Iberdrola Sa S/Adr

Buenos dias, señoras y señores. Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2024 fiscal year results presentation. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period given by the top executive team that usually is with us. Mr. Ignacio Galán, Executive Chairman, Mr. Armando Martínez, CEO, and finally, Mr. Pepe Sainz, CFO. Following this, we'll move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web, so please ask your question only through our webpage, www.iberdrola.com. Finally, as today is a very busy day for all of you, given the many companies reporting results this morning, we expect that our event will not last more than 60 to 70 minutes. If any questions remain unanswered, we at IR are, as always, fully at your disposal. Hoping that this presentation will be useful and informative for all of you, now, with further ado, I would like to give the floor to Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.

Thank you very much, Ignacio, and good morning, everyone, and thank you, everyone, for joining us today. We are today presenting the result of an extraordinary year. Driven by our ordinary operations with a strong performance across all our business and geographies, but also due to the extraordinary factors in 2024, we took a huge step in the execution of our strategy using the proceeds from the investment of thermal generation. to accelerate with these resources growth in networks in the U.K. with the electricity in the U.S. transaction and the U.S. where we acquire our green minorities. In addition, as a result of our customer-prudent accounting practices, we made 1.1 billion euros on non-cash adjustment and efficiency measures which offset the capital gains from the investment made and will enhance our future earnings. As a result, our reported net profit reached 5,712 million euros, up 17%. Reported EBITDA also increased by 70%, up to 16,148 million euros, driven by a new record in investment up to 17 billion euros of this total 12 billion euro organic investment. and 5 billion were the result of the two corporate transactions already mentioned in the U.S. and U.K. Operating cash flow reached 11,136 million euros, up 10% in recurring terms, allowing us to combine growth and financial strength with FAO-autoyasted net debt close to 23%. To secure this growth, last year we also made record purchase total in 7,153 million euros, more related to the investment that will mature in 2026, probably fewer than in 2027. All in all, this strong performance is leading the board to propose to the General Shareholders' Meeting a total dividend of 0.635 euros per share, up 15%. Moving to operating results, the 70% increase in EBITDA reflects our growth in all our business and geographies. Electricity production and custom benefit from 2,600 of additional renewable capacity, including more than 700 of offshore wind sold through a diversified portfolio or route to market, mainly CFDs and long-term PPAs with tier one companies like Meta, Microsoft, or Amazon. As well as the excellent performance of our pumping storage facilities, we generate almost six terabyte hours in market with growing intraday price spreads, as we predicated in our last Capital Market Day. Networks operating results reflect rate increases across all geographies. In a higher asset base, mostly in the U.S. and U.K., after 11 billion invested in the last 12 months, almost doubling last year's figures. Networks organic investment increased by 21% to 62 billion euros, of which almost 60% was allocated to distribution. Mainly in the U.S. were invested 1.5 billion, driven by New York rate case, and U.K. were invested 700 million. The remaining 40% correspond to transmission investment also due to the growth in the U.S. with more than $1 billion invested in New York and in ESC interconnection between Massachusetts and Canada. In the U.K., where investment reached $100 million mainly in Rio Chichu project and the Eastern Green Link subsea cable. Additionally, we allocated $5 billion to electricity in the West in avant-garde transactions as mentioned. All in all, our network-regulated asset base increased by 60 percent to 49 billion euros, with two-thirds in the U.K. and the U.S. U.K. RAP reached 15 billion, up 45 percent, given by the electricity and waste transaction and organic investment, followed by U.S. with 14 billion euros, Brazil with 10 billion, and Spain finally with 9 billion. Growth in the U.S. and the U.K. was also the main driver of renewable investment, which reached $5.4 billion with almost $2 billion allocated to offshore wind. U.S. investment increased by 37% to $1.5 billion, mainly in our binyard wind offshore wind farm, which is on track to be fully operational in 2025. Also in the U.S., we completed more than 750 megawatts of solar PV and made significant progress on the construction of 1,500 wind and solar megawatts, all of them with supply chains, tax credit, and PPS secures. Following this increased investment in 2024, we do not expect to start new renewable projects in the U.S. in 2025. In the UK, investment reached 1.2 billion, mainly in this Anglia II, and three offshore wind farms, which, as you know, obtained CFDs in last auction. We also invested 1.4 billion in Iberia, putting in service 1,000 new megawatts with 500 more under construction, mostly with partners and PPA secure. In addition, we completed 2 million kilowatt hours of pumping storage capacity at Santiago Jarez and Valparaiso projects. In Germany, we completed the Baltic Eagle offshore wind farm with 476 megawatt of installed capacity, and we continue investing in Windacker, which will add 350 megawatt to our portfolio next year. Finally, in Australia, we commissioned 145 megawatt wind capacity, and we have 375 more under construction. In total, as December, our balance sheet includes 9 billion euros in renewable projects and construction that will begin contributing to results in 2025 and 2026. To guarantee the delivery of this ongoing project and the access of supply chains for new investment in 2024, we made purchases worth 18 billion euros. More than 14 billion of these purchases relate to investment that will be made in 2025 and beyond, allowing us to secure 100% of strategic contracts for all our projects under construction in networks and renewables. mainly through framework agreements that give us full certainty on availability and prices with minimal financial commitments. In addition, 88% of the companies in our supply chains comply with all our sustainability criteria. We will continue increasing the share of local suppliers, covering now 82% of the total purchase. As a result, we expect virtually no impact for new tariffs in the U.S., given our focus on American supply chains and the protection clause included in our contracts. Finally, we are already working to secure supply chains for protects after 2036, given the strong demand in global markets, especially for networks in the U.S. and the U.K., In particular, in Britain, we have guaranteed access to purchase worth 6 billion euros monthly for transmission investment in the next regulated period we will start in 2026. As mentioned, the corporate transaction completed in 2024 had accelerated the delivery of our strategy. Expanding our present network business in the U.S. and the U.K., we thanks obtain from the investment our thermal generation assets and preserving our financial strength. After the acquisition of electricity in the West and avant-garde minorities, our combined net worth asset base in these two countries reached 30 billion euros, or 60% of our total regulated asset base. Enhancing our position ahead of a huge investment opportunities in transmission and distribution in the US and the UK that will exceed 41 billion euros by 2030 with around 52% in distribution and remaining 48% in transmission. In the U.S., the total network investment will reach €19 billion both in distribution in your main and Connecticut and in transmission mainly in the NCEC interconnection, a new project in Europe. On top of our ongoing investment, network investment in the U.K. will reach €22 billion by 2030, mainly in transmission multiplied last year's triggers by two times, by four times due to the Rio T3 and major projects like Eastern Green Link. Investments are also expected to grow significantly in distribution driven by Rio ED2 and ED3 frameworks. In addition, we will continue increasing our footprint in the U.S. and the U.K. through renewable projects already under construction, which will imply a total investment of €10 billion. Our sustained increase in cash flow generation will allow us to finance all this growth and preserve our financial strength. Even in the year record of investment in 2024, our FFO over net debt ratio remained in 23% thanks to a 51% rise in operating cash flow to 60.7 billion euros. Recurrent cash flow increased by 10% to €11,836 million, and we have €20 million of liquidity enough to cover 22 months of financial needs. The combination of sustainable growth and financial strength is leading the Board to propose a 15% increase in the dividend corresponding to the full year 2024 result, up to €0.635 per share. 50% above our dividend flow for the period and reaching 2026 estimated two years ahead of schedule. The proposed supplementary dividend to be paid in July will reach 0.404 euros per share on the top of 0.231 euros already paid three weeks ago. Also, in line with previous year, we expect to maintain our engagement dividend linked to attendance to AGM, which in 2024 amounted five euros per every thousand shares. And we continue to combine shareholder rumination with growing social dividend, creating industry and jobs, contributing to public finance, and promoting innovation and sustainability across the communities. In 2024, we incorporated 6,000 people in our workforce, including more than 2,100 from electricity to the Northwest. And we made 18 billion euros of purchases mentioned to 1,000 suppliers that employ 500,000 people. We also made a record tax contribution exceeding 10 billion euros for the first time in our history, driven by a 16% increase in taxes charged to our income statement. And our commitment to equal opportunities was recognized by the top employers and the H certificates. Regarding innovation, Iberdrola was nominated by the European Commission as a private utility with the highest investment research and development worldwide for the third consecutive year after dedicating more than 500 million euros for this effort in 2024. Finally, we continue minimizing our carbon footprint, reaching levels close to net zero. In Europe, our CO emission decreased once again to only 38 grams per kilowatt hour, which is five times less than European Union average. This commitment to social responsibility is being recognized by the most prestigious institutions. Recently, Standard & Poor's ranked Iberdrola as the top utility worldwide in its Dow Jones Basin Class Index, based on a wide range of social, environmental, governance, and ethics criteria. I will now hand over to our CFO, who will present the good financial results. Thank you.

