Iberdrola, S.A.

[Foreign Language] 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 Galan, Executive Chairman; Mr. Armando Martinez, 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 web page, 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 Galan.

Thank you very much again. Please, Mr.

Galan.

Thank you very much, Ignacio, and good morning, everyone, and thank you for -- 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 huge step in the execution of our strategy using the proceeds from the divestment of thermal generation to accelerate with these resources, growth in networks in the U.K.

with the Electricity North West transaction, in the U.S. where we acquired Avangrid minorities.

In addition, as a result of our customer prudent accounting practices, we made EUR 1.1 billion of noncash adjustment and efficiency measures which offset the capital gains from the divestment made and will enhance our future earnings. As a result, our reported net profit reached EUR 5,612 million, up 17%.

Reported EBITDA also increased by 17% up to EUR 16,848 million driven by a new record in investment up to EUR 17 billion. Of this total, EUR 12 billion were organic investment and EUR 5 billion were the result of the two corporate transactions already mentioned in U.S.

and U.K. Operating cash flow reached EUR 11,836 million, up 10% in recurring terms, allowing us to combine growth and financial strength with FFO to adjusted net debt close to 23%.

To secure this growth, last year, we also made record purchase totaling EUR 17,853 million, more related to the investment that will mature in 2026, probably few of them in 2027. All in all, this strong performance is leading the Board to propose to the General Shareholders Meeting a total dividend of EUR 0.635 per share, up 15%.

Moving to operating results. The 17% increase in EBITDA reflects our growth in all our businesses and geographies.

Electricity Production and Customers 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 1 companies like Meta, Microsoft or Amazon as well as excellent performance of our pumping and 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 EUR 11 billion invested in the last 12 months, almost doubling last year's figures.

Networks organic investment increased by 21% to EUR 62 billion (sic) [ EUR 6.2 billion ] of which almost 60% was allocated to distribution mainly in the U.S., where we invested EUR 1.4 billion, driven by New York rate case and U.K. where we invested EUR 700 million.

The remaining 40% respond -- correspond to transmission investment also due to the growth in the U.S. with more than EUR 1 billion invested in New York and the NECEC interconnection between Massachusetts and Canada.

In the U.K. where investment reached EUR 100 million mainly in RIIO-T2 project and the Eastern Green Link subsea cable.

Additionally, we allocated EUR 5 billion to Electricity North West and Avangrid transaction, as mentioned. All in all, our networks regulated asset base increased by 60% to EUR 49 billion with 2/3 in the U.K.

and the U.S. U.K.

RAB reached EUR 15 billion, up 45% driven by the Electricity North West transaction and organic investment, followed by U.S. with EUR 14 billion, Brazil with EUR 10 billion and Spain finally with EUR 9 billion.

Growth in the U.S. and the U.K.

was also the main driver of renewable investment, which reached EUR 5.4 billion, with almost EUR 2 billion allocated to offshore wind. U.S.

investment increased by 37% to EUR 1.5 million mainly in our Vineyard 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 with the construction of 1,500 wind and solar megawatts of all of them with supply chains, tax credit and PPAs secured.

Following this increased investment in 2024, we do not expect to start new renewable projects in U.S. in 2025.

In the U.K. investment reached EUR 1.2 billion, mainly in the East Anglia 2 and 3 offshore wind farms, which, as you know, obtained CfDs in last auction.

We also invested EUR 1.4 billion in Iberia, putting in service 1,000 new megawatts with 500 more under construction, mostly with partners and PPA secured. In addition, we completed 2 million-kilowatt hours of pumping and storage capacity at Santiago Jares and Valparaiso projects.

In Germany, we completed Baltic Eagle offshore wind farm with 476 megawatt of installed capacity, and we continue investing in Windanker, which will add 315 megawatts 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 include EUR 9 billion in renewable projects under 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 EUR 18 million.

More than EUR 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 agreement 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.

And we 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 U.S.

given our focus on American supply chains and the protection clause included in our clauses -- in our contracts. Finally, we are already working to secure supply chains for protects after 2026 given the strong demand in global market, especially for networks in the U.S.

and the U.K. In particular, in Britain, we have guaranteed access to purchase worth EUR 6 billion mostly for transmission investment in the next regulated period which will start in 2026.

