Iberdrola S A : Results Presentation

Results Presentation

Nine Months

October 21, 2020

Legal Notice

DISCLAIMER

This document has been prepared by Iberdrola, S.A. exclusively for use during the presentation of financial results of the nine-month period ended on 30 September 2020. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason without the express and prior written consent of Iberdrola, S.A.

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IMPORTANT INFORMATION

This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of (i) the restated text of the Securities Market Law approved by Royal Legislative Decree 4/2015, of 23 October; (ii) Regulation (EU) 2017/1129 of the European Parliament and of the Council, of 14 June 2017, on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC; (iii) Royal Decree-Law 5/2005, of 11 March; (iv) Royal Decree 1310/2005, of 4 November; and (v) their implementing regulations.

In addition, this document does not constitute an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, nor a request for any vote or approval in any other jurisdiction.

The shares of Iberdrola, S.A. may not be offered or sold in the United States of America except pursuant to an effective registration statement under the Securities Act of 1933 or pursuant to a valid exemption from registration. The shares of Iberdrola, S.A. may not be offered or sold in Brazil except under the registration of Iberdrola, S.A. as a foreign issuer of listed securities, and a registration of a public offering of depositary receipts of its shares, pursuant to the Capital Markets Act of 1976 (Federal Law No. 6,385 of December 7, 1976, as further amended), or pursuant to a valid exemption from registration of the offering.

This document and the information presented herein was prepared by Iberdrola, S.A. solely with respect to the consolidated financial results of Iberdrola, S.A. and was prepared and is presented in accordance with the International Financial Reporting Standards ("IFRS"). This document does not contain, and the information presented herein does not constitute, an earnings release or statement of earnings of Avangrid, Inc. ("Avangrid") or Avangrid's financial results. Neither Avangrid nor its subsidiaries assume responsibility for the information presented herein, which was not prepared and is not presented in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP"), which differs from IFRS in a number of significant respects. IFRS financial results are not indicative of U.S. GAAP financial results and should not be used as an alternative to, or a basis for anticipating or estimating, Avangrid's financial results. For information regarding Avangrid's financial results for the nine-month period ended on 30 September 2020, please see the press release Avangrid issued on the 20th of October, 2020, which is available on its investor relations website at www.avangrid.comand the Securities and Exchange Commission ("SEC") website at www.sec.gov.

In addition to the financial information prepared under IFRS, this presentation includes certain alternative performance measures ("APMs") for the purposes of Commission Delegated Regulation (EU) 2019/979, of March 14, 2019 and as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415es). The APMs are performance measures that have been calculated using the financial information from Iberdrola, S.A. and the companies within its group, but that are not defined or detailed in the applicable financial information framework. These APMs are being used to allow for a better understanding of the financial performance of Iberdrola, S.A. but should be considered only as additional information and in no case as a substitute of the financial information prepared under IFRS. Moreover, the way Iberdrola, S.A. defines and calculates these APMs may differ from the way these are calculated by other companies that use similar measures, and therefore they may not be comparable. Finally, please consider that certain of the APMs used in this presentation have not been audited. Please refer to this presentation and to the corporate website (www.iberdrola.com) for further details of these matters, including their definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS.

This document does not contain, and the information presented herein does not constitute, an earnings release or statement of earnings of Neoenergia S.A. ("Neoenergia") or Neoenergia's financial results. Neither Neoenergia nor its subsidiaries assume responsibility for the information presented herein. For information regarding Neoenergia's financial results for the nine-month period ended on 30 September 2020, please see the press release Neoenergia issued on the 20th of October, 2020, which is available on its investor relations website at www.ri.neoenergia.com and the Brazilian Comissão de Valores Mobiliários ("CVM") website at www.cvm.gov.br.

Results Presentation / Nine Months / 2020 / 2

Legal Notice

FORWARD-LOOKING STATEMENTS

This communication contains forward-looking information and statements about Iberdrola, S.A., including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words "expects," "anticipates," "believes," "intends," "estimates" and similar expressions.

Although Iberdrola, S.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Iberdrola, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Iberdrola, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the documents sent by Iberdrola, S.A. to the Spanish Comisión Nacional del Mercado de Valores, which are accessible to the public.

Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Iberdrola, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Iberdrola, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based on information available to Iberdrola, S.A. on the date hereof. Except as required by applicable law, Iberdrola, S.A. does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Results Presentation / Nine Months / 2020 / 3

Agenda

Highlights of the Period

Results Presentation / Nine Months / 2020 / 4

Highlights of the period

Adjusted Net Profit grows 8.8% and Reported Net Profit rises 4.7%, to EUR 2,681 M

COVID-19: Progressive normalization of market conditions

Record investments, up to EUR 6,638 M (+22.9%)

4,600 MW installed y-o-y and 7,600 MW under construction

Expanding our geographical footprint and creating new growth platforms

Adjusted EBITDA grows 3.2 %, to EUR 7,561 M

Reported EBITDA reaches EUR 7,345 M

Maintaining interim shareholder dividend of EUR 0.168 per share

100% PNM Resources transaction for ~ USD 4.3 Bn cash

Results Presentation / Nine Months / 2020 / 5

Corporate transaction

Avangrid-PNM Resources combination: accelerating growth in US

Iberdrola strategy

Growing renewables and regulated activities

Countries with high growths and good rating

Earnings per share accretion

Maintaining our financial strength

Adding to previous operations: Infigen, Aalto Power, Sweden and Japan…

Supporting future growth

Results Presentation / Nine Months / 2020 / 6

Corporate transaction

Avangrid-PNM Resources combination:

Electric utility in New Mexico and Texas

Avangrid Pro forma 2019 figures (USD M)	Iberdrola Pro forma 2019 figures (EUR M)1
EBITDA	2,453	EBITDA	10,601
Avangrid	1,867	Iberdrola	10,104
PNM	586	PNM	498
Net Income	846	Net Income	3,5262
Avangrid	673	Iberdrola	3,406
PNM	173	PNM	120

More than 3% EPS accretion for both companies

1USD/EUR exchange rate as of 6 October 2020 of 0,85

2 Including 81.5% of PNM Net Income as per Iberdrola share in Avangrid

Results Presentation / Nine Months / 2020 / 7

Business recuperation

Progressive normalization of market conditions

Monthly evolution electricity demand

Feb Mar Apr May Jun Jul Aug Sept (MTD)Oct

-2%

-2%

-9%

-18%

Feb Mar Apr May Jun Jul Aug Sept (MTD)Oct +1%

-2%

-9%

-16%

2021 forward price evolution

44.5

44.9

(€/MWh)	40.8
Feb Mar	Apr May Jun Jul Aug Sept	Oct
		(MTD)
41.8	46.9
(£/MWh)	39.7

Feb Mar Apr May Jun Jul Aug Sept (MTD)Oct

Results Presentation / Nine Months / 2020 / 8

Gross Investments

Accelerating investments up EUR 6,638 M (+23%) despite COVID-19 restrictions 54% of total investments allocated to renewables

9M Gross Investments by business

Generation &		1%	Corporate & other
7%	+1.9%
Supply
-21.1%

Renewables	6,638	38%
M EUR
+51.8%	Networks
54%		+5.5%

Gross Investments by quarter

(Bn Eur)

3.0

1.7 1.9

Q1

Q2

Q3

Q4

Reaffirming our target to invest EUR 10 Bn for 2020

Results Presentation / Nine Months / 2020 / 9

Installed Capacity

More than 4,600 MW of new installed capacity in the last 12 months…

…and 7,600 MW under construction of which around 1,000 MW offshore wind

Capacity under construction (MW)

Offshore wind	1,000
Onshore wind	2,200
Solar PV	2,700
Storage	1,250
(Hydro & Batteries)
Others	500
Total	7,650

More than 70,000 MW of pipeline

Results Presentation / Nine Months / 2020 / 10

EBITDA

Financial performance: adjusted EBITDA1 up +3.2%

Adjusted EBITDA by business

Generation

& Supply 27%

Networks

7,561

M EUR	49%

24%

Renewables

Networks

• Negative impact of new regulatory period in Spain, as expected
• Results in US affected by items reconcilable in US GAAP that will be registered in IFRS in future years
• Brazil: Higher contribution in Transmission offsets impact of COVID in Distribution
• Higher revenues in UK due to larger rate base

