Iberdrola forecasts a dividend between 0.55 euros and 0.58 euros for 2025
Iberdrola is advancing in its global growth with investments of 47,000 million euros during the period 2023-2025 to boost the energy transition, employment and net zero emissions. This was announced by the company at the presentation of its Capital Markets Day, which was held on Wednesday in London. As a result of this plan, among other objectives, such as the creation of 12,000 jobs, the electricity company chaired by Ignacio Sánchez Galán plans to pay a dividend of between 0.55 and 0.58 euros by 2025.
As explained by the group’s executive chairman, Ignacio Galán, the growth of this strategic plan is based on organic investments in all markets and the PNM Resources transaction, to which it will allocate 11,000 million euros.
Iberdrola’s executive chairman, Ignacio Galán, said: “The current situation of the sector is an opportunity for Iberdrola to continue contributing to self-sufficiency and decarbonisation in the countries where we are present and that is why we are going to invest a record 47,000 million euros over three years”, said the chairman.
Specifically, of the 47 billion euros of investment, 80% will be allocated to countries with an A rating, with stable regulatory frameworks and ambitious electrification targets. By country, the group will allocate 47% of its investments to the United States – including organic investments and the integration of PNM Resources – which is the main expansion market for the next three years. In second place is the United Kingdom, with 16%. Iberdrola is also promoting geographic diversification through an additional focus on countries such as Germany, France and Australia, to which it will allocate 13% of 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. With this investment approach, the company will contribute to the employment of 85,000 people in Spain by 2025.
GROWTH IN PREDICTABLE AND SECURE MARKETS
Analysing the main investments by business area, Iberdrola will allocate 27 billion euros to grids and 17 billion euros to renewables. “Over more than two decades, we have built a strong track record of performance and our plans ensure that Iberdrola will continue to be at the heart of delivering the smart grid and renewable energy improvements that the energy transition needs around the world,” said the chairman.
For the company, grids are the backbone of the integration of new renewables capacity and will enable the implementation of new distributed solutions and services. By investing in this area, the company is ensuring predictable frameworks and protection against macroeconomic uncertainty. This commitment will enable it to reach a regulated asset base of 56 billion euros in 2025, which represents a 44% growth compared to the 39 billion euros estimated for this year.
85% of organic investments in this area are practically assured, as they are made in projects with tariffs already closed or with advanced negotiations and known conditions. Around 20% of investments in transmission projects 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 assured, high quality projects with the best risk/return ratio. Of this amount, 46% will be focused on offshore wind in France, Germany, the United Kingdom and the United States. In the remaining technologies, onshore wind will account for 25% of the investment, photovoltaic for 24%, hydroelectric for 2% and batteries for 3%.
As a result of these investments, the company will increase its installed renewable capacity by 12,100 MW to 52,000 MW in 2025 – 3,100 MW onshore wind, 6,300 MW photovoltaic, 1,800 MW offshore, 700 MW of batteries and 200 MW of hydro – compared to the 40,000 MW planned for this year. The group has already secured 50% of the new capacity and around 95% of production will be contracted by 2025.
FINANCIALLY SOUND FORECASTS
This entire strategic plan is orchestrated within the framework of a careful financial soundness, which allows the company to preserve its credit rating levels. This is thanks to Iberdrola’s highly diversified sources of financing and business – 70% of EBITDA will come from the international area -, a solid financial structure – 75% of debt is fixed-rate and long-term -, active liquidity management and optimisation of green financing, with no capital increases planned and with the support of asset rotation. As a result, the company will maintain its financial strength: the net debt/EBITDA ratio will stand at 3.4x at the end of the period.
“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 outlook to 2025, as well as maintaining our long-term outlook to 2030. This strategy will enable us to deliver more value to our shareholders and the communities we serve,” commented the chairman.
The new investments planned for the period 2023-2025 allow Iberdrola to forecast gross operating profit (EBITDA) of between 16,500-17,000 million euros by 2025, representing average annual growth of between 8% and 9%. Spain will account for 31% of EBITDA. In addition, the company estimates that net profit will increase to between 5.2 and 5.4 billion euros by 2025, representing average annual growth of between 8% and 10%.
SHAREHOLDER REMUNERATION
These results will enable the company to meet its commitment to increase shareholder remuneration in line with the evolution of results and to allocate between 65% and 75% of profits to dividends, which will enable it to achieve 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 programme, which includes the repurchase of shares.
The chairman also reaffirmed the outlook for 2030, driven by growth in all markets and the acceleration of electrification: investments of 65-75 billion euros in 2026-30 to exceed 100 GW of installed capacity and 65 billion euros in network assets.
LEADING THE SOCIAL AND ENERGY TRANSITION
Environmental and social factors are fully integrated in today’s Strategic Plan. “In difficult economic times, our plan will also be a catalyst for job creation. We will hire around 12,000 people over the next three years, and by 2030 we anticipate that our activities will support more than 500,000 jobs globally across our supply chain,” stressed the Chairman. Of this figure, more than 85,000 jobs will be in Spain.
Iberdrola continues to advance in its commitment to energy self-sufficiency and in its proactive role as an active agent in the fight against climate change. In fact, as part of the Strategic Plan, the company intends to make its growth in renewables and grids compatible with the goal of becoming carbon neutral by 2030 in its generation plants and its own consumption and in all its activities by 2040. Iberdrola will also have a net positive impact on biodiversity by 2030. To achieve this, the company will promote the planting of 20 million trees by 2030.
