and it will take us most of 2025 to connect McIntyre in full. The asset rotation strategy we announced a year ago is off to a great start, and we have achieved the targets that we set ourselves for the year with 1.3 billion euros of proceeds achieved, having completed the disposal of hydro assets to Endesa two days ago and the sale to Ilaguan in November last year. In terms of gains from asset rotation, we are also delivering our targets as we have generated 650 million euros distributed between 2024 and 2025. The implicit valuation of the hydro asset disposal of 1.6 million euros per megawatt is far above that was implicit in our surprise. From a financial point of view, the first half of the year wasn't easy. particularly in the Spanish market, and we had to revise down our EBITDA expectation. But finally, we have closed above our target of 1 billion EBITDA from operations, not too far from our initial 1.1 billion EBITDA outlook. Rotation gains amounted to 127 million euros, a portion of it at the EBITDA level and a part of it below. It's important to mention here that Project CAPEX's cost didn't give us any bad surprises in 2024, and we were extremely close to the original budget. Additionally, we don't have any improvements other than the 32 million residual book value of the Taibiya wind farm that we are dismantling for repowering in Spain. In terms of the balance sheet, I'm very happy with the outcome of our efforts to contain increases in debt in the context of the 23-24 peak in investment. We moderate the CAPEX for the period 24-25 by around 500 million euros relative to our initial business plan in order to reduce the pressure from the balance sheet. And additionally, some investment were pushed back from 24 to 25, providing a smoother profile for CAPEX. Also in 2024, it was key for us to formalize the agreement with our partners in Australia, Korean Sink, with respect to the investment in the 30% of the wind farm McIntyre. We monetized the capex spent on their behalf until July 24, which amounted to €350 million. And we also monetize U.S. tax incentives in the U.S. market of 260 million euros, which also contributed to reducing our net cash outflow from investment last year. Given the high point in investment and leverage, maintaining our investment grade rating is another key task for us. Fitch conducted two reviews during the year in June and December in maintaining our triple V minus rating with a stable outlook in both. Fitch recognized in December the progress on our asset rotation activities and our commitment to protect the rating. Also, the EBRS conducted one review, giving us a BBB middle with stable outlook, reflecting the peak in leverage but still maintaining a solid investment rating. In the next slide, we have included other important strategic developments during 2024 that are included, among others, the start of the energization of the wind farm 40 miles in Canada, the commissioning of our large solar project in the U.S., A very good progress in our Dominican Republic projects, the return to India with the construction of a PV asset in Juna, in Rajasthan, a new PPA for a solar asset in Croatia, or the start of construction of our first wind farm in the Philippines markets. In the next slide, slide seven, we put in context the two gigawatts of new capacity added this year that was a remarkable acceleration of growth post-IPO in 23 and 24. In 2025, we are planning to add a more modest amount of capacity around one gigawatt, still higher than our historical run rates. The new capacity will be spread across traditional markets and more recent divisions. We are investing mainly in storage, batteries, onshore wind, solar PV, and also including some repowering and biomass. We will build the Adelaide and Conflower battery storage plants in Texas. We will complete the large Aldoga and Yuna solar PV projects in Australia and India, as well as the wind farm 40 miles in Canada. In Spain, we will complete the repowering of Taibiga wind farm and the commissioning of the 50 MW Logrosan biomass plant. We will also build the Kalayan 2 wind farm in the Philippines or the Pedro Corto PV plant in Dominican Republic. Our project pipeline to fuel the future growth stands at 34 gigawatts, very well diversified across technologies and geographies. But we will focus our activity on the most profitable projects without being tied to a specific capacity addition targets, always subject to investment ratings and always controlling the health of our asset rotation activity. The sector has lived with the problems that came along with the post-pandemic recovery, supply chain disruptions, permitting delays, cost overruns, and racking interest rates. Some of these problems are still affecting companies across the renewable landscape. But the sector is today more mature, more competitive, and despite of saturation in some markets, there is still plenty of capacity to be profitable. Unlike publicly traded