Renewables

• Impact of new capacity installed
• Wind: EA1 fully operational (UK); higher availability and more capacity (US)
• Hydro:higher production in Spain and Brazil with Spain´s reserve levels ~50% above previous year

Generation and supply

• Lower procurements with prices hedged

FX

• USD and GBP appreciation partly mitigates BRL performance
• FX impact: 90% hedged at net profit level

COVID impact of EUR 216 M at EBITDA level Adjusted EBITDA up 6.4% excluding FX impact

1Adjusted EBITDA = Reported EBITDA + COVID Impact - 2019 Non Recurrent items

Results Presentation / Nine Months / 2020 / 11

Operational efficiency

Net Operating Expenses improve by EUR 57 M…

Net Operating Expenses (EUR M)

-EUR 57 M

3.158

3.101

Q3 2019

Q3 2020

…even after considering EUR 43 M expenses1 related to COVID

1 Related mainly to donations of healthcare materials

Results Presentation / Nine Months / 2020 / 12

Financial Strength

Cash flow up 2.3%, driving an improvement of financial ratios

FFO / Adjusted Net Debt

+20 bp

21.9%

21.7%

Q3 2019

Q3 2020

Maintaining full access to capital markets

Results Presentation / Nine Months / 2020 / 13

Recovery plans and increasing investments

A massive opportunity ahead in our current markets

Emissions

55% reduction by 2030 VS 40%

Share of

65% renewables by 2030 vs 55%

40GW Hydrogen by 2030

140 Coronavirus recovery

Bn Eur fund by 2030	40GW	Offshore	4.9GW	Offshore wind auctions
72 Billion by 2023	wind by 2030	in NY & NJ in 2020 & 2021

• 37% Green Transition	vs 30

• 33% Digital Transformation

	1GW	Floating offshore	5.2GW	Offshore wind
	Hydrogen	wind by 2030		target in Virginia
4GW
strategy by 2030

8.9 Billion by 2030

Results Presentation / Nine Months / 2020 / 14

New growth platforms

Expanding our geographical footprint and creating new growth platforms

		Sweden: 9GW of offshore wind pipeline
	UK and Continental Europe:	France:
	• Acquisition of 118 MW of onshore wind and 636 MW
	Increase of renewable pipeline
	renewable under development
		• 100% ownership of Saint Brieuc offshore wind farm)
USA:		Japan: 3.3 GW of offshore wind pipeline

• PNM Resources
• Increase of renewable pipeline

Brazil:Increasing pipeline of renewables projects

Australia: Infigen

Adding 14,000 MW to pipeline (~90% offshore wind) for a total of more than 70,000 MW

Results Presentation / Nine Months / 2020 / 15

• RIIO T2 process ongoing.

• CMA draft decision rising on water companies

(Final decision by December)

• Auctioning of new offshore lease areas in England, Wales and Scotland up to 18 GW in 9 different areas

Other milestones

Multiple regulatory measures under development

• Electric vehicle program in NY
• New York rate case on track (tariffs applied retroactively from April)
• Interconnection with Canada progressing to start construction
• NY offshore auction up to 2,500 MW: bid submitted on October 20th

• BRL ~1,664 M Off-balance sheet COVID system loans paid by September
• Public Hearing about Extraordinary tariff review ongoing

Results Presentation / Nine Months / 2020 / 16

Agenda

Analysis of Results

Results Presentation / Nine Months / 2020 / 17

COVID impact / Group

Two main direct COVID impacts considered, totalling EUR 308 M in 9M 2020, …

	DEMAND(1)		BAD DEBT(2)
EUR M	Networks	Generation			Networks	Generation
	&Supply			&Supply
SPAIN	8	28		-	13
UK	23	34		-	27
US	61(3)	-		9	-
MEXICO	-	11		-	-
BRAZIL	30	2		31	-
IEI	-	19		-	12
TOTAL	122	94		40	52