As mentioned, the corporate transaction completed in 2024 had accelerated the delivery of our strategy, expanding our present networks business in the U.S. and the U.K.

with funds obtained from the divestment of our thermal generation assets and preserving our financial strength. After the acquisition of Electricity North West and Avangrid minorities, our combined networks asset base in these 2 countries reached EUR 30 billion or 60% of our total regulated asset base, enhancing our position ahead of a huge investment opportunities in transmission and distribution in the U.S.

and the U.K. that will exceed EUR 41 billion by 2030 with around 52% in distribution and remaining 48% in transmission.

In the U.S., the total networks investment will reach EUR 19 billion both in distribution in New York, Maine and Connecticut and in transmission, mainly in the NECEC interconnection, a new project in Europe on top of our ongoing investment. Networks investment in U.K.

will reach EUR 22 billion by 2030, mainly in transmission, multiply last year's figures by 2x -- by 4x due to the RIIO T3 and major project like Easter Green Link. Investments are also expected to grow significantly in distribution, driven by RIIO 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 EUR 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 at 23%, thanks to a 51% rise in operating cash flow to EUR 16.7 billion. Recurring cash flow increased by 10% to EUR 11,836 million, and we have EUR 20 million (sic) [ EUR 20 billion ] 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 results up to EUR 0.635 per share, 50% above our dividend flow for the period and reaching 2026 estimate 2 years ahead of schedule. The proposed supplementary dividend to be paid in July will reached EUR 0.404 per share on the top of EUR 0.231 already paid 3 weeks ago.

Also in line with previous years, we expect to maintain our engagement dividend linked to attendance to our AGM, which in 2024 amounted EUR 5 per every 1,000 shares. And we continue to combine shareholder remuneration with growing social dividend, creating industry and jobs, contributing to public finance and promoted innovation and sustainability across the communities.

In 2024, we incorporated 6,000 people in our workforce, including more than 2,100 from Electricity North West. And we made EUR 18 billion of purchase as mentioned to 1,000 suppliers that employ 500,000 people.

We also made a record tax contribution exceeding EUR 10 billion 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 were recognized by the Top Employers and the EDGE Certificate.

Regarding innovation, Iberdrola was nominated by the European Commission as a private utility with the highest investment in research and development worldwide for the third consecutive year after dedicating more than EUR 400 million 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 5x less than European Union average. This commitment to social responsibility is being recognized by the most prestigious institutions.

Recently, Standard & Poor ranked Iberdrola as the top utility worldwide in its Dow Jones Best-in-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 group financial results.

Pepe?

Thank you, Chairman, and 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, '24 net profit reached EUR 5.6 billion, growing 16% and adjusted net profit was EUR 82 million lower and grew 15.1% to EUR 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 adjustment 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 cost 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 EBITDA level is EUR 1.6 billion as net operating expenses include EUR 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 EUR 77 million, in Brazil losses of EUR 51 million as well as minus 11 -- sorry, EUR 111 million related efficiencies in Spain.

This EUR 1.6 billion difference is almost compensated at EBIT level as D&A includes EUR 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 in 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 EUR 132 million.

At net profit level, the difference is just EUR 82 million, consider tax and other minorities impact of adjustments. As a consequence, '24 adjusted net profit grew 15.1% to EUR 5,530 million, slightly over our EUR 5.5 billion last guidance update.

In the annex, you will find an even more detailed reconciliation between reported and adjusted income statement. 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 of that comes from our network business has driven a 2.5% increase in gross margin to EUR 24 billion.

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 0.7%.

Adjusted net personnel 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 EUR 1.7 billion impact from thermal generation asset divestment driven by recoveries and indemnities. Reported levies reached EUR 2,567 million in '24 versus EUR 2,748 million in '23, improving 7%, positively affected by sentences in Spain already accounted in our 9 months result, EUR 79 million positive of the Hydro Canon and EUR 183 million for the social bonus.

Excluding this court ruling levies -- this court rulings, levies grew 3%, driven by the higher Hydro Canon, the 7% tax on Spanish production and the nuclear waste tax and the windfall tax in the U.K. 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 starting by Networks, its EBITDA grew 7% to EUR 6,423 million, driven by higher regulated asset base and tariffs.