Thank you, Chairman. Good morning to everybody. As the Chairman has outlined, 2024 results were strong, both in reported and adjusted terms, underpinning the underlying growth of the business. In reported terms, 2024 net profit reached 5.6 billion, growing 16%, and adjusted net profit was 82 million lower and grew 15.1% to 5,530 million. Net operating expenses, net positive adjustment, mainly capital gains from our thermal generation asset divestment, has been mostly compensated by other negative adjustments and efficiencies below the EBITDA level, mainly in onshore renewables in the U.S. Given the delay in developing the onshore pipeline, as we will have less renewable growth as we prioritize especially investments in networks and in repowering. As a consequence, both EBIT and net profit are slightly lower in adjusted terms versus reported terms. This is not new in Iberdrola's strategy, as we try to compensate for extraordinary positive results with efficiencies and adjustments that help the group continue growing on a recurrent basis in the following years. For example, last year, and to a lesser extent, we compensated in Brazil capital gains due to an exchange of assets with a cleanup of higher costs and delays in transmissions due to COVID that we are trying to recover in the future. For transparency purposes, you can see in the slide the reconciliation between reported and adjusted 24 figures in our P&L. Main difference between reported and adjusted figures at the BIDDA level is 1.6 billion euros, as net operating expenses include 1,745 million net capital gain, mainly as commented in thermal generation asset divestment, and other ones related to other minor transactions. In the U.S., gains of €77 million. In Brazil, losses of €51 million, as well as minus €111 million related efficiencies in Spain. This 1.6 billion difference is almost compensated at EBIT level, as DNA includes 1.5 billion negative adjustments and efficiencies mainly related to the U.S. onshore business and other renewables out of the U.S. due to the greater focus and networks and the expected delay in developing the pipeline mainly in the U.S. As a consequence, the difference between reported and adjusted EBIT is reduced to 132 million. At net profit level, the difference is just 82 million. Consider tax and other minorities' impact of adjustments. As a consequence, 24 adjusted net profit grew 15.1% to 5,530 million, slightly over our 5.5 billion euros last guidance update. In the annex, you will find an even more detailed reconciliation between reported and adjusted income statements. And now starting to go into the P&L analysis, a 20% improvement in procurement costs, mainly in energy production and client business, versus a much lower decrease in revenues, 9% only, thanks to our fixed price sales and the growth that comes from our network business, has driven a 2.5% increase in gross margin to 24 billion euros. As you can see in the slide, on reported basis, net operating expenses improved 27%. Net operating expenses, excluding capital gain impact, as explained in the previous slide, as well as other adjustments and efficiencies, improved 27%. 0.7%. Adjusted net personal expenses improved 2.6%, excluding Q4 efficiencies impact. Adjusted external services increased 3.5%, excluding expenses linked to the thermal generation asset divestments. Adjusted other operating income increased 12.8%, excluding the positive 1.7 billion impact from thermal generation asset divestment driven by recoveries and indemnities. Reported levies reached 2,567 million in 2024 versus 2,748 million in 2023, improving 7%, positively affected by sentences in Spain already accounted in our nine-month result, 79 million positive of the hydrocanon and 193 million for the social bonus. Excluding these court rulings, levies grew 3%, driven by the higher hydrocarbon, the 7% tax on Spanish production, and the nuclear waste tax and the windfall tax in the U.K. As you can see in this slide, Spain is by far the country where we pay the highest levies, 57% of the levies paid by the group worldwide. This, as mentioned previously, is the main reason why electricity in Spain is more costly than in other geographies. Analyzing the results of the different businesses and starting by networks, its EBITDA grew 7% to 6,423 million euros, driven by higher regulated asset base and tariffs. Brazil accounts for 33% of total EBITDA, followed by Spain, the UK and the US. But if we consider recent E&W transactions, the UK would have increased its weight to 28%. In Spain, EBITDA was 1,542 million euros, minus 0.7%, as our operating performance was in line with the three, but affected by negative impact of the regularization of past investments. In the UK, EBITDA increased 5.6% to 1,239 million pounds, with higher contribution in distribution thanks to the new ED2 framework and growing demand. There is also a partial recovery of a provision made in the Q3 of 23, a net operating level. 2024 does not include EBITDA contribution. In Spain, EBITDA grew 23%, improving the 18% rise in September to R12,157 million, with higher demand and higher tariffs in distribution and transmission, positively affected by a R2,148 million negative one-off in 2023 related to transmission. In the U.S., U.S. GAAP EBITDA increased 2% to $1,191 million, as there is an improvement in contribution from the new rate cases, mainly in New York, thanks to higher tariffs. IFRS EBITDA was 5% lower to $1,439 million. With higher contribution from rate cases, partially compensated a negative timing effect due to IFRS account and higher costs. The variation versus Q3 is due to a positive Q4 in 2023 due to the recognition in that quarter of higher tariffs in New York since May 23. Energy production and customers' business EBITDA reached €10,000.5 billion compared to the €8.6 billion last year, driven by divestments of thermal generation assets and better business performance. In adjusted terms, there is a 2% growth, despite the fact that there was a £341 million positive one-off in the UK last year. I want to point out that the business reached close to 84% emission-free generation in 24. In Iberia, EBITDA was 4.6 billion euros, 8% more due to the 4.7 terawatt hours higher manageable renewable production in 24, including pumping storage and lower procurement costs compensating lower prices. 90% of our production in Iberia was non-emitting. In the UK, EBITDA fell 15.7% to £1,530 million, affected by the £341 million positive one-off related to tariff deficit recovery in 2023, as I mentioned in the previous slide. Excluding that, EBITDA increased 3.8%, thanks to higher production and wind onshore and better prices. partially offset by higher windfall tax and £150 million negative operating issues in offshore already fixed. In the U.S., EBITDA increased 43% to $1,059 million, thanks to the positive performance of our flexible generation fleet and better prices that improved results with our renewable production increasing 3%. In addition, in Q4, there is a positive 92 million capital gain from the partial sale of Kitty Hawk, an offshore seabed. In the rest of the world, EBITDA grew 72% to 721 million euros, with 31% higher production due to the entry into operation of Sandbrook Wind Farm, at full capacity since May, and more onshore capacity installed in Poland, Greece and Australia. In Brazil, EBITDA decreased 30% to 1,318 million reais due to the capital loss of Baixo Iguazu's sale and lower thermal contribution. Finally, in Mexico, EBITDA reached 2.3 billion U.S. dollars, excluding the divestment. EBITDA reached 459 million dollars affected by the sale, and the consolidation of the assets sold from February 26th, but the remaining assets still contribute around half of what they did previously. Mexican business continued to use dollar as a functional currency. Reported DNA and provisions grew 31% to 7.1 billion euros, mainly due to already mentioned 1.5 billion provisions related to onshore renewable assets, mainly in the U.S. Excluding 1.5 billion adjustments, DNA provisions grew 3% to 5.6 billion euros. as adjusted provisions include $141 million, mainly due to lower bad debt provisions, while depreciation and amortizations grew 6.8% in line with our higher asset base in networks and renewables. EBIT reached 9,729 million euros and grew 8%. As you can see in the slide, 1.7 billion net capital gain, mainly thermal generation asset sale, has been almost compensated by 1.6 billion euros different adjustments mainly in the U.S. on shores and inefficiencies. As a consequence, adjusted EBIT grew 7% to 9.6 billion euros, 132 million below the reported EBIT. Net financial expenses improved €612 million to €1,575 million. Debt-related costs improved €60 million as a consequence of €55 million reduction due to lower cost of debt. Sixteen basis points. 57 million linked to FX, mainly the Brazil depreciation that compensates lower EBITDA in euros. Partially offset by a 52 million increase due to 0.2 billion higher average net debt. and non-debt-related results got better by 552 million, including 280 million linked to FX derivatives, that in 2024 are 90 million positive versus 120 million negative in 2023, mainly due to the divestment of thermal generation assets in Mexico compensated at tax level. It is important to point out that the thermal generation asset divestments was in dollars, but for tax purposes it was in pesos, so hedges were needed. And there is another 272 million positive due to capitalized interest, 163 million euros and one-offs, 67 million mainly due to court rulings. Our reported credit metrics remain strong, driven by higher FFO, compensated higher debt. Iberdola rating remains in the BBB plus BWA1 rating. Level also held by the improvement of our business profile with more regulated assets in countries with better ratings. 24 credit metrics were as follows. FFO adjusted net debt reached 22.9%. Our adjusted net debt to EBITDA remained in line with last year at 3.4 times, and our adjusted leverage ratio increased slightly to 41.4%. Our net debt has evolved from 47.8 billion at the end of 23 to 51.7 billion at the end of 24. As you can see in the slide, our 11.8 billion cash flow generation compensated gross investments and our 6 billion asset rotation funded non-organic investments. Let me also highlight that 24 net debt includes 15 billion of work in progress that it is not still contributing to cash flow generation in the plant, but it is the source of future growth. 24 reported net profit grew 17% to 5.6 billion euros compared to 4.8 billion reported net profit. In this slide, you can see net of taxes, how the net capital gains 1.1%. 1,184 million mainly thermal generation asset sale that was already in an account since September results has been almost compensated in the fourth quarter by 1.1 billion of efficiencies and adjustments already explained. As consequence, 24 adjusted net profit grew 15% to 5,530 million, only 82 million below reported net profit. Adjusted net profit in 24 is the base for 25 guidance, and is reported net profit excluding capital gains from asset rotation, adjustments, and efficiencies. Now the chairman will conclude the presentation. Thank you very much.

Thank you, Pepe. Last March, we presented our outlook for the coming years with a clear message. Electrification is unstoppable. Less than one year later, all the data confirms our vision. Electricity demand is accelerating, especially in Europe and U.S., where after years of decreasing demand consumption, it is now expected to grow at least in line with GDP. Driven by electrification of cooling and heating, transport, industry, and new demand sources like data centers, artificial intelligence, we will be more than offsetting energy efficiency improvements. In 2024, demand already grew by more than 2% in the U.S. and U.K., and this trend is set to continue in the coming years. But if we want electrification to reach its full potential, network infrastructure must be ready ahead of consumption. For this reason, most regulators are now recognizing the need to speed up network investment to serve the latent demand of electricity that homes and especially industries will be consuming today if they have access to sufficient grid capacity. In the U.S., transmission and distribution investment rose by 30% in 2024 compared with the average of the previous five years. In the U.K., the business plan sent to Ofgem by transmission operators show that the investment will need to multiply by three or four times from 26 to 31. Meeting this demand, we also require additional generation sources to provide competitive, local, and efficient electricity with the lowest price volatility. This is pushing most countries to choose zero-emission technologies. Last year, renewables covered 80% of new demand globally, with double-digit production increases in countries like the U.S. Rising renewable penetration is also increasing intraday price variability in most wholesale markets, making storage even more critical to preserve system stability and cover demand 24-7. For example, in the Iberian system, where last year average price stabilized at 63 euros megawatt-hour, hourly price spread rose by 75 percent compared to 2023 and has multiplied by three since 2020. In this context, we have accelerated our plan to maximize our competitive advantage and capture growth opportunities, especially in network business. Accordingly, in 2024, we reached 49 billion euros regulated asset base with 60% in U.S. and U.K. and huge prospect of both countries. In renewables, our first mover position across markets allow us to be highly selective with new investment assets and the construction already guarantee our growth over the coming years. All new projects are progressing well with supply chains and route to market secure, mostly through PPS or CFDs. In terms of geographies and areas, the UK and US remain at the core of our growth strategy. Larger investment in this market reached 12 billion euros, 70% of our total investment, mostly in networks, bringing the share of our global regulated asset base over 60%. This improvement in our business profile is already driven additional growth in 2025. will benefit from increasing organic investment and better framework in all markets, plus 3.5 billion euros of regulated asset base from electricity in the West, and 100% contribution from avant-garde in terms of net profit. In electricity production and customer, we have 2,600 of additional capacity and 22 million kilowatt hours of new storage, including the full commission of the Tameka hydropower plant. In addition, The efficiency measures implemented in the last quarter, in 2024, will start delivering their first positive impact in 2025. We will continue with our active management of financial expenses, and we have already secured better exchange rates. As a result, in 2025, we expect mid-to-high single-digit growth in net profit, excluding capital gains from asset rotation, well above 5.3 to 5.4 billion estimated last March. In fact, we already exceed these figures in 2024, reaching already levels close to our estimates for 2026. And we see a clear consolidation of these growth trends in the coming years, driven a structural improvement of our long-term outlook. In 2026, we expect higher rates in place to a larger network asset base across all countries. An operating result will reflect the full consolidation of electricity in the U.S. and the U.K. In addition, the contribution of major transmission projects will continue rising, given the progress in NCEC in the U.S., a new asset under construction in the U.K. and Brazil. In renewables, we will benefit from an additional offshore wind capacity from Windacker in Germany, Binger Wind One in the U.S., and Sangler 3 in the U.K., and from continuous improvement in market fundamentals driven by electrification. To conclude, our revolution in 2024 and the underlying trends in all of our markets confirm our vision. Every major invention of technological revolution in the first 21st century were electrical, including electric vehicles, heat pumps, digitalization, artificial intelligence. All these are powered by electricity, making this electrification unstoppable. In fact, the countries that are achieving a higher share of electricity than total energy demand are improving their competitiveness and registering higher growth rates. Over the last several years, this demand growth has been faster than the build-out of new network infrastructure, creating a latent demand that requires upgrades in transmission and distribution grids urgently. And the age of the electrification has just begun, accelerating the need for great investment to cover new demand, integrate renewables, improve resiliency, and promote digitalization. Of course, meeting this new consensus, we also require more clean and reliable energy sources, as well as storage facilities to preserve the existing flexibility. Governments across the world are recognizing all this by promoting additional investment to improve energy security and autonomy, competitiveness, and decarbonization. And thanks to our vision and execution, we are in the best position to capture all these opportunities across the geographies and regions we serve. We will give you detailed information about our growth prospect in our capital market day in September 2024 this year. Of course, in the meantime, every quarter we will continue to update you in our progress. Thank you very much for your attention, and we're now more than ready to answer all your questions.