• Demand (EUR 216 M) at EBITDA level and bad debt (EUR 92 M) at EBIT level

(1) Accounted for within EBITDA

(2) Accounted for in ProvisionsResults Presentation / Nine Months / 2020 / 18

(3) Includes EUR 59 M corresponding to the delay of NY Rate Case

COVID impact / Group

Several measures underway in order to offset COVID impacts

Networks

• Expected recovery of impacts in UK and US,
• and under negotiation in Brazil

Generation & Supply

• Bad debt impacts managed through commercial activity
• Proposal to OFGEM in UK for recognition of impacts in SVT

COVID Impact at Net Profit level by quarters

(EUR M)

136

50

17

Q1 Q2 Q3

Improving the impact in the second half of the year after removal of lockdown measures

Results Presentation / Nine Months / 2020 / 19

Income Statement / Group

Reported Net Profit grows 4.7%, to EUR 2,681.0 M. Adjusted Net Profit grows +8.8%

						9M 2020
	EUR M	9M 2020		9M 2019	%	% Adjusted
		(Adjusted)
	Revenues	24,248.0		26,457.5	-8.4
	Gross Margin	11,841.3		12,086.7	-2.0
	Net Operating Expenses	-3,100.9		-3,158.2	-1.8
	Levies	-1,395.2		-1,429.6	-2.4
	EBITDA	7,345.2		7,498.9	-2.0	7,561.5	+3.2
	EBIT	3,987.9		4,488.9	-11.2
	Net Financial Expenses	-640.8		-890.4	-28.0
	Non Recurring Results	514.7		122.4	n/a
	Taxes and Minorities	-1,161.6		-1,138.8	+2.0
	Reported Net Profit	2,681.0		2,560.9	+4.7	2,553.2	+8.8
	Operating Cash Flow	5,957.5		5,824.7	+2.3

Fx: USD +0.5%, GBP +0.3% and BRL -22.6%. With an impact of EUR -236 M at EBITDA level in 9M (vs EUR -92 M in H1)

Results Presentation / Nine Months / 2020 / 20

Results reconciliation

Adjusted results exclude main non-recurring impacts in 9M'19 and 9M'20, but not fx impact (EUR -236 M at EBITDA level at 9M 2020)

	EBITDA		Net Profit
7,561	-216		+485	-154	2,681
		2,553
	7,345	-203
+3.2%	-2.0%	+8.8%			+4.7%

2020	COVID	2020	2020	COVID	Siemens	Tax	2020
Adjusted	effect	Reported	Adjusted	effect	Gamesa	impacts	Reported
EBITDA		EBITDA	Net Profit				Net Profit

9M'19 Net Profit adjusted for LNG contracts sale (EUR 89 M EBITDA; EUR 66 M Net Profit), transfer of the fibre optic contracts (EUR 49 M EBITDA; EUR 123 M Net Profit) and settlements in Spanish Networks (EUR 33 M EBITDA; EUR 25 M Net Profit)

Results Presentation / Nine Months / 2020 / 21

Gross Margin / Group

Gross Margin falls 2.0%, to EUR 11,841.3 M, with a negative fx impact of EUR 343 M, …

EUR M

Revenues

-8.4%

EUR M

Procurements

-13.7%

26,457.5

24,248.0

14,370.8

12,406.7

9M 2019

9M 2020

9M 2019

9M 2020

• and grows 0.8% excluding fx impact

Results Presentation / Nine Months / 2020 / 22

Net Operating Expenses / Group

Net Operating Expenses improve 1.8%, to EUR 3,100.9 M, driven by cost containment, due to COVID and efficiency plans

EUR M	Net Operating Expenses
		9M 2019	vs 9M'19 (%)
	9M 2020
Net Personnel Expenses	-1,595.7	-1,598.1	-0.2%
Net External Services	-1,505.2	-1,560.1	-3.5%
Total Net Op. Expenses	-3,100.9	-3,158.2	-1.8%

Positive fx impact (EUR +108 M) compensates EUR -43 M of donations and other expenses, related to COVID

Results Presentation / Nine Months / 2020 / 23

Levies / Group

Levies fall 2.4%, to EUR 1,395.2 M, …

EUR M

+36-1

-1,430

-1,395

9M 2019	Spanish taxes on	Other	9M 2020
generation

… due mainly to lower prices in Spain

Results Presentation / Nine Months / 2020 / 24

Results by Business / Networks

Networks EBITDA falls 10.7%, to EUR 3,519.7 M

EBITDA by Geography (%)