Brazil accounts for 33% of total EBITDA followed by Spain, the U.K. and the U.S.

But if we consider recent ENW transaction, the U.K. would have increased its weight to 28%.

In Spain, EBITDA was EUR 1,542 million, minus 0.7% as our operating performance was in line with '23 but affected by negative impact of the regularization of past investments. In the U.K., EBITDA increased 5.6% (sic) [ 15.6% ] to GBP 1,239 million, 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 at net operating level. 2024 does not include EBITDA contribution from ENW.

In Spain, EBITDA grew 23%, improving the 18% rise -- sorry, in Brazil, EBITDA grew 23%, improving the 18% rise in September to BRL 12,157 million, with higher demand and higher tariffs in distribution and transmission positively affected by a BRL 2,148 million negative one-off in '23 related to transmission. In the U.S., U.S.

GAAP EBITDA increased 2% to $1,991 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 '23 due to the recognition in that quarter of higher tariffs in New York since May '23. Energy Production and Customers business EBITDA reached EUR 10,000.5 billion (sic) [ EUR 10.5 billion ] compared to the EUR 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 GBP 341 million positive one-off in the U.K. last year.

I want to point out that the business reached close to 84% emission-free generation in '24. In Iberia, EBITDA was EUR 4.6 billion, 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 U.K., EBITDA fell 15.7% to GBP 1,530 million, affected by the GBP 341 million positive one-off related to tariff deficit recovery in '23, as I mentioned in the previous slide.

Excluding that, EBITDA increased 3.8%, thanks to higher production in wind onshore and better prices, partially offset by higher windfall tax and GBP 115 million negative operating issue 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 EUR 92 million capital gain from the partial sale of Kitty Hawk, an offshore seabed.

In the Rest of the World, EBITDA grew 72% to EUR 721 million with 31% higher production due to the entry into operation of St. Brieuc wind farm at full capacity since May and more onshore capacity installed in Poland, Greece and Australia.

In Brazil, EBITDA decreased 30% to BRL 1,318 million due to the capital loss of Baixo Iguazú sale and lower thermal contribution. Finally, in Mexico, EBITDA reached USD 2.3 billion.

Excluding the divestment, EBITDA reached $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 business continued to use dollar as the functional currency.

Reported D&A and provisions grew 31% to EUR 7.1 billion, mainly due to already mentioned EUR 1.5 billion provisions related to onshore renewable assets, mainly in the U.S. Excluding EUR 1.5 billion adjustments, D&A, provisions grew 3% to EUR 5.6 billion as adjusted provisions include EUR 141 million, mainly due to lower bad debt provisions, while depreciation and amortizations grew 6.8%, in line with higher asset base in networks and renewables.

EBIT reached EUR 9,729 million and grew 8%. As you can see in the slide, EUR 1.7 billion net capital gain, mainly thermal generation asset sale, has been almost compensated by EUR 1.6 billion different adjustments, mainly in the U.S.

onshore and inefficiencies. As a consequence, adjusted EBIT grew 7% to EUR 9.6 billion, EUR 132 million below the reported EBIT.

Net financial expenses improved EUR 612 million to EUR 1,575 million. Debt-related costs improved EUR 60 million as a consequence of EUR 55 million reduction due to lower cost of debt, 16 basis points.

EUR 57 million linked to FX, mainly the Brazil depreciation that compensates lower EBITDA in euros, partially offset by EUR 52 million increase due to EUR 0.2 billion higher average net debt. And nondebt-related result got better by EUR 552 million, including EUR 280 million linked to FX derivatives that in '24 are EUR 90 million positive versus EUR 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 divestments was in dollars. But for tax purposes, it was in pesos, so hedges were needed.

And there is another EUR 272 million positive due to capitalized interest, EUR 163 million and one-offs, EUR 67 million, mainly due to court rulings. Our reported credit metrics remain strong, driven by higher FFO, compensated higher debt.

Iberdrola rating remains in the BBB+/Baa1 rating, level also helped 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 3.4x; and our adjusted leverage ratio increased slightly to 41.4% (sic) [ 45.4% ].