The following financial professionals have asked the question that we are going to answer in the following. First, Fernando Lafuente, Alantra, Make a Becker, HSBC, Gonzalo Sánchez Bordona, UBS, Rob Puley, Morgan Stanley, Peter Vistiga, Bank of America, Pedro Alves, CaixaBank, Fernando García, Royal Bank of Canada, Jorge Alonso, Societe General, Javier Suárez, Mediobanca, Jose Ruiz Barclays, James Brand, Deutsche Bank, and finally Manuel Palomo, Exxon BNP. The first question is related to there are a few analysts asking the following. How does the company's full year 2024 results compare to the guidance?

So, thank you very much. I think guidance provide for 2024 always, as we said, for 2025 as well, was excluding extraordinary results. So, what I said is full year results are slightly better than our guidance. Adjusted net profit was $5,130 million, growing 15%. And our reported net profit includes $1.1 billion of capital gains, almost fully offset as Pepe has already explained. By non-cash adjustment, the Google hates our future earnings and always do.

Next question is, can you provide, please, more color on the non-cash adjustment? Which factors have driven the adjustment in the renewable business? How does this affect future investments?

Pepe?

Yeah, well, basically, the thing is that due to the fact, as I have commented, that we are going to dedicate more investments to networks and be more selective in renewables, Obviously, in the valuation of that assets, especially in renewables, we value less the pipeline, especially in the U.S., because in the U.S., as we mentioned, we prefer to concentrate in networks. Obviously, that lower valuation of the pipeline is what drives the adjustments that we have commented on. most of the 1.6 billion adjustments. So basically it's the valuation of the pipeline because we're mainly in the U.S., although there are some other adjustments that we are doing in onshore, in other smaller adjustments in other geographies, but it's basically... The driver is that we expect to develop the pipeline in a much longer time. So that means that the pipeline has less value for us today. And that is because, as I was mentioning, and as the chairman has mentioned, because we prefer to concentrate our investments in networks and to be more selective in renewables.

Well, I think just to add, as I mentioned before, I think we always have already a system, prudent system, and our rule is to provide a stable growth trend and to avoid already future surprises, negative or positive. So always we is the... The history of the company has been based in this prudent approach and not to celebrate extraordinary things, but to keep all these extraordinary things for improving our future results as always we did.

Next is regarding to 2025. What drivers are expected to influence the company's meet to high single-digit growth guidance for 2025? which is the base for the growth calculation, and how will AvantGrid, 100% of Avonit, obviously, and ENWU contribute?

So, as I explained in my speech, I think it's 20-25 gallons, so this mid-to-high single is based in the adjusted net profit of 5,530 million. Based in various things. First, organic investment in transmission and distribution. So, as I mentioned already, mainly U.S. and U.K., which are already coming into service. Increasing our RAP as well in all countries because of our investment and with better tariffs in some cases, which are already – we have three cases which are already being implemented – during 2025. There are as well 2,600 new megawatts of renewables, and I think it's a full contribution of electricity in the West and avant-garde, which is 100%. So, but perhaps, Pepe, you can already give exactly which are the numbers of these avant-garde and UWU that we are expecting.

We are expecting that both of them will contribute, the sum of both of them will contribute somewhere between 100 and 200 million euros for 2025. Both companies, E&W, will contribute 12 months versus two months last year. And obviously, AvantGrid, the acquisition of the minorities, will also add. So I think we think that 150 to 100 million could come from these two deals.

The community is also asking what will be the expected net profit level for 2026, taking into account the slide.

Well, I thought the net already, I tried to clarify that one in my comment, but I think I will insist again. So I think it's mainly due to our network business in US and UK, as well as the completion of the project and the construction. I think we mentioned that we have 15 billion euros in this moment of working process that is not providing results and I think most of them are going to be completed during this period so I think we have already the distribution in our countries will contribute more because we have more regulated base There are new projects which will be completed during this year, which is NCEC in the U.S. and some one in the U.K. and Brazil as well, the transmission we are already in construction. And offshore is Anglia 3 will be completed during next year. Bindaker will be completed this year. And Binyarwing will be completed by the end of 2025. So, and I think, as Pepe mentioned, we have the full contribution of electricity in the West, which this year we will contribute partially only because we are expecting the final approval of CMA, we are expecting soon, but I think a few months will not be contributing. In any case, I think, as always, in our Capital Market Day on the 24th of September, we'll provide you a very detailed, all these things, and I hope they will be as well as good as we are expecting.

Next question is related to the guidance of net debt at the end of 2025 and the main drivers of factors that are influencing these figures.

Thank you. Yeah, well, we are expecting to end the year with adjusted net debt somewhere between 55 and 56 billion euros. Basically, apart from the, obviously, the traditional investment plan, you know, and that we always have. This year, you know, what is going to change is the ENW consolidation. That could add around 2.5, 2.6 billion euros of new debt when we consolidate the ENW. And it will add also the FFO, okay? So it will consolidate it, but we will consolidate the FFO, which we are right now not consolidating. To compensate that, you know, we are right now with two or three initiatives of asset rotation that we hope to complete soon. through the year we might see depending on when we consolidate ENW that we might have a peak in depth in the first half but obviously if we finalize these two or three initiatives that we are expecting that will compensate But in the end of the year, as I was saying, 55 to 56 billion euros of debt. And the FFO over net debt will be more or less stable compared to this year. So we are expecting that by the end of the year, the FFO over net debt will be in line with the FFO over net debt of this year.

Next question is related to the European Union and is about the recent Clean Industrial Deal and the Affordable Energy Plan. What is your view on the subject?

So I think first thing, we are positive on the document. I think it's a good initiative. I think it's a deep analysis how to improve the European competitivity. I think most of our recommendations are included in terms of clear market orientation, promoting long-term contracts, PPS, DFDS, etc., It's a strong message on reduction of taxes and charges. You know, I've been for many years insisting on this to compare the taxes and charges we have in Europe compared with Americans, which is much, much higher. And the need to increase network investment. I think I've already spoken enough about networks needed, and I think that is one more document which are encouraging to invest more in networks to already provide electricity demand, which now is waiting for this grid. But I'm positive on it.

Next question is about how President Trump administration may affect your plans in the U.S. in the future and also the impact it may have on your ongoing renewables projects.

So we are more than 20 years in the United States. We have in this country almost more than $40 billion in assets. We are present in 24 states. We have the distribution networks in New York, Connecticut, Maine, Massachusetts. We have seven, almost 10 million Americans. We have increased investment history in these 20 years. We have increased investment in law administration. to reach the levered asset because of the investment we've been making, including during the previous Trump administration that we continue investing in increasing our asset base. I'm sure that we will work well with the new one. In fact, in the change of administration, we have already committed around $4 billion to this country, a capital increase to avant-garde plus facilities, liquidity facilities to avant-garde as well. I think there's something certain. The demand in the United States continues growing more than ever, and investment in grid, in power, more needed than ever. So I think we, that's why I think the networks, which is not dependent on federal authorities, depending on the states, are encouraging us to invest more and more and to put more money already to provide electricity than citizens require. But I think that's why our position in the U.S., 80% of our business, as you know, is networks. These networks, I insist, are regulated by states. And these are already, we have plans of investment almost of 19, 20 billion in networks in the next few years in all the states. New York mainly is the main place where we have to make. because they need more resilience in the grid, more digitalized grid, and they have to have access to the new demand of data centers and others. The rest, 20% of our business is – 20% of the rest of the business is renewable power, let's say. This power is – we have 10 gigawatts in operation. We have the production of all these gigawatts sold through long-term PPAs. And also we have a strong pipeline that we can develop according with the demand. So we have a strong prospect, data center, et cetera. But we will modulate because our priority now is investment in networks, as you know very well. So I think, as I mentioned as well, most of our supply chains to America is secure. Either in networks, most of it is American production, and in power, many of it is as well. But I think in this moment, for all the projects we have in construction, it's already fully either the components are in America or the few of them, less than 5% of the total investment, are already on the way. So which I think the risk is minimum of whatever thing can happen in terms of regulation.

Next question is related to the tariff, U.S. tariff, but has been already answered and also has been mentioned in the speech. Next question is regarding to Spain. What is your opinion about the Spanish nuclear fleet closure plan? Has there been any change in the current situation?

So I'm going to – in the last few years, the energy scenario has already changed worldwide. In Spain, in Europe, as a consequence of many things, of new demand from electric vehicles, data centers, cooling and heating, and geopolitical factors. I think the need of becoming more and more safe and efficient in the countries is a reality. So we have seen countries around. I think yesterday Germany announced that they would like to revise and to reopen the nuclear power plant. They closed. The same political party which now is in power, they now they are trying to reopen those ones. In Belgium, they are already reopening those ones. I think the European Commission is already providing some support or supporting the state aid for reopening or extending life of this nuclear power plant, and I think that is what is happening in the rest of the geographies, Britain, United States, whatever. So I think my point is that this situation requires deep analysis to see what is the impact of a potential shoot-down, and I think all the agents will have to participate. What I can say is Spain nuclear fleet is safe, efficient, and reliable. And I think myself as electric engineer, my opinion is that currently are absolutely necessary for the system stability and to keep the lights on. So we have seen a problem in countries which are already having problem with blackouts. As a consequence of the stability of the system, it's already been affected for several circumstances, mainly because of the volatility of certain of the power which now are in the system. So my approach is clear. So that is something that has to be done with an open dialogue. with all parties to create the common vision of the future of the electricity system and the nuclear in this electricity system to provide this competitive reliable service to the citizens. We are looking for competitivity. We are looking for reliable service. We are already all committed to provide the best for the citizens. As other countries are doing. So we are not trying to invent the wheel. The wheel has been invented. Everybody is moving in one direction. We have at least to make an open dialogue to analyze why we are moving in different direction if we move or why it's not better to move in the same direction of number one. So, Iberdrola, as always, we are ready to participate in such a dialogue as we always do. I think we would like the best for the citizens, and we would like the best for the system, and we would like the best for Spain. So I think in that way, I think we are a Spanish company. We are very pleased to participate in this dialogue for doing our best for providing the best service to the Spanish citizens in the best condition for all of them.

Next question is related to the UK. Could you please share some insights on the zonal pricing that is being proposed in the review of electricity market arrangements and, if possible, the effects that could have on your UK business?

So I used to say that when something is working well, it's better not to generate noises which can already affect to the investment which is already required for making that one. Unless... when all these things that people are talking about cannot be implemented before 2035? So why to generate now just a debate, something which cannot be implemented in the next 10 years? So Britain and the government is already encouraging us to invest almost $200 billion in the UK infrastructure. Only Scottish power, Iberdrola, I committed with the Prime Minister a few months ago, $24 billion up to 2028. So I think for making such a $200 billion investment, we need stability and predictability. So no noise and no disturbances in the discussion, theoretical discussion. That for this reason, large investors and trade unions agree that this will go against the urgent infrastructure investment required in the country. So I know very well members of the government. They are very committed to make the country to grow and for making this grow to attract as much as possible private investment to build infrastructure the country requires. I'm sure they're going to be very sensitive to this approach of the largest investors to not generate now noises which are not helping precisely to move on the speed up with the country required for making this investment happen as soon as possible.

Next question is related to the percentage of production in Spain and UK. We have locked in 2025 and 2026 for Spain and UK, as I mentioned, and the prices linked to this. Armando.

Hello, everybody. In Spain, for 25, around 95% is already committed, and for 26, it's 75%. It is worth highlighting that the wholesale prices in 25 are better than in 24, and are around 20% or higher than expected in our capital market days last March. In the U.K., we have more than 90 percent of 25 and 75 percent of 26 already committed, and the prices are similar of the 24.

Next is related to Spain again. Could you provide update time and expectation on Spanish electricity distribution regulation and returns and the condition expected? Yes.

I think the process is ongoing. I have no recent news. We expect in any case to be finalized before the year end. and I hope it's going to be already moving in the positive direction. Anyway, we have huge investment opportunities in networks, as I already mentioned, in all our countries. Spain today is our fourth country in terms of rate base, and I'm sure that Spain is going to move at the same speed for new investment and the same returns that other countries are already providing us.

Next question is related to Banjar Wynne and if we could give an update on the current situation of the offshore park.

I was last week there in Boston, and we were already revising the project. I think the buildup is progressing very well. All the foundation and the attention pieces are already installed. I think the only thing is already we are just depending on one single provider, which is General Electric, which is installing it. completing the installation of the turbines. And I think the expectation is that it will be fully completed by 2025. In this moment, we are already exporting electricity from some of our installed turbines. And I think that it works very well. I think the first credit has been received. And we expect already to continue receiving as soon as the new turbines have been put in service. So I think I was quite, let's say, satisfied how it's progressing, the work on that one.

And the last question is related to another offshore power plant. It's New England One in the U.S. If we can give some update as well.

So I've not been visiting New England One, but I promise after this question I'm going to go for half a review on that one. But as far as I know, I think we have 100% of the supply chain secure, a contract signed. we are already there starting already the construction of these components we will the plan is to be in operation by 2029, I think, 2028, 2029, yes. And I think it's going well. I think the most important thing is supply chains, supply chain secure, and I think we are in the progress and progressing that one well. I think we have the PPA, the CFD assigned, and all the terms of this is already done, and it's already in a process, a normal process on that one. So, The most important thing is the supply chain. The supply chain is absolutely secure in this moment.

Okay. One hour later than the starting point of this presentation. Now, please let me give the floor to Mr. Galan again to conclude this event.

So thank you very much once again for attending this conference call. And if you have any doubt, as always, the investor relations team will be available for any additional information you may require. Thank you very much, and I think see you soon. Thank you.

Buenos dias, señoras y señores. Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2024 fiscal year results presentation. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period given by the top executive team that usually is with us. Mr. Ignacio Galán, Executive Chairman, Mr. Armando Martínez, CEO, and finally, Mr. Pepe Sainz, CFO. Following this, we'll move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web, so please ask your question only through our webpage www.iberdrola.com. Finally, as today is a very busy day for all of you, given the many companies reporting results this morning, we expect that our event will not last more than 60 to 70 minutes. If any questions remain unanswered, we at IR are, as always, fully at your disposal. Hoping that this presentation will be useful and informative for all of you, now, with further ado, I would like to give the floor to Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.