Brazil 21%

34% Spain

3,519.7

Key Figures (EUR M)

		9M 2020	9M 2019	vs 9M'19 (%)
	Gross Margin	5,625.1	6,080.5	-7.5%
	Net Op. Exp.	-1,559.3	-1,606.9	-3.0%
	Levies	-546.1	-531.7	+2.7%

United 24% States

21% United Kingdom

EBITDA	3,519.7	3,941.9	-10.7%

EUR 122 M of COVID impact on demand and EUR 181 M of timing and storm effects in US

Results Presentation / Nine Months / 2020 / 25

Results by Business / Networks

Spain

US

EBITDA EUR 1,202.9 M (EUR -93.0M; -7.2%), due to the lower remuneration established for 2020 in the regulatory framework (EUR -44 M), the impact of transferring the fibre optic contracts in Q3´19 (EUR-49 M) and positive settlements accounted for in 9M 2019 (EUR -33 M).

EBITDA IFRS USD 935.1 M (USD -244.1 M; -20.7%), EBITDA US GAAP USD 1,037 M (-1.1%),driven mainly by USD -119M of IFRS adjustments as a consequence of differences in volumes and energy that, together with

the impact of Storm Isaias, will be recovered over the next years.

USD -68 M of COVID impact on demand, including USD -66 M of NY Rate Case delay, to be recovered from 2021 onwards.

Brazil EBITDA BRL 4,230.0 M (BRL +334.9 M; +8.6%), as results due to investments in transmission and efficiencies

compensate lower margins in distribution, affected by BRL -167 M of COVID impact on demand.

BRL 1.7 bn "off balance" COVID-account for NEO already collected.

UK	EBITDA GBP 646.6 M (GBP +20.7 M; +3.3%), with higher revenues, as a consequence of investments,
	partially offset by lower demand due to COVID (GBP -21 M), to be recovered in 2022.

Results Presentation / Nine Months / 2020 / 26

Results by Business / Renewables

Renewables EBITDA up 5.6%, to EUR 1,771.5 M, driven by the US and the UK

EBITDA by Geography (%)

IEI* 13%

Mexico 3%

Brazil 4%

1,771.5

United 26%

States

28%

26% Spain

United

Kingdom

Key Figures (EUR M)

			9M 2020	9M 2019	vs 9M'19 (%)
		Gross Margin	2,660.0	2,519.0	+5.6%
		Net Op. Exp.	-599.7	-569.8	+5.3%
		Levies	-288.7	-271.0	+6.5%
		EBITDA	1,771.5	1,678.3	+5.6%

Average operating capacity increases to 29,175 MW and installed capacity to 33,964 MW

*Iberdrola Energía Internacional, formerly RoW

Results Presentation / Nine Months / 2020 / 27

Results by Business / Renewables

UK	EBITDA GBP 442.8 M (GBP +141.3 M; +46.8%), due to higher production both in onshore
	(+4.3%) and offshore (+258.2%), as a consequence of the contribution from East Anglia 1, 714
	MW fully in operation since April 2020.
US	EBITDA USD 510.9 M (USD +42.4 M; +9.0%), driven by higher output (+14.5%), due to higher
	wind resource vs 9M'19 (+0.9 p.p.) and increase in average operating capacity (+695 MW)
Spain	EBITDA EUR 444.8 M (EUR -70.8M; -13.7%), due to lower sale price to the Supply business,
	despite higher output (+22.6%) driven by hydro production (+53.9%) and higher PV capacity.
IEI	EBITDA EUR 233.6 M (EUR -13.6M; -5.5%), due one-off costs related to business expansion.
	Aalto Power consolidated from the 1st of July and Infigen from the 5th of August.
Brazil	EBITDA BRL 449.1 M (BRL +2.9 M; +0.7%), with output increasing (+5.8%), as higher hydro
	production compensates the decline in wind output.
Mexico	EBITDA USD 62.2 M (USD -1.1M; -1.8%), lower load factor in wind (-0.8 p.p.) and PV (-1.6 p.p.)
	more than offsets higher average operating capacity (+53 MW).

