Iberdrola reaffirmed its role as a driver of decarbonization, economic recovery and job creation during the first half of the year, after making record investments of €4.9 billion, 37% more than in the same period of the previous year. This investment effort also contributed to the company's unprecedented expansion strategy in markets such as Europe, America and Asia Pacific. More than 90% of investments were allocated to renewables activities (45%) and networks (46%). By markets, more than half went to the United States (27.1%) and Spain (25.4%). Investment in the Iberdrola International business area grew and represented 18.8% of the total, while Brazil received 14.5% and the United Kingdom 12%.

The Chairman of Iberdrola, Ignacio Galán, said that "improved health conditions have enabled us to accelerate investment in grids, renewables and storage, promoting economic activity and helping to create quality jobs around the world. The results presented here are the fruit of an unprecedented investment effort."

Between January and June 2021, the company achieved a gross operating profit (Ebitda) of €5.44 billion (+10.2%) (up 15%, excluding the impact ofCOVID-19and the exchange rate). 85% of the total came from networks and renewables with 80% generated in countries with A rating.

Ebitda from networks grew by 10.6%, to €2.56 billion, after improved performance and an increase in distributed energy in all the markets where the company operates, specifically Brazil, which completed the integration of the distribution company in Brasilia, ramping up investment. Excluding the negative impact of COVID-19 and the exchange rate on this business, Ebitda would have grown by 18.5%.

Renewables increased its Ebitda in the period by 63%, to €2 billion, driven by the increase in production, greater installed capacity provided by its investment plan and higher load factors. The area also reflects the positive impact of the reversal of the hydroelectric levy for 2013 and 2014 in Spain.

Generation and Supply recorded an Ebitda of €803.3 million (-40.9%) and is mainly impacted by high prices in the Spanish electricity market and the effects of extreme cold weather in Spain (Filomena) and Texas, in the United States.

Adjusted net profit, which excludes the extraordinary results recorded in 2020 - such as capital gains from the sale of the Siemens Gamesa stake (€485 million) - stands at €1.84 billion, up 8.4%. As a result of the announced increase in UK corporate income tax from 19% to 23%, which affects deferred tax liabilities, a provision of €465 million was required. In addition, following the Supreme Court ruling of 23 April, the reversal of the hydroelectric levy for 2013 and 2014 in Spain, for an amount of €245 million, is included. Thus, reported net profit stands at €1.53 billion.

Ongoing investment plan: more renewables, more networks and new markets

Iberdrola's investment plan allowed for the company's renewable operating capacity to grow over the six- month period and it now exceeds 35,600 MW. In the last 12 months, Iberdrola has commissioned 2,960 MW of new green capacity, of which 1,950 MW are onshore wind, 930 MW solar photovoltaic and 80 MW battery storage.

The company, which expects to end the year with an additional 4,000 MW in operation, is currently progressing with the construction of 8,500 MW. By geographies, 1,700 MW (20%) is being built in Spain,Iberdrola Energía Internacionalis constructing 2,860 MW and 2,750 MW are under construction in the United States. At present, the company has 1,050 MW of green capacity under construction in Brazil, and 150 MW in the United Kingdom, of which 100 MW are battery storage.

Iberdrola has committed to install and commission a total of 27,600 MW in the period 2020-2025, with the aim of reaching 60,000 MW of renewable capacity. As of June 2021, nearly 22,000 MW are under construction or in advanced development, meaning that 80% of the new capacity planned in that period is assured.

As of June, the group's project pipeline amounts to 81,500 MW, of which 25,200 MW are offshore wind; 15,500 MW onshore wind; 36,600 MW photovoltaic; 3,400 MW hydro and 1,100 MW batteries. Opportunities for offshore wind growth include new markets such as Japan, Poland, Sweden, Ireland, Korea, and Taiwan as well as traditional European markets (Iberia, United Kingdom, Germany, France and Italy), the United States and Brazil.

To support this phase of expansion, Iberdrola has accelerated the procurement process - which has amounted to €18 billion since the beginning of the pandemic - contributing to sustaining some 400,000 jobs across the company's global supply chain.

Growth platforms: offshore wind, PNM Resources, alