The Chairman of Iberdrola, Ignacio Sánchez Galán, has announced that the company will invest 47,000 million euros between 2023 and 2025 to promote the energy transition, employment and the objective of reducing its own net carbon emissions. This is the transversal axis of the strategic plan between 2023 and 2025 that the company announced this Wednesday during the presentation of its Capital Markets Day, which is held in London this Wednesday.
The main investment focus will be in the USA. Having overcome the legal problems in Spain that prevented operations such as the integration with the Texas company PNM Resources, Iberdrola is once again focusing on the country that it identifies as the "main expansion market for next three years." 47% of the announced investment will go to the US for both organic growth and integration with PNM Resources, which is expected to be unlocked in 2023.
Second in importance is the United Kingdom, with 16%. In addition, Iberdrola promotes geographic diversification through an additional focus on countries such as Germany, France and Australia, to which it will allocate 13% of the total investment.
In Spain, investments will exceed 6,000 million euros in three years, 13% of the total, in line with the average of recent years.
“The world of 2022 has very little to do with the one we envisioned at the beginning of 2020 when we designed our strategic plan. Our long-term strategy is proving more appropriate than ever in the current scenario. Following our sustainable growth model, we are improving our financial strength and increasing our EBITDA and net profit prospects for 2025, in addition to maintaining our long-term prospects until 2030. This strategy will allow us to add more value to our shareholders and to the communities we serve”, assured Sánchez Galán.
In this framework, Iberdrola hopes to close 2022 with a net profit of between 4,000 and 4,200 million, which represents an increase of 29% compared to this year.
For the rest of the years covered by the strategic plan, the company has drawn a gross operating profit (ebitda) of between 16,500-17,000 million euros by 2025, which represents an average annual growth between 8% and 9%. Of these, 31% will come from Spain.
In addition, the company estimates that net profit will increase to a range between 5,200 and 5,400 million euros in 2025, which represents an average annual growth of between 8% and 10%.
These results will allow the company to fulfill its commitment to increase the remuneration to its shareholders in line with the evolution of the results and allocate between 65% and 75% of the profit to dividends -pay out, in English-, which will allow reaching a dividend of between 0.55 and 0.58 euros per share in 2025. Iberdrola sets a dividend floor of 0.46 euros between 2023 and 2024 and 0.50 euros for 2025, within the Iberdrola Flexible Remuneration program, which includes the repurchase of titles.
The president has also reaffirmed the prospects for 2030, driven by growth in all markets and the acceleration of electrification: investments of 65,000 to 75,000 million euros between 2026 and 2030 to exceed 100 GW of installed capacity and 65,000 million euros in network assets.
By business areas, networks will be the main engine of growth and 27,000 million will be allocated to them. It is followed by the commitment to the renewable energy business, for which it is planned to invest 17,000 million euros.
Sánchez Galán has assured that "the networks are the backbone of the integration of the new renewable capacity and will allow the implementation of new solutions and distributed services". With investments in this area, the company ensures predictable frameworks and protection against macroeconomic uncertainty. This commitment will allow it to reach a regulated asset base of 56,000 million euros in 2025, which represents a growth of 44% compared to the 39,000 million estimated for this year.
85% of the organic investments in this area are practically guaranteed, since they are carried out in projects with rates already closed or with advanced negotiations and with known conditions. Around 20% of the investments in transmission will go to the United Kingdom, the United States and Brazil.
The company intends to allocate around 17,000 million euros to the renewables business, focusing growth on high-quality, insured projects with the best risk-return ratio. Of this amount, 46% will focus on offshore wind power in France, Germany, the United Kingdom and the United States. In the rest of the technologies, onshore wind power will monopolize 25% of the investment, photovoltaic 24%, hydro, 2% and batteries, 3%.
As a result of these investments, the company will increase its renewable installed capacity by 12,100 megawatts, reaching 52,000 MW in 2025 -3,100 MW of onshore wind, 6,300 MW of photovoltaic, 1,800 MW of offshore, 700 MW of batteries and 200 MW of hydro-, compared to the 40,000 MW planned for this year. The group already has 50% of the new capacity guaranteed and around 95% of production will be contracted by 2025.