markets, private markets see this growth opportunity today and are seizing the opportunity to invest in renewal and operating assets alike. This is providing the necessary capital for companies like us to continue growing. The sector is now aiming at more modest rates, but this growth is more targeted and more selective. In our case, in the case of ACCIONA Energía, one of our most obvious strengths with respect to the future growth opportunities comes from our existing footprint. In slide 8, we summarized our strong presence in the key markets across the world in terms of storage capacity at year-end, output, near-term capacity additions, and pipeline. Europe, North America, Latam, Australia, plus some growth markets such as South America, India or Southeast Asia, make it a unique platform from which to continue building ACCIONA Energía's continued success. On the slide 9, we have put together some statistics about the potential growth in the regions where we currently operate and how we adapt our strategy to the different levels of maturity of the markets or the state of the grid or the demand growth or the dynamics of replacing fossil fuels. So in North America, we see opportunities given the competitiveness and fast deployment of green energy against the backdrop of potential of new demand from data centers or the commissioning of the very old and dirty coal plants. In LATAM, the electricity demand will grow on the back of energy-intensive sectors like mining, as well as economic growth. We will be targeting selected investment in the market subject to the transmission, grid availability, political developments, and power price dynamics. The Australian market is one with land, renewable resources, and the commissioning coal that still today represents 45% of the generation. In this market in Australia, we have a very strong wind and battery storage landfill pipeline. And in Europe, in particular in markets like Spain, we see already higher energy penetration and adequate, enough adequate transmission rates, but also strong commitments with net zero policies. Europe is also pushing to increase the energy security and the independence. Here we also see selective growth in onshore wind, solar projects, as well as biomass, hybrid, repowering, some opportunities given our vast operational asset base finally we have the high growth markets like south africa india or southeast asia where we have two operations On the slide 10, I want to spend a couple of minutes on the U.S. market to put the things in context. It's true that the politics have changed in a radical way. The new Trump administration has been taking fast action through presidential executive orders, and there is today a new rhetoric against renewals. Investors seem to be penalizing operators with exposure to the U.S. renewable energy market, while being more bullish about generation companies with data centers, demand angle, or integrated players. In our case, in the case of Accion Energy, I just want to stress a few simple messages. Firstly, our US market presence is significant but also balanced, representing something around 15-20% of our business in terms of output, pipeline or expected capacity additions in the next three years. Our exposure to the US energy policy volatility is very limited. We don't have a lot of under construction at the moment. Having just completed a very large and concentrated solar PV construction program, adding in the past year 1.3 gigawatts. We are starting today the construction of two battery storage facilities for 100 megawatts to hours and planning to build another two medium-sized solar PV, but in 26 or 27. We are not constructing or planning any onshore wind farms in the next couple of years, and we don't have any kind of offshore wind projects at risk. Moreover, we have protected our pipeline and the projects under construction in the U.S. market to 2028 by safe harboring our right to claim the tax credits and by building room enough to maneuver into our storage project in Ercot, Texas, with respect to any potential increases in tariffs. Finally, we believe that the U.S. market will remain as one of our key destinations for renewable energy investment in the world, given the size of the market and given the strong fundamentals, whatever the short-term disruption that policy dynamics may introduce today. We have seen that in the past, the market may take some time to overcome the disruptions, but we are very confident it will settle and adjust to the new conditions, even if it takes one or two years. Here again, we think that renewables growth is a fact of life also in the U.S. market. Moving to our priorities in 2025, in slide 11, I'd like to say that although every year is important, 2025 culminates a period of two years of transformation. assimilating the massive investment effort we made in the last couple of years, adapting the company to the new operational environment, higher work, higher in capex cost, lower stock valuation, and kick-starting our asset rotation strategy. 