Acciona Sa

Good morning, ladies and gentlemen, and welcome to the presentation of Accionas and Accion Energias' first half results of 2025. I will begin with a brief overview of our performance in our renewable energy subsidiary, Accionergia, and then move on to the rest of the businesses and the consolidated results. As a brief introduction, let me say that despite recent significant opposition, global climate action has finally gained irreversible momentum. Although progress is probably not as fast as it should be, The transformation is underway, and for the first time we're seeing hard evidence that the global emissions curve is starting to bend. If current trends hold, 2025 may be remembered as the first year of decline in global greenhouse emissions, mostly driven by major economies like Europe. and China implementing structural emission reductions through the growth of clean energy mainly. Renewable energy is not only the cleanest, but the cheapest, about 30 to 60 percent cheaper, most flexible, most scalable, most independent, and quickest option to implement. In fact, in the past year, 90% of global capacity installed came from renewable sources. But more so, this transformation could be exponentially accelerated by a surge of new cheap battery storage capacity. Admittedly, in the short term, the uncertainty and volatility triggered by import tariffs imposed by the U.S. administration led Acción Energía to temporarily put on hold some of its near-term growth plans in the U.S., which namely were the construction of two storage projects in Texas. As challenges arise, They demand flexibility and the ability to adapt. We are being particularly prudent in the current environment with respect to short-term CAPEX commitments, although remain upbeat about the outlook for the renewable energy market and our ability to grow profitably while extracting value from asset rotations. With respect to the financial performance during the first half of 2025, Acciona Energia posted results broadly aligned with our full year expectations, albeit with a different mix of prices and output relative to our initial forecasts. We reaffirm our guidance of approximately 1 billion 2025 EBITDA from operations and 500 to 750 million EBITDA from asset rotation, as communicated to the market at the end of February. In terms of new capacity, we will add about 600 new megawatts once we adjust for the postponement of the mentioned Texas battery project. This is consistent with our flexible approach to growth and our strategy of reducing leverage during 2025, following two years of peak levels of capacity additions close to 2 gigawatts a year. Another crucial element of our strategy is asset rotation. Since the launch of this strategy last year, market appetite has been strong and despite our ambitious targets, around 3 billion in total proceeds for the period 2024-25, with about two-thirds of the objective already completed or secured, we are confident that we will meet our goals. We are pleased with the progress so far in terms of volume of transactions completed or signed. which about $2 billion and capital gains of about $0.9 billion, driven by asset valuation significantly above those implicit in ACCIONA's share price. We have an additional set of asset rotation transactions in advanced stage of negotiations worldwide. of which we would only need to execute a portion to meet our targets. This allows us to be selective. We remain confident in being able to deliver additional transactions for a value of $750 to up to $1 billion before the end of the year. Turning to the non-energy-related group results, we are pleased to report a strong performance in all businesses in the first half of the year, particularly in infrastructure and Nordics. Infrastructure growth remains anchored in concession scale-up. and complex project leadership delivering an outstanding set of half results mostly driven by strong performance across our core markets. We secure major transmission line projects including Central West Orana in Australia and APM3 in Peru. In the United States, we continue to make solid progress on key projects such as the I-10 or the SR-400 highways. Similarly, in Line 6 in Sao Paulo, the Sao Paulo Metro, we are progressing adequately and successfully. In the water sector, we strengthened our presence in Australia with the collaborative contract of the Airy Peninsula Designation Plant. In Brazil, we signed – always in water – we signed a concession contract where we were awarded two wastewater public-private partnership contracts, further reinforcing our position in the region. Additionally, we entered the UK market through a collaborative contract for the upgrade and renovation of the Copper Mills Water Treatment Works in London, which is its main potable water supply facility. Nordex consolidates its momentum, progressing across service and margin recovery, retaining its position as the second largest non-Chinese player in the world. First half of the year, delivered a total of 4.5 gigawatts of new orders, mainly from Germany, Turkey, and Finland, and stable pricing continued. reflecting the strength of the business model and the strategic direction taken. Full-year targets were also confirmed. Bestenberg delivered a 7% year-on-year growth in assets under management and continued delivering on the alternative asset portfolio with the closing and listing of the real estate fund reaching its target of $150 million. In summary, we are making solid progress across our various infrastructure solutions, reinforcing our global platform that now comprises about 15 gigawatts of renewable assets. 1.9 billion of gross asset value in real estate assets, 19 billion in construction backlog, and a growing portfolio of concessions in transport, water, and grids, with about 3 billion of equity invested or committed. Let me now hand over to the rest of the team for more details. Thank you. Arantxa Espeleta, CEO of Accionergia.