Our net debt has evolved from EUR 47.8 billion at the end of '23 to EUR 51.7 billion at the end of '24. As you can see in the slide, our EUR 11.8 billion cash flow generation compensated gross investments and our EUR 6 billion asset rotation funded nonorganic investments.

Let me also highlight that '24 net debt includes EUR 15 billion of work in progress that it is not still contributed to cash flow generation in the plant, but it is the source of future growth. '24 reported net profit grew 17% to EUR 5.6 billion compared to '23, EUR 4,808 million (sic) [ EUR 4,803 million ], so EUR 4.8 billion reported net profit.

In this slide, you can see net of taxes, how the net capital gains, EUR 1.1 billion, EUR 1,184 million, mainly thermal generation asset sale that was already in our accounts in September results has been almost compensated in the fourth quarter by EUR 1.1 billion of efficiencies and adjustments already explained. As a consequence, '24 adjusted net profit grew 15% to EUR 5,530 million, only EUR 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 flat or decreasing demand, consumption is now expected to grow at least in line with GDP driven by electrification of cooling and heating, transport, industry new demand sources like data centers, artificial intelligence, which will be more than offset energy efficiency improvements. In 2024, demand already grew by more than 2% in 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 the homes and especially industries will be consuming today if they had access to sufficient grid capacity. In U.S.

transmission and distribution investment rose by 30% in 2024 compared with the average of the previous 5 years. In the U.K.

the business plan sent to Ofgem by transmission operators show that the investment will need to multiply by 3 or 4x 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 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 prices stabilized at EUR 63 megawatt hour, our price spread rose by 75% compared to 2023 and have multiplied by 3 since 2020.

In this context, we have accelerated our plan to maximize our competitive advantage and capture growth opportunities, especially in Networks business. Accordingly in 2024, we reached EUR 49 billion of regulated asset base with 60% in U.S.

and U.K., a huge -- but with huge prospects of both countries. In renewables, our first-mover position across markets allow us to be highly selective with new investment as assets under construction already guarantee our growth over the coming years.

All new projects are progressing well with supply chains and route to market secured mostly through PPAs or CfDs. In terms of geographies areas, the U.K.

and U.S. remain at the core of our growth strategy.

[indiscernible] investment in this market reached EUR 12 billion, 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 has already driven additional growth in 2025.

Networks will benefit from an increase in organic investment and better in framework in all markets plus EUR 3.5 billion of regulated asset base from electricity in Northwest, a 100% contribution from Avangrid in terms of net profit. In electricity, production and customers, we have 2,600 of additional capacity and 22 million-kilowatt hours of new storage, including the full commission of the Tamega hydro power plant.

In addition, the efficiency measures implemented in 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 of EUR 5.3 billion to EUR 5.4 billion estimate last March. In fact, we already exceeded 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, driving a structural improvement of our long-term outlook. In 2026, we expect higher rates implies to a larger network asset base across all countries and operating results will reflect the full consolidation of electricity in Northwest in the U.K.

In addition, the contribution of major transmission project will continue rising, given the progress in NECEC in the U.S., a new asset under construction in U.K. and Brazil.

In Renewables, we will benefit from an additional offshore wind capacity for Windanker in Germany, Vineyard in U.S. and East Anglia 3 in U.K.

and from continuous improvement in market fundamentals driven by electrification. To conclude, our evolution in 2024 and the underlying trends in all 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 [indiscernible].

In fact, the countries that are achieving a higher share of electricity in 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 bill out of new network infrastructure, creating a latent demand that requires upgrade in transmission and distribution grid urgently.

And the age of the electrification has just begun accelerating the need of -- for grid investment to cover new demand, integrated renewables, improve resiliency and promote digitalization. Of course, meeting this new consumption, we also require more clean and reliable energy sources as well as storage facilities to preserve the existing flexibility.