2025 is the year that we break the back of the high cap cycle with a strong debt reduction, also reduction in working progress and a stabilization at credit ratios that are sustainable, consistent with our investment grade. 2024 was about constructing close to 2 gigawatts of capacity, and 2025 is about connecting and starting to harvest EVTA from the 2 gigawatts we built in 2024. 2025 is a year of intense asset rotation activity to help bring our leverage ratios down. The large hazard rotation plans during 2024 and 2025 are also contributing to refocus our geographic exposure, reducing the weight of Spain and increasing our concentration in the strategic markets. Our ambition is that by the end of 2025 ACCIONA Energia will be a renewed company. We will be a company with lower leverage, with investment-grade ratings, more stable credit metrics, and reduced exposure to Spanish prices after the asset disposal. Our core single markets for long-term growth will be Australia, the U.S., but complemented by opportunities in Europe, in Latin, and the high-growth markets that we referred before. We will remain a mostly onshore wind company but with presence in solar and very selective investment in other technologies like battery storage of biomass. We will maintain around 70% of our revenues long-term contracted in line with our risk preference, remaining a highly cash flow generative company with a minimum maintenance capex requirement. Our fleet is still relatively young and we continue to retain life extension as part of our strategy, complemented with some repowering. We target a mid-single-digit medium-term growth, a beta from operations, consistent with the net capacity additions that José will refer to in a minute. Dividends will continue to play an important role, adapted to the leverage and always compatible with growth. Thank you for your attention and let me hand over to José, InterCanal's Chief Financial and Sustainability Officer.

Thank you, Rafa. Good morning, everyone. Let me start by going deeper into our deleveraging and asset rotation plans for 2025 and share with you our thoughts on what our balance sheet capacity may imply for growth in 2026 and beyond. On slide 13, you can see the evolution of CAPEX and work in progress, that is, assets under construction or without any significant contribution, as well as our expectations for the current year. Work in progress has accumulated as we ramped up our CAPEX, peaking in 2023 at €2.9 billion, representing close to 70% of our gross debt at that time. At peak, McIntyre alone accounted for just over €1 billion of cumulative investment. In 2024, CAPEX started to moderate and so did Work in Progress, as we connected significant assets in the US and in Peru. In 2025, we expect similar levels of capex as in 2024, at around 1.5 billion euros, but work in progress at year-end 2025 should be less than half, falling below 1 billion euros. Macintyre will be at full or near full operation, as well as other important assets such as Forty Mile, Juna in India, Logrosan, Cotoperi and Ayora. All in all, around 2 gigawatts of capacity to be connected this year, as Rafael mentioned. The EBDA embedded in the work in progress as at the end of 2024 is approximately 175 million euros. In terms of CAPEX for 2026, committed CAPEX today represents around half a billion euros. This will grow obviously as we FID additional projects during the year, although we retain the ability to modulate this CAPEX should we need to in order to meet our leverage targets. On the right-hand side of the slide, we have provided an approximation to cash flow for this two-year period, 2024 and 2025. We expect the business to generate an aggregate around €1.2 billion and invest around €3 billion during the period, €1.5 billion in each of the two years. In terms of remuneration to shareholders, dividends distributed in the period plus the tail of our buyback program completed in early 2024 add up to around 0.4 billion euros. Our target is to reduce debt to below 4.5 funds from Operation Net Leverage, consistent with our investment grade rating. That means we need to reduce debt by approximately 0.5 billion compared to 2024 levels. And for that, we need disposal proceeds toward the 3 billion euro mark on aggregate for 2024 and 2025, of which 1.3 billion euros have already been achieved. To reach this target, we have a significant pipeline of potential disposal transactions ongoing that provide us with sufficient headroom and flexibility to allow us to do so while maximizing value. This deal pipeline includes transactions in different stages of progress amounting to around four gigawatts of capacity and almost three times the proceeds we are targeting. As we have been saying all along, we only intend to transact on a portion of this pipeline and we'll be selecting those transactions with the best fit. Going into