Results Presentation / Nine Months / 2020 / 28

Results by Business / Generation and Supply*

Generation & Supply EBITDA up 10.3% to EUR 2,004.4 M,…

EBITDA byGeography((%)				Key Figures (EUR M)
	Brazil
	2%
					9M 2020	9M 2019	vs 9M'19 (%)
Mexico	29%				Gross Margin	3,571.7	3,482.3	+2.6%
61%
	2,004.4				Net Op. Exp.	-973.2	-1,036.8	-6.1%
	Spain
	Levies	-594.1	-627.8	-5.4%
United	8%
			EBITDA	2,004.4	1,817.7	+10.3%
Kingdom

• with EUR -94 M of COVID impact on demand

* 9M 2020 Pro-forma excluding Iberdrola brand intercompany transactions: Lib Spain EUR -67 M, Lib. IEI EUR +11 M, Corporate EUR +56 M. Neutral effect at Group level

Results Presentation / Nine Months / 2020 / 29

Results by Business / Generation and Supply

Spain*	EBITDA EUR 1,230.1 M (EUR +55.2 M; +4.7%)
	• Lower output 25,356 GWh (-11.3%), higher purchases at lower prices vs 9M 2019
	• Active management of customer portfolio: Energy + Smart Solutions
	• LNG contracts sale (EUR 89 M) in Q2 2019
Mexico	EBITDA USD 642.6 M (USD +2.4 M; +0.4%): production increase, due to new installed capacity, partially offset
	by temporary lower availability of one CCGT plant.
UK	EBITDA GBP 136.6 M (GBP +99.3 M; +265.6%): recovery as a consequence of improved margins vs 2019,
	despite fall in sales.
Brazil	EBITDA BRL 273.4 M (BRL +73.6 M; +36.8%): business normalization after the one-off effect that impacted
	results during 2019.
IEI*	EBITDA EUR -2.9M (EUR +11.4 M; +79.6%): improving but still affected by initial development costs.
	Reaching 1,741,000 contracts.

• 9M 2020 Pro-forma excluding Iberdrola brand intercompany transactions: Lib Spain EUR -67 M, Lib. IEI EUR +11 M, Corporate EUR +56 M. Neutral effect at Group level
  Results Presentation / Nine Months / 2020 / 30

EBIT / Group

Group EBIT falls 11.2%, to EUR 3,987.9 M, with Depreciation growing 8.7% due to higher asset base

D&A and Provisions (EUR M)

	9M 2020	9M 2019	vs 9M'19 (%)
D & A	-2,987.5	-2,748.6	+8.7%

	Provisions	-369.8	-261.5	+41.7%
	TOTAL	-3,357.3	-3,010.1	+11.5%

Provisions up +41.7%, including EUR 92 M of bad debt provisions: EUR 40 M in Networks, mostly in Brazil, under negotiation to be recovered, and EUR 52 M impact in Generation and Supply, a manageable amount through commercial activity

Results Presentation / Nine Months / 2020 / 31

Net Financial Expenses / Group

Net Financial Expenses improve by EUR 250 M to EUR 640.8 M, due to one-off fx hedges and lower cost, …

Net Financial Exp. evolution (EUR M)		Cost of Debt
-890.6	+117.9	- 48.8	+ 180.8
			-640.8
			3.57%*
					-42 bps

3.15%

Sept 2019	Cost	Avg. debt	Fx and	Sept 2020	Sept 2019	Sept 2020
other

…. despite higher average debt

* Sept'19 restated including the cost of currency swaps linked to debt already included in Sept'20	Results Presentation / Nine Months / 2020 / 32

Adjusted Net Debt / Group

Strong credit metrics

	Adjusted credit metrics			Adjusted Net Debt* (EUR M)
	Sept 2020***	Sept 2019**
		37,883
		3.8x	3.6x
	Adjusted Net Debt* / EBITDA	1,030*
			36,518
	FFO / Adjusted Net Debt*	21.9%	21.7%
	RCF / Adjusted Net Debt*	19.9%	20.2%
	Adjusted Leverage*	45.5%	43.9%	Sept 2019**	Sept 2020

* Infigen (EUR 854 M) and Aalto Power (EUR 176 M)