Thank you, José Manuel, and good morning, everyone. At the beginning of 2025, we set ourselves several priorities, given the ongoing changes in the renewable energy landscape, the need to protect our credit ratings in the context of unprecedented levels of capacity additions in CAPEX in the recent years, and the growing divergence between private and public market valuations, with renewable energy stocks significantly out of favor in the stock markets. The priorities we set were consistent with the early abandonment of fixed annual growth targets in favour of a more flexible and selective growth model and a new asset rotation strategy that we see as an efficient source of capital to fund our growth. With respect to CAPEX, we wanted to bend the curve further. In 2025, there is still significant inertia and we moved some of the committed investment from 2024 to 2025. Our initial capex estimate for the year was 1.5 billion euros, and we are now implementing several actions to cut our capex further. In terms of work-in-progress reduction, last year we added around 2 gigawatts of capacity, and this year we need to connect these megawatts so that they start generating EVDA, and we cut the large amount of work-in-progress that we have been accumulating in the last few years as our growth accelerated. During the first half of the year, we have put in service around half of our target, and although some projects like McIntyre are slower to come through, we're making progress and confident of achieving our year-end targets. Our current work in progress amounts to around €2.3 billion, with McIntyre representing just over €1 billion. We expect that by year-end, total work in progress will fall to around €0.9 billion. Moving to asset rotation, as José Manuel said, we have secured 2 billion worth of disposal since the start of our asset rotation strategy last year. Our objectives for 2025 were very ambitious with 1.5 to 1.7 billion incremental transactions. Over and above the 1 billion deal with Endesa announced last year and closed in February this year. We have two additional transactions since then, which I will cover in some detail further down in the presentation. These transactions secure close to half of our target for the year and deliver good value to our shareholders. In Peru, we recycle capital as we are constructing a new project and considering another development project. In Spain, we are balancing out our footprint in favor of lower concentration. In terms of CAPEX, we are being particularly careful with additional CAPEX commitments for 2026. In today's volatile global context, we prefer to retain ample financial flexibility with only €0.3 billion or so strictly committed currently. All in all, I think we are making good progress towards our €3.5 billion debt goal at the year-end and preparing the company for the next phase. Let me get into a little bit more detail on some of the key topics. Our asset disposal program for the period 24-25 aimed at generating proceed and debt reduction in the order of 3 billion, roughly offsetting the investment during the period that marks the tail end of the peak CAPEX phase. For that, we have been working on potential transactions that represented up to four gigawatts of capacity across different geographies and technologies. As you know, today we have completed the disposal on two portfolios of hydro assets in Spain worth 1.3 billion at multiples of around 1.6 million euros per megawatt. The deal announced yesterday, together with the recently agreed disposal of the 136 MW San Juan de Marcona wind farm in Peru, brings additional debt reduction to the tune of 750 million euros and brings total crystallized ore secure proceeds to 2 billion euros in total since we started the new strategy last year. The transaction in Peru implies multiples of around 1.7 million euros per megawatt and will generate a moderate capital gain for this brand new plant. We are selling to Lu Del Sur, a Peruvian utility, subsidiary of China Free Coaches. The deal announced yesterday involves the agreement with OPD Energy for the sale of a Spanish wind portfolio amounting to 440 MW for a total consideration of approximately 530 million euros. This disposal is subject to competition and foreign direct investment approval and is expected to close in the second half of the year. We estimate a result of around 190 million euros, which together with the 443 million euros of EBITDA front rotation in the first half of the year, brings us within our 500 to 750 million euros target range for the year. The wind portfolio has an average of eight of 15 years and estimated output of one terawatt hour per annum. We have additional transactions of significance in relatively advanced states of negotiation and expect more activity in coming months. We are confident in the delivery of our targets for the year. In a slide A, we show the capacity additions to the first half of the year. We have installed close to 450 MW related to projects that go from Yuna PV in India, Aldoga PV in Australia, 40 Mile Wind Farm in Canada, the Logrosan Biomass Plant, and the Taidea Wind Farm Repowering in Spain. During the second half of 2025, we expect to complete the construction of Yuna and the Taibilia repowering and start adding capacity in Calayan 2 wind farm in the Philippines and in the Pedro Corto PV plant in the Dominican Republic, reaching a total of 600 MW of new capacity during the year, evidencing the moderation in new installations relative to the previous two years of around 1.8 year-wards on average. Our initial target was to