specifics, we're looking to sell one or more portfolios of a decent size of wind assets in Spain, potentially complemented with the rest of the hydro assets we own. In LATAM, we're considering sales of specific generation assets in markets like Mexico, Peru, Costa Rica, and we're exploring the potential sale of our entire platform in Chile with one gigawatt of installed capacity. In the US, we're working to monetize a significant part of our recently commissioned 1.3 gigawatts of solar PV assets. And I would also like to mention the potential sale of our interest in two operating South African assets in order to recycle capital for new investments in the country that we expect to undertake in the near future. All in all, we continue to see strong investor appetite for renewable assets across our main regions, particularly for those that are differentiated in terms of quality and maintenance track record. We therefore remain confident in our ability to deliver on the targets we have set for 2025. Moving to slide 15, I would like to provide you with an indication of what our balance sheet may be able to absorb in terms of growth on a run rate basis. These indications are by no means growth targets, but rather plausible scenarios of investment combined with asset rotation in the context of current capex costs, interest rate, capture generation prices, and the limitations of our investment grade ratings. Our main constraint is not lack of profitable investment opportunities, but rather our balance sheet capacity. We continue to see gross capacity additions of 1.25 to 1.5 gigawatts per annum as a reasonable scenario. This magnitude of investment would need to be combined with healthy levels of asset rotation in the order of 600 to 800 megawatts per annum, which would allow us to maintain a strong balance sheet while reinvesting our free cash flow and paying a dividend. As a result, net debt would grow only marginally in the next few years. This would set our medium-term balance sheet capacity at around 700 megawatts, net new megawatts per annum in the current market context. While our aim is not to deviate too much from stable credit ratios, our actual growth path may not follow this exact trajectory. If we see good opportunities to grow faster, and assuming we can also increase the pace of asset rotations accordingly, we may choose to do so. We believe that this level of flexibility is desirable in the current market environment. Before moving into a brief review of our full year 2024 financials, I would like to provide our outlook for 2025. Starting with EBDA from operations, we're expecting around €1 billion. This would imply a flattish EBDA from operations on a like-for-like basis before the effect of the hydro assets that we have sold in 2024. We expect lower EBITDA in Spain due to the roll-off of hedges at high prices booked in 2023 that we enjoyed in 2024. But on the positive side, some improvement in underlying output following a poor year last year. And significant contribution from new assets, which could be in the 100 to 150 million euro range in terms of delta year on year. The impact from the exit of the hydro assets could be around 70 million euros, and we could see an additional impact on EBDA from operations from disposals as we progress with our asset rotation program during the year, depending on timing and structure of those transactions. In terms of EBDA from asset rotation, we have secured around 425 million euros from the hydro deal completed a couple of days ago, and we would aim to increase that towards the 750 million euro mark. On the slide, we provided indications and volumes and captured prices underlying this EPTA outlook. With respect to investment and debt, as discussed, we expect to add around one gigawatt of new capacity and net investment of 1.5 billion euros. Asset rotation, we aim at 1.5 to 1.7 billion euros. Over and above, the two hydro disposals already closed, resulting in net debt at year end in the vicinity of 3.5 billion euros. Over the medium term, we target mid-single-digit growth in EBITDA from operations. Let me now move to the slide summarizing full year 2024 results, which in the interest of time, I will try to cover quite swiftly. On slide 18, you can find the key financial and operating figures. Revenues fell by 14% to just over 3 billion, primarily due to lower prices, power prices. Generation revenues, the main driver of EVA from operations, correspond to 1.6 billion euros, down 12% as a result of the average captured price declining by 20% to 68.7 euros per megawatt hour, while consolidated production increased by 11% to 23.8 terawatt hours. The supply activity and other energy businesses of the group reported €1.4 billion of revenues relative to €1.7 billion in 2023. Total EBITDA fell by 13% to €1,123 million, with EBITDA from operations at €1.05 billion and EBITDA from asset rotation at €73 million. Net profit amounted to €357 million, down 32%, and the