Thank you very much, Ignacio, and good morning, everyone, and thank you, everyone, for joining us today. We are today presenting the result of an extraordinary year. Driven by our ordinary operations with a strong performance across all our business and geographies, but also due to the extraordinary factors in 2024, we took a huge step in the execution of our strategy using the proceeds from the development of thermal generation. to accelerate with these resources growth in networks in the U.K. with the electricity in the U.S. transaction and the U.S. where we acquire our green minorities. In addition, as a result of our customer-prudent accounting practices, we made 1.1 billion euros on non-cash adjustment and efficiency measures which offset the capital gains from the investment made and will enhance our future earnings. As a result, our reported net profit reached 5,712 million euros, up 17%. Reported EBITDA also increased by 70%, up to 16,148 million euros, driven by a new record in investment up to 17 billion euros of this total 12 billion euro organic investment. and 5 billion were the result of the two corporate transactions already mentioned in the U.S. and U.K. Operating cash flow reached 11,136 million euros, up 10% in recurring terms, allowing us to combine growth and financial strength with FAO to adjust net debt close to 23%. To secure this growth, last year we also made record purchases totaling 7,153 million euros, more related to the investment that will mature in 2026 and probably some fewer than in 2027. All in all, this strong performance is leading the Board to propose to the General Shareholders' Meeting a total dividend of 0.635 euros per share, up 15%. Moving to operating results, the 70% increase in EBITDA reflects our growth in all our businesses and geographies. Electricity production and custom benefit from 2,600 of additional renewable capacity, including more than 700 of offshore wind sold through a diversified portfolio or route to market, mainly CFDs and long-term PPAs with tier one companies like Meta, Microsoft, or Amazon. As well as the excellent performance of our pumping storage facilities, we generate almost 6 terawatt hours in market with growing intraday price spreads, as we predicated in our last Capital Markets Day. Networks operating results reflect rate increases across all geographies. In a higher asset base, mostly in the U.S. and U.K., after €11 billion invested in the last 12 months, almost doubling last year's figures. Networks organic investment increased by 21% to €62 billion, of which almost 60% was allocated to distribution. Mainly in the U.S. were invested €1.5 billion driven by New York rate case, and U.K. were invested €700 million. The remaining 40% correspond to transmission investment also due to the growth in the U.S. with more than $1 billion invested in New York and in ESC interconnection with Massachusetts and Canada. In the U.K., investment reached $100 million mainly in Rio Chichu project and the Eastern Green Link subsea cable. Additionally, we allocated $5 billion to electricity in the West and avant-garde transactions as mentioned. All in all, our network regulated asset base increased by 60% to 49 billion euros, with two-thirds in the UK and the US. UK RAP reached 15 billion, up 45%, given by the electricity and waste transaction and organic investment, followed by US with 14 billion euros, Brazil with 10 billion, and Spain finally with 9 billion. Growth in the US and the UK was also the main driver of renewable investment, which reached $5.4 billion, with almost $2 billion allocated to offshore wind. U.S. investment increased by 37% to $1.5 billion, mainly in our binyard wind offshore wind farm, which is on track to be fully operational in 2025. Also in the U.S., we completed more than 750 megawatts of solar PV and made significant progress on the construction of 1,500 wind and solar megawatts, all of them with supply chains, tax credit, and PPS secures. Following this increased investment in 2024, we do not expect to start new renewable projects in the U.S. in 2025. In the UK, investment reached 1.2 billion, mainly in this Anglia II, and three offshore wind farms, which, as you know, obtained CFDs in last auction. We also invested 1.4 billion in Iberia, putting in service 1,000 new megawatts with 500 more under construction, mostly with partners and PPA secure. In addition, we completed 2 million kilowatt hours of pumping storage capacity at Santiago Jarez and Valparaiso projects. In Germany, we completed the Baltic Eagle offshore wind farm with 476 megawatt of installed capacity, and we continue investing in Windacker, which will add 350 megawatt to our portfolio next year. Finally, in Australia, we commissioned 145 megawatt wind capacity, and we have 375 more under construction. In total, as December, our balance sheet includes 9 billion euros in renewable projects and construction that will begin contributing to results in 2025 and 2026. To guarantee the delivery of this ongoing project and the access of supply chains for new investment in 2024, we made purchases worth 18 billion euros. More than 14 billion of these purchases relate to investment that will be made in 2025 and beyond, allowing us to secure 100% of strategic contracts for all our projects under construction in networks and renewables. mainly through framework agreements that give us full certainty on availability and prices with minimal financial commitments. In addition, 88% of the companies in our supply chains comply with all our sustainability criteria. We will continue increasing the share of local suppliers, covering now 82% of the total purchase. As a result, we expect virtually no impact from new tariffs in the U.S., given our focus on American supply chains and the protection clause included in our contracts. Finally, we are already working to secure supply chains for protects after 2036, given the strong demand in global markets, especially for networks in the U.S. and the U.K., In particular, in Britain, we have guaranteed access to purchase worth 6 billion euros monthly for transmission investment in the next regulated period we will start in 2026. As mentioned, the corporate transaction completed in 2024 had accelerated the delivery of our strategy. Expanding our present network business in the U.S. and the U.K., we thanks obtain from the divestment our thermal generation assets and preserving our financial strength. After the acquisition of electricity in the West and avant-garde minorities, our combined net worth asset base in these two countries reached 30 billion euros, or 60% of our total regulated asset base. Enhancing our position ahead of a huge investment opportunities in transmission and distribution in the US and the UK that will exceed 41 billion euros by 2030 with around 52% in distribution and remaining 48% in transmission. In the U.S., the total network investment will reach 19 billion, both in distribution in your main and Connecticut, and in transmission mainly in the NCEC interconnection, a new project in Europe, on top of our ongoing investment. Network investment in the U.K. will reach 22 billion euros by 2030, mainly in transmission multiplied last year's triggers by two times, by four times due to the Rio T3 and major projects like Eastern Green Link. Investments are also expected to grow significantly in distribution driven by Rio ED2 and ED3 frameworks. In addition, we will continue increasing our footprint in the US and the UK through renewable projects already under construction, which will imply total investment of 10 billion euros. Our sustained increase in cash flow generation will allow us to finance all this growth and preserve our financial strength. Even in the year record of investment in 2024, our FFO over net debt ratio remained in 23% thanks to a 51% rise in operating cash flow to 60.7 billion euros. Recurrent cash flow increased by 10% to €11,836 million, and we have €20 million of liquidity enough to cover 22 months of financial needs. The combination of sustainable growth and financial strength is leading the Board to propose a 15% increase in the dividend corresponding to the full year 2024 result, up to €0.635 per share. 50% above our dividend flow for the period and reaching 2026 estimated two years ahead of schedule. The proposed supplementary dividend to be paid in July will reach 0.404 euros per share on the top of 0.231 euros already paid three weeks ago. Also, in line with previous year, we expect to maintain our engagement dividend linked to attendance to AGM, which in 2024 amounted €5 per every 1,000 shares. And we continue to combine shareholder rumination with growing social dividend, creating industry and jobs, contributing to public finance, and promoting innovation and sustainability across the communities. In 2024, we incorporated 6,000 people in our workforce, including more than 2,100 from electricity to the Northwest. And we made 18 billion euros of purchases mentioned to 1,000 suppliers that employ 500,000 people. We also made a record tax contribution exceeding 10 billion euros for the first time in our history, driven by a 16% increase in taxes charged to our income statement. And our commitment to equal opportunities was recognized by the top employers and the H certificates. Regarding innovation, Iberdrola was nominated by the European Commission as a private utility with the highest investment research and development worldwide for the third consecutive year after dedicating more than 400 million euros for this effort in 2024. Finally, we continue minimizing our carbon footprint, reaching levels close to net zero. In Europe, our CO2 emissions decreased once again to only 38 grams per kilowatt hour, which is five times less than the European Union average. This commitment to social responsibility is being recognized by the most prestigious institutions. Recently, Standard & Poor's ranked Iberdrola as the top utility worldwide in its Dow Jones Basin Class Index, based on a wide range of social, environmental, governance, and ethics criteria. I will now hand over to our CFO, who will present the good financial results. Thank you.