On a like-for-like basis, FFO / Adjusted Net Debt improves 0.2 p.p. vs 2019

* Adjusted by market value of potential treasury stock cumulative hedges (EUR 700 M at Sep 2019 and EUR 961 M at Sep 2020)

** Restated including full IFRS16 criteria as considered in Dec19
*** Excluding provisions for efficiency plans, proforma including Infigen 1 year	Results Presentation / Nine Months / 2020 / 33
TEI financing not included (EUR 253 M at Sept 2019 and EUR 419 M at Sept 2020)

Liquidity and debt diversification / Group

Liquidity totals EUR 13,8 bn, covering 30 months of financing needs

	Liquidity: EUR 13,814 M	Bank loans
		12.2%
	Cash	Leases
	2,067	4.6%
		Structured
		1.1%
	Available	Multilateral
	Loans	11.3%
Backup	2,141
Lines
7,300		Commercial
		paper
		8.4%
	Credit Lines	BRL Bonds
	4.0%
	2,306	GBP Bonds
			8.0%

Highly diversified sources of finance facilitates market access

EUR bonds

31.6%

USD bonds

18.9%

Results Presentation / Nine Months / 2020 / 34

Net Profit / Group

Reported Net Profit up 4.7%, to EUR 2,681.0 M, and Adjusted Net Profit +8.8% …

EUR M	9M 2020	9M 2019	vs 9M'19 (%)
EBIT	3,987.9	4,488.9	-11.2%
- Net Financial Expenses	-640.8	-890.4	-28.0%
- Equity Method	-19.3	-21.1	-8.8%
- Non Recurring Results	+514.7	+122.4	n/a
- Corporate Tax	-954.5	-888.5	+7.4%
- Minorities	-207.1	-250.3	-17.3%
Reported Net Profit	2,681.0	2,549.5	+4.7%

• as previously explained in page 21 of this presentation

Results Presentation / Nine Months / 2020 / 35

Agenda

Conclusions

Results Presentation / Nine Months / 2020 / 36

Conclusions: nine months results

Reported Net Profit of EUR 2,681 M, up 4.7% and Adjusted Net Profit grows 8.8%

Gross investments reach EUR 6,638 M (+23%)

4,600 new MW in the last 12 months with 7,600 MW under construction

Maintaining financial strength (13.8 Bn of liquidity)

…despite COVID impacts (EUR 203 M)

Results Presentation / Nine Months / 2020 / 37

Conclusions: 2020 Outlook

Improved results in second half of the year

after softening of COVID-19 measures

Net Profit by quarters
(EUR M)
1.257
964		917	905
		836
	680
	588
Q1	Q2	Q3	Q4
	2019	2020

Investment acceleration

New capacity

New Rate cases

Cost savings

Lower COVID-19 impact

Net Profit to accelerate

driven by operating performance and higher investments

Results Presentation / Nine Months / 2020 / 38

Conclusions: 2020 Outlook

Strong underlying business performance thanks to our diversified model

• maintaining Net Profit guidance at mid / high single-digitgrowth…

…and maintaining shareholder remuneration policy:

interim shareholder remuneration of EUR 0.168 per share

Results Presentation / Nine Months / 2020 / 39

Agenda

Annex: "Iberdrola Retribución Flexible"

program January 2021

Results Presentation / Nine Months / 2020 / 40

"Iberdrola Retribución Flexible" program: January 2021

20

October

Closing prices considered for determining the average price used to calculate number of rights and interim dividend amount

31 December 4, 5, 6 and 7

January

8 January

• Last day to buy IBE
  shares and participate in

scrip and/or receive the	Last day of rights	- Delivery of shares
dividend in cash
- Announcement of capital	trading period and	- Payment of interim
increase in BORME	of the common	dividend
	election period

11 January		26 January		8
		February

Trading period

12		2
January		February

Commencement of the trading of the newly issued shares

10

February

• Board Agreement for the execution of the capital
  increase and interim dividend payment

	- Commencement of the	- Closing of scrip issue
- Chairman and CEO sets	- Relevant fact
trading period and of the
interim dividend	common election period
- Relevant fact	- Ex date (scrip and cash
- Publication of the number of	dividend)
rights/share and interim DPS
		Results Presentation / Nine Months / 2020 / 41