install around one gigawatt of capacity in 2025, but we decided to put on hold the start of construction of two battery storage projects in the U.S., as we will see in a moment. The year is even busier in terms of bringing up to speed more than two gigawatts of capacity recently installed or acquired. We have placed in service around half of our target, including portions of Aldoga, Yuna, and McIntyre. The energy contributed by these new projects in its ramp-up phase is lower than planned due to some delays, technical incidents and bad weather, but we are expecting limited incremental deviations in the second half, with Aldoga, which is running significantly ahead of schedule, broadly offsetting shortfalls in the rest of the new portfolio. With respect to the McIntyre complex, our largest wind farm project ever with 923 megawatts, we are running a few months behind the schedule in terms of energisation, but we have an action plan in place with the objective to reach full commercial operation by year end. The McIntyre energisation was always going to be challenging given the size of the project and the tough grid compliance requirements in Australia. We are pleased that the wind farm has successfully completed the first two out of six hole points, with the project receiving the go-ahead to initiate the hole point number three, which includes starting to generate with Mackintosh South. We have currently 81 turbines of 5.7 megawatts each generating electricity. Hole point three tests have already started, and the process is likely to take around two months. Once it is completed, we expect the following hole points to be faster. In slide 9, I wanted to put into perspective our efforts to moderate new capacity additions in 2025 and 2026, following the extraordinary growth in 2023 and 2024. Following the decision to put on pause the two US storage projects, our expectation is to install around 600 megawatts in it of 2025 and 2026. In 2026, we will be at incapacity in the Philippines, Peru, South Africa, Croatia, and marginally in Spain. Our CAPEX expectation for next year on a very preliminary estimate stands around 700 million euros, and we are being particularly careful about undertaking further CAPEX commitments and retaining as much financial flexibility as possible. We will continue to maintain and enhance our pipeline to fuel profitable growth opportunities beyond 2026 to the tune of 1.25 to 1.5 gigawatts per annum. We currently estimate our medium term balance sheet capacity consistent with investment grade ratings at around 700 megawatts. So the plan is to maximize growth in projects that meet our return objectives with asset rotation in a systematic basis. With respect to the U.S. market, we wanted to comment on recent developments. On the one hand, the ongoing trade wars make it hard to make investment decisions in the U.S. in the short term, and this is precisely why we had to halt our battery projects that were expected to be fully constructed by year end. Even the steep fall in battery storage container prices, our projects have the capacity to absorb higher tariffs, but with this volatility, it's impossible to know where you stand. Moreover, complex new rules on tax credit eligibility of the renewable energy projects that make significant use of Chinese equipment models the picture even further. With respect to the Treasury's one big beautiful bill act, The picture is clearer now. Tax credits for wind and solar are being phased out over the next 12 months or so. But on the positive side, tax credit for our safe hardware projects with start construction by end of 2024 are unaffected. The sprays will need to be put in service by the end of 2028, as it was the case before. There is also the opportunity to safe harbor additional wind and solar projects to meet the start of construction requirements by 4 July 2026. Tax credit transferability, which has proven to be a useful alternative to tax equity structures, also remains in place. Finally, battery projects come out better, with full tax credit eligibility if construction starts before the year end of 2033, and there is a phase-out schedule in the following years. Some uncertainty remains, however, about the beginning of construction milestones, as the Treasury has been asked to issue new and revised guidance. When we combine the trade wars with the one big beautiful deal, our conclusions are firstly that there is going to be an increase in the cost of capital and the cost of new oil for the new oil energy place in the US. All of these tariffs and uncertainties on the value chain from procurement, permitting, safe harbouring and use of Chinese equipment rules will take its toll on safe harbour projects and new projects. We expect a rush to get projects under construction by July 2026 to benefit from safe harbor. And for projects beyond that, the picture remains unclear. There is a need for new-build generation in the U.S., driven by trends such as reshoring of industrial production and artificial intelligence, and thermal generation is unlikely to come in time to meet that demand. New nuclear appears to have limited prospects before 2030 as well. All in all, existing operating capacity may benefit from lower levels of new build and higher prices. As for our U.S. growth plans, we retain 1.2 years worth of safe harbor projects and we'll be looking to crystallize that value, whether by constructing and operating ourselves or monetizing the developments as visibility improves and the market readjusts to the new landscape. Thank you. And now over to José Ángel Tejero.