Government across the world are recognizing all these 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 (sic) [ 2025 ] this year. Of course, in the meantime, every quarter, we will continue to update you on 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 entry following. First, Fernando Lafuente, Alantra; Meike Becker, HSBC; Gonzalo Sánchez-Bordona, UBS; Rob Pulleyn, Morgan Stanley; Peter Bisztyga, Bank of America; Pedro Alves, CaixaBank; Fernando Garcia, Royal Bank of Canada; Jorge Alonso, Societe Generale; Javier Suarez, Mediobanca; José Ruiz, Barclays; James Brand, Deutsche Bank; and finally, Manuel Palomo, Exane BNP.

The first question is related to -- there are a few analysts asking the following: how does the company's full year 2024 results compared 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 EUR 5,530 million, growing 15%.

And our reported net profit includes EUR 1.1 billion of capital gains, almost fully offset that Pepe has already explained by noncash adjustment that we will hedge our future earnings and always do.

Next question is, can you provide please more color on the noncash adjustments, which factors have driven the adjustment in the renewable business? How does this affect future investments?

Pepe?

Yes. 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 we'll be more selective in renewables.

Obviously, in the evaluation of that assets, there is -- 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 most of the EUR 1.6 billion adjustment. So basically, it's the valuation of the pipeline because we are in the -- mainly in the U.S., although there is some other adjustments that we are doing in onshore and other smaller adjustments in other geographies, what is 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 assisted prudent system. And our role is to provide a stable growth trend and to avoid already future surprises, negative or positive.

So always, we -- the history of the company has been based in this prudent approach and not to celebrate extraordinary thing, 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 mid- to high single-digit growth guidance for 2025, which is the base for the growth calculation?

And how will Avangrid 100% of [indiscernible] obviously and ENW contribute?

So as I explained in my speech, I think it's 2025 guidance, so this mid- to high single is based in the adjusted net profit of EUR 5,530 million based on the 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 RAB as well in all countries because of our investment and with better tariffs in some cases, which are already -- we have rate cases, which have already been implemented during 2025.

There are as well 2,600 new megawatts of renewables, and I think it's a full contribution of electricity in Northwest and Avangrid, which is 100%. So -- but perhaps, Pepe, you can already give exactly which are the numbers of this Avangrid and ENW that we are expecting.

Yes. We are expecting that both of them will contribute -- the sum of both of them will contribute somewhere between EUR 100 million and EUR 200 million for the -- for '25.

So these both companies, ENW will contribute 12 months versus 2 months last year. And obviously, Avangrid, the acquisition of the minorities will also add.

So I think -- we think that EUR 150 million, EUR 200 million could come from these 2 deals.

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

Well, I thought that I already -- I tried to clarify that one in my comment, but I think I will insist again. So I think it's mainly is due to our Networks business in U.S.

and U.K. as well as the completion of the project under construction.

I think we mentioned that we have EUR 15 billion in this moment of work in process that is not providing results. And I think most of them, they are going to be completed during this period.

So I think it's -- 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 NECEC in U.S.

and [indiscernible] in U.K. and Brazil as well the transmission, we are already in construction.

And offshore, East Anglia 3 will be completed during next year. Windanker will be competed next year and Vineyard Wind will be completed by the end of 2025.

So -- and I think as Pepe mentioned, we have the full contribution of electricity in Northwest, which this year, we will contribute partially only because we are expecting the final approval of CMA, we were 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 detail of all these things.

And I hope they will be as well as good as we are expecting.

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

Pepe?

Yes. Well, we are expecting to end the year with adjusted net debt somewhere between EUR 55 million and EUR 56 billion.

Basically, apart from the -- obviously, the traditional investment plan and that we always have. This year, what is going to change is the ENW consolidation.

That could add around EUR 2.5 billion, EUR 2.6 billion of new debt when we consolidate ENW. But it will add also the FFO, okay?

So it will consolidate the debt, but we will consolidate the FFO, which we are right now not consolidating. To compensate that, we are right now with 2 or 3 initiatives of asset rotation that we hope to complete 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 2 or 3 initiatives that we are expecting, that will compensate.

But in the end of the year, as I was saying, EUR 55 million to EUR 56 billion 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 it is about the recent clean industrial deal and the affordable energy plan. What is your view on the subject?

So I think it's -- 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 it's -- most of our recommendations are included in terms of clear market orientation, promoting long-term contract, PPAs, CfDs, et cetera.