Thank you, Chairman. Good morning to everybody. As the Chairman has outlined, 2024 results were strong, both in reported and adjusted terms, underpinning the underlying growth of the business. In reported terms, 2024 net profit reached 5.6 billion, growing 16%, and adjusted net profit was 82 million lower and grew 15.1% to 5,530 million. Net operating expenses, net positive adjustment, mainly capital gains from our thermal generation asset divestment, has been mostly compensated by other negative adjustments and efficiencies below the EBITDA level, mainly in onshore renewables in the U.S., given the delay in developing the onshore pipeline infrastructure. as we will have less renewable growth as we prioritize especially investments in networks and in repowering. As a consequence, both EBIT and net profit are slightly lower in adjusted terms versus reported terms. This is not new in Iberdrola's strategy, as we try to compensate for extraordinary positive results with efficiencies and adjustments that help the group continue growing on a recurrent basis in the following years. For example, last year, and to a lesser extent, we compensated in Brazil capital gains due to an exchange of assets with a cleanup of higher costs and delays in transmissions due to COVID that we are trying to recover in the future. For transparency purposes, you can see in the slide the reconciliation between reported and adjusted 24 figures in our panel. Main difference between reported and adjusted figures at the BIDDA level is 1.6 billion as net operating expenses include 1,745 million net capital gain, mainly as commented in thermal generation asset divestment, and other ones related to other minor transactions in the U.S. gains of 77 million in Brazil losses of 51 million euros, as well as minus 111 million related efficiencies in Spain. This 1.6 billion difference is almost compensated at EBIT level, as DNA includes 1.5 billion negative adjustments and efficiencies mainly related to the U.S. onshore business and other renewables out of the U.S. due to the greater focus and networks and the expected delay in developing the pipeline mainly in the U.S. As a consequence, the difference between reported and adjusted EBIT is reduced to 132 million. At net profit level, the difference is just 82 million. Consider tax and other minorities' impact of adjustments. As a consequence, 24 adjusted net profit grew 15.1% to 5,530 million, slightly over our 5.5 billion euros last guidance update. In the annex, you will find an even more detailed reconciliation between reported and adjusted income statements. And now starting to go into the P&L analysis, a 20% improvement in procurement costs mainly in energy production and client business versus a much lower decrease in revenues, 9% only, thanks to our fixed price sales and the growth that comes from our network business has driven a 2.5% increase in gross margin to 24 billion euros. As you can see in the slide, on reported basis, net operating expenses improved 27%. Net operating expenses, excluding capital gain impact, as explained in the previous slide, as well as other adjustments and efficiencies, improved 27%. 0.7%. Adjusted net personal expenses improved 2.6%, excluding Q4 efficiencies impact. Adjusted external services increased 3.5%, excluding expenses linked to the thermal generation asset divestments. Adjusted other operating income increased 12.8%, excluding the positive 1.7 billion impact from thermal generation asset divestment driven by recoveries and indemnities. Reported levies reached 2,567 million in 2024 versus 2,748 million in 2023, improving 7%, positively affected by sentences in Spain already accounted in our nine-month result, 79 million positive of the hydrocanon and 193 million for the social bonus. Excluding these court rulings, levies grew 3%, driven by the higher hydrocarbon, the 7% tax on Spanish production, and the nuclear waste tax and the windfall tax in the UK. As you can see in the slide, Spain is by far the country where we pay the highest levies. 57% of the levies paid by the group worldwide. This, as mentioned previously, is the main reason why electricity in Spain is more costly than in other geographies. Analyzing the results of the different businesses and started by networks, its EBITDA grew 7% to 6,423 million euros, driven by higher regulated asset base and tariffs. Brazil accounts for 33% of total EBITDA, followed by Spain, the UK and the US. But if we consider recent E&W transactions, the UK would have increased its weight to 28%. In Spain, EBITDA was 1,542 million euros, minus 0.7%, as our operating performance was in line with the three, but affected by negative impact of the regularization of past investments. In the UK, EBITDA increased 5.6% to 1,239 million pounds, with higher contribution in distribution thanks to the new ED2 framework and growing demand. There is also a partial recovery of a provision made in the Q3 of 2023 at net operating level. 2024 does not include EBITDA contribution In Spain, EBITDA grew 23%, improving the 18% rise in September to R12,157 million, with higher demand and higher tariffs in distribution and transmission, positively affected by a R2,148 million negative one-off in 2023 related to transmission. In the U.S., U.S. GAAP EBITDA increased 2 percent to $1,191 million, as there is an improvement in contribution from the new rate cases mainly in New York, thanks to higher tariffs. IFRS EBITDA was 5 percent lower to $1,439 million, with higher contribution from rate cases partially compensated a negative timing effect due to IFRS account and higher costs. The variation versus Q3 is due to a positive Q4 in 2023 due to the recognition in that quarter of higher tariffs in New York since May 23. Energy production and customers' business EBITDA reached 10,000.5 billion euros compared to the 8.6 billion last year, driven by the investments of thermal generation assets and better business performance. In adjusted terms, there is a 2% growth, despite the fact that there was a £341 million positive one-off in the UK last year. I want to point out that the business reached close to 84% emission-free generation in 2024. In Iberia, EBITDA was 4.6 billion euros, 8% more due to the 4.7 terawatt-hours higher manageable renewable production in 2024, including pumping storage and lower procurement costs, compensating lower prices. 90% of our production in Iberia was non-emitting. In the UK, EBITDA fell 15.7% to £1,530 million, affected by the £341 million positive one-off related to tariff deficit recovery in 2023, as I mentioned in the previous slide. Excluding that, EBITDA increased 3.8%. thanks to higher production and wind onshore and better prices, partially offset by higher windfall tax and £150 million negative operating issues in offshore already fixed. In the U.S., EBITDA increased 43% to $1,059 million, thanks to the positive performance of our flexible generation fleet and better prices that improved results with our renewable production increasing 3%. In addition, in Q4, there is a positive 92 million capital gain from the partial sale of Kitty Hawk, an offshore seabed. In the rest of the world, EBITDA grew 72% to 721 million euros, with 31% higher production due to the entry into operation of Sandbrook Windfarm, at full capacity since May, and more onshore capacity installed in Poland, Greece and Australia. In Brazil, EBITDA decreased 30% to 1,318 million reais due to the capital loss of Baixo Iguazu's sale and lower thermal contribution. Finally, in Mexico, EBITDA reached US$2.3 billion, excluding the divestment. EBITDA reached US$459 million, affected by the sale and the consolidation of the assets sold from February 26, but the remaining assets still contribute around half of what they did previously. Mexican businesses continue to use dollars as a functional currency. Reported DNA and provisions grew 31% to 7.1 billion euros, mainly due to already mentioned 1.5 billion provisions related to onshore renewable assets, mainly in the U.S. Excluding 1.5 billion adjustments, DNA provisions grew 3% to 5.6 billion euros. as adjusted provisions include 141 million, mainly due to lower bad debt provisions, while depreciation and amortizations grew 6.8% in line with our higher asset base in networks and renewables. EBIT reached 9,729 million euros and grew 8%. As you can see in the slide, 1.7 billion net capital gain, mainly thermal generation asset sale, has been almost compensated by 1.6 billion euros different adjustments mainly in the U.S. on shores and inefficiencies. As a consequence, adjusted EBIT grew 7% to 9.6 billion euros, 132 million below the reported EBIT. Net financial expenses improved 612 million euros to 1,575 million euros. Debt-related costs improved 60 million as a consequence of 55 million reduction due to lower cost of debt. Sixteen basis points. 57 million linked to FX, mainly the Brazil depreciation that compensates lower EBITDA in euros, partially offset by a 52 million increase due to 0.2 billion higher average net debt. And non-debt-related results got better by 552 million, including 280 million linked to FX derivatives, that in 24 are 90 million positive versus 120 million negative in 23, mainly due to the divestment of thermal generation assets in Mexico compensated at tax level. It is important to point out that the thermal generation asset divestment was in dollars, but for tax purposes it was in pesos, so hedges were needed. And there is another 272 million positive due to capitalized interest, 163 million euros and one-offs, 67 million mainly due to court rulings. Our reported credit metrics remain strong, driven by higher FFO, compensated higher debt. Iberdola rating remains in the BBB plus BWA1 rating, level also held by the improvement of our business profile with more regulations assets in countries with better ratings. 24 credit metrics were as follows. FFO adjusted net debt reached 22.9%. Our adjusted net debt to EBITDA remained in line with last year at 3.4 times, and our adjusted leverage ratio increased slightly to 41.4%. Our net debt has evolved from 47.8 billion at the end of 23 to 51.7 billion at the end of 24. As you can see in the slide, our 11.8 billion cash flow generation compensated gross investments and our 6 billion asset rotation funded non-organic investments. Let me also highlight that 24 net debt includes 15 billion of work in progress that it is not still contributing to cash flow generation in the plant, but it is the source of future growth. 24 reported net profit grew 17% to 5.6 billion euros compared to 4.8 billion reported net profit. In this slide, you can see net of taxes, how the net capital gains 1.1%. 1,184 million mainly thermal generation assets sale that was already in an account since September results has been almost compensated in the fourth quarter by 1.1 billion of efficiencies and adjustments already explained. As consequence, 24 adjusted net profit grew 15% to 5,530 million, only 82 million below reported net profit. Adjusted net profit in 24 is the base for 25 guidance and is reported net profit excluding capital gains from asset rotation adjustments and efficiencies. Now the chairman will conclude the presentation. Thank you very much.