Thank you, Arantxa. Moving to our infrastructure business, concessions have become a cornerstone of our growth model. This slide captures the scale and momentum that we have built in this area. Starting with the backlog, we have reached an all-time of $58 billion, representing a 7% increase versus December 2024. If we include projects where we are preferred bidder, such as the SL400 that will be signed in the coming weeks, this figure rises to $126 billion. In the last five years, we have secured 25 new concession contracts, reinforcing our leadership in this space, and reflecting not only our strong execution capabilities, but also the trust placed in us by public and private partners globally. Looking ahead to 2032, we are targeting 3 billion in equity invested in concessions, and what is particularly compelling is the weighted average life of these assets, which are 52 years, which provides long-term visibility and stability of our cash flows. Over the life of these projects, we will generate $58 billion in dividends and cash distributions for Acciona. Finally, our approach remains flexible with regards to asset rotation. We will evaluate asset sales opportunities to optimize capital allocation and unlock value, while maintaining a robust pipeline of high-quality, long-duration infrastructure assets. Moving to Nordex, it stands as a key strategic asset in our portfolio. It is not just growing in volume, it is evolving into a more profitable, resilient and strategically integrated company within the Acciona Group. In the first half of 2025, Nordex recorded 4.5 gigawatts of order intake, representing a 33.8% year-on-year increase. This is a clear signal of market confidence in our technology, execution capabilities and the growing demand for clean energy solutions. Nordex backlog now stands at 14.3 billion, up 12.1% since December 2024, providing strong visibility and stability for future revenues. Within this backlog, services have a strong 5.5 billion, a 10% increase year-on-year, reinforcing the strength of our long-term customer relationships and recurring revenue streams. In terms of profitability, Nordex has reported a 5.7% EBITDA margin this semester and is making a solid progress towards the 8% strategic EBITDA margin target. Operational efficiencies, discipline, cost control, and a more favorable product mix are all contributing to this trajectory. Therefore, we believe that Nordics is exceptionally well positioned to capture the next wave of growth in the global energy transition. I'd like to highlight two key areas of strategic focus beyond our core infrastructure and energy operations, which are best in bear and living. Starting with best in bear, our asset management arm, we are actively leveraging our action origination and development capabilities to scale up our alternative investment funds. This is a deliberate move to diversify our portfolio and enhance long-term value creation. Our goal is to significantly increase the share of alternative assets under management from the current 10% to around 20% in the coming years. And at the same time, we remain fully committed to continuing delivering high and consistent long-term returns through our traditional funds. And turning to living, our property development business, we are optimizing our land bank by investing all their stock that does not have a short-term development potential. This allows us to focus our capital and resources on high-margin, high-impact projects. Our strategy is centered on margin maximization, driven by the strength of ACCIONA's unique product and our exceptional development team. We are also making strategic investments in singular income-generating properties that align with our long-term vision. Together, these initiatives reflect our broader commitment to sustainable growth, capital efficiency and value creation across all businesses. And now let me hand it over to José to present the financial results of the group.