It's a strong message on the reduction of taxes and charges. You know I've been for many years insisting on this for 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 have already spoke 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 and Maine, Massachusetts.

We are serving almost 10 million Americans. We have increased the investment in the history in these 20 years.

We have increased investment in all administration. We [indiscernible] assets 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 I think we will work well with a new one. In fact, in the change of administration, we have already committed around $4 billion into this country, a capital increase to Avangrid plus facilities -- liquidity facilities to Avangrid as well.

I think there are something certain. The demand in United States continue 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 dependent on the states, are encouraging us pays more and more and to put more money already to provide electricity in cities that require. So -- but I think that's why our position is 80% of our business, as you know, is networks.

In these networks are regulated by state and these are already -- we have plans of investment almost of EUR 19 million, EUR 20 billion in networks in the next few years in all the states, New York mainly is the main place that 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 our -- the rest of the business is renewables power, let's say.

And this power is -- we have 10 gigawatts in operation with 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 is to America is secured, either in networks.

Most of it is American production. And in power, many of it as well.

But I think in this moment for all the projects we have in construction is already fully either the components are in America or the few of them, less than 5% of the total investments are already underway, 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, that 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 a new demand from electric vehicles, data centers, cooling and heating and geopolitical factors.

I think the need of becoming more and more self-sufficient 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 which now is in power, they -- now they are trying to reopen the old 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 the 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 shutdown.

And I think all the agents have to participate. What I can say is Spain nuclear fleet is efficient and reliable and I think ready for the system stability and to keep the lives on.

So we are seeing a problem in countries, which are already having problems with blackouts as a consequence of the stability of the system has 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 best for the citizen as other countries are going.

So it's -- we are not trying to invent the wheel. The wheel has been invented and everybody is moving in the right direction.

We have at least to make -- to participate in such a dialogue as we always done. I think we would like the best for the citizens, and we would like the best for the system, and we will 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 the dialogue for doing our best for providing the best service to the Spanish citizen in the best condition for all of them.

Next question is related to the U.K. Could you please share some insights on the zonal pricing that has been proposed in the review of electricity market arrangement?

And if possible, the effects that could have on your U.K. business?

So I used to say that when something is working well, it's better not to generate noises. We can already affect to the investment, which is already required for making that one.

And unless when all these things that people are talking about cannot be implemented before 2035. So why to generate now just a debate something we cannot be implemented in the next 10 years.

So Britain is -- and the government is already encouraging us to invest almost EUR 200 billion in the U.K. infrastructure, only Scottish Power, Iberdrola.

I commit with the Prime Minister a few months ago, EUR 24 billion up to 2028. So -- and I think it's for making such EUR 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 [ organic ] infrastructure investment required in the country.

So I know very well members of the government. They are very committed with -- to make the country to grow.

And we're making this growth to attract as much as possible product investment, to build infrastructure the country require. I'm sure they are 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.

This question is related to the percentage of production in Spain and U.K., you have -- we have locked in 2025 and 2026 for Spain and U.K. dimension and the prices linked to this...

Hello, everybody. In Spain, for '25, around 95% is already committed and for '26 is 75%.

It is worth highlighting that the wholesale prices in '25 are better than in '24 and around 20% or higher than expected in our Capital Markets Day last March. In U.K., we have more than 90% of '25 and 75% of '26 already committed and the prices are similar of the '24.

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

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 already -- 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 core 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 in the same returns than other countries is already providing us.

Next question is related to Vineyard Wind and if we could give an update on the current situation of the offshore part.

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 [indiscernible] pieces are ready installed. I think is -- the only thing is already -- we are just depending on one single provider, which is General Electric, which is installing -- 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 tax 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 last question is related to another offshore power plant, is 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 quarter, I'm going to go for further review on that one. But as far as I know, I think it's -- we have 100% of the supply chain secure and 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, '29, yes.

And I think it's going well. I think it's -- the most important thing is supply chain.

Supply chain is secure. And I think we are in the progress and progressing that one as well.

I think we have the PPA, the CfD assigned and all the terms of this is already done and it's already in the process in normal process on that one. So the most important thing is the supply chain.

The supply chain is absolutely secured 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.