P&L in 2024 includes a €154 million reversal of impairments, which are part of the positive results delivered by the two hydro-acid rotation deals, as well as an impairment of €32 million related to the Taivilla wind farm, which is being dismantled for repowering. In 2023, the P&L also included a €132 million one-off of capital gains arising from the acquisition of Renomar and the Moda PV plant in Portugal. Net investment cash flow amounted to €1.2 billion net of proceeds from master rotation, and that is approximately half of the investment we committed or we did in 2023. Net debt stood at 4.1 billion euros, and if the Endesa transaction had closed at year-end rather than two days ago, net debt would have come in closer to the 3.5 billion euro mark. Moving to slide 19, here you can find details around our ESG performance. On the environmental side, 100% of CAPEX was aligned with EU taxonomy. Our Scope 1 and 2 emissions grew, although our emissions remain well below our SPTI targets and our emission intensity remains low. We reduced Scope 2 emissions by 73% as we now consume 99% of our electricity needs from renewable sources. Additionally, we recycle 98% of the waste we generate through different circularity initiatives, such as innovation projects to reuse wind blade materials. On the social front, while we reduced our accident frequency index, we are sad to have to report three fatalities among our subcontractors' employees. We are launching a health and safety action plan to further reinforce the safety culture across all of our operations and our subcontractors' operations. And finally, on the governance area, I would like to highlight the auditing of 100% of our strategic suppliers, that is 131 audits conducted in total. Going straight to slide 21, where we show the cash flow and evolution of net debt. In summary, operating cash flow amounted to around 800 million euros. Working capital was negative at almost 130 million euros due to the Spanish regulatory banding mechanism, higher volumes in the SME supply business, and receivables from new assets in operations. As discussed, net investment cash flow amounted to 1.2 billion euros, with around 300 million of proceeds from disposals and 1.5 billion euros of net capex. Other noteworthy financing cash flow items include the dividend distribution attributable to 2023 results, as well as the tail end of our share buyback program, which combined to an amount of approximately 250 million euros of shareholder remuneration during the year. Other items include around 400 million euros of perimeter changes linked to the debt related to assets classified as held for sale, primarily the hydro assets we sold to Endesa a couple of days ago. On slide 22, we see the drivers of Spanish generation revenues with consolidated output increasing by 10% to 11.1 terawatt hours. thanks to very good hydro output and the contribution from new assets. It is worth noting that 80% of production was contracted or regulated. The average captured price stood at 76.9 euros per megawatt hour, declining by around 29.5% as a result of normalizing pool prices and the roll-off of hedges, which tend to lag the market by around one year. These hedges contributed positively to improving our captured price, by around €10 per MWh in 2024, but this pickup was more than double the year before. All-in-all generation revenues in Spain fell by 23% to €855 million. On slide 23, EBITDA from operations fell to €443 million due to the lower generation revenues as power prices normalized. The increase in output contributed positively, but not enough to offset the decline in the average captured price. EBTA from asset rotation arising from the 175 megawatt hydro perimeter sold to ELAO in November amounted to 61 million euros, bringing total EBTA in Spain to 504 million euros. On 24, consolidated output in the international fleet grew by 12% to 12.7 terawatt hours. New assets contributed two terawatt hours of incremental output, but we had poor production in many of our locations, particularly in Mexico, with like-for-like production declining by 6% relatively to a 2023 that was not particularly good either. The average price was 61.6 euros per megawatt hour relative to 66.1 euros per megawatt hour the previous year. Average prices declined in the US, with lower achieved prices in wind, as well as the effect of early merchant generation from solar PV capacity during the summer of 2023, which provided a meaningful uplift during that year. In Chile, the average captured price increased significantly thanks to the recognition of tariff deficit revenues from previous periods, the so-called PEC tariff. Generation revenues increased by 5% to 782 million euros. EBITDA in the international business increased by 13% to 619 million euros, including 12 million from the disposal of a development project in Chile and our stake in a Hungarian wind asset. With that, let me hand it back to our chairman. Thank you.