Thank you, Pepe. Last March we presented our outlook for the coming years with a clear message. Electrification is unstoppable. Less than one year later, all the data confirms our vision. Electricity demand is accelerating, especially in Europe and U.S., where after years of decreasing demand consumption is now expected to grow at least in line with GDP. Driven by electrification of cooling and heating, transport, industry, and new demand sources like data centers, artificial intelligence, we will be more than offsetting energy efficiency improvements. In 2024, demand already grew by more than 2% in the U.S. and U.K., and this trend is set to continue in the coming years. but if we want electrification to reach its full potential, network infrastructure must be ready ahead of consumption. For this reason, most regulators are now recognizing the need of a speed-up network investment to serve the latent demand of electricity that homes and especially industries will be consuming today if they have access to sufficient grid capacity. In the U.S., transmission and distribution investment rose by 30% in 2024 compared with the average of the previous five years. In the U.K., the business plan sent to Objem by transmission operators show that the investment will need to multiply by three or four times from 26 to 31. Meeting this demand, we also require additional generation sources to provide competitive, local, and efficient electricity with the lowest price volatility. This is pushing most countries to choose zero-emission technologies. Last year, renewables covered 80% of new demand globally, with double-digit production increases in countries like the U.S. Rising renewable penetration is also increasing intraday price variability in most wholesale markets, making storage even more critical to preserve system stability and cover demand 24-7. For example, in the Iberian system, where last year average price stabilized at 63 euros megawatt-hour, hourly price spread rose by 75 percent compared to 2023 and has multiplied by three since 2020. In this context, we have accelerated our plan to maximize our competitive advantage and capture growth opportunities, especially in network business. Accordingly, in 2024, we reached 49 billion euros regulated asset base with 60% in U.S. and U.K. and huge prospect of both countries. In renewables, our first mover position across markets allow us to be highly selective with new investment assets and the construction already guarantee our growth over the coming years. All new projects are progressing well with supply chains and route to market secure, mostly through PPS or CFDs. In terms of geographies and areas, the UK and US remain at the core of our growth strategy. Larger investment in this market reached 12 billion euros, 70% of our total investment, mostly in networks, bringing the share of our global regulated asset base over 60%. This improvement in our business profile is already driven additional growth in 2025. networks will benefit from increasing organic investment and better framework in all markets, plus 3.5 billion euros of regulated taxes made from electricity in the West and 100 percent contribution from avant-garde in terms of net profit. In electricity production and customer, we have 2,600 of additional capacity and 22 million kilowatt hours of new storage, including the full commission of the Tameka hydropower plant. In addition, The efficiency measures implemented in the last quarter, in 2024, will start delivering their first positive impact in 2025. We will continue with our active management of financial expenses, and we have already secured better exchange rates. As a result, in 2025 we expect mid-to-high single-digit growth in net profit, excluding capital gains from asset rotation, well above 5.3 to 5.4 billion estimated last March. In fact, we already exceed these figures in 2024, reaching already levels close to our estimates for 2026. And we see a clear consolidation of these growth trends in the coming years, driven a structural improvement of our long-term outlook. In 2026, we expect higher rates in place to a larger network asset base across all countries. An operating result will reflect the full consolidation of electricity in the U.S. and the U.K. In addition, the contribution of major transmission projects will continue rising, given the progress in NCEC in the U.S., a new asset under construction in the U.K. and Brazil. In renewables, we will benefit from additional offshore wind capacity from Windacker in Germany, Binger Wind One in the U.S., and Sanglia 3 in the U.K., and from continuous improvement in market fundamentals driven by electrification. To conclude, our revolution in 2024 and the underlying trends in all of our markets confirm our vision. Every major invention of technological revolution in the first 21st century were electrical, including electric vehicles, heat pumps, digitalization, artificial intelligence. All these are powered by electricity, making this electrification unstoppable. In fact, the countries that are achieving a higher share of electricity than total energy demand are improving their competitiveness and registering higher growth rates. Over the last several years, this demand growth has been faster than the build-out of new network infrastructure, creating a latent demand that requires upgrades in transmission and distribution grids urgently. And the age of the electrification has just begun, accelerating the need for great investment to cover new demand, integrate renewables, improve resiliency, and promote digitalization. Of course, meeting this new consensus will also require more clean and reliable energy sources, as well as storage facilities to preserve the existing flexibility. Governments across the world are recognizing all this by promoting additional investment to improve energy security and autonomy, competitiveness and decarbonization. And thanks to our vision and execution, we are in the best position to capture all these opportunities across the geographies and regions we serve. We will give you detailed information about our growth prospect in our Capital Market Day in September 2024 this year. Of course, in the meantime, every quarter we will continue to update you in our progress. Thank you very much for your attention, and we are now more than ready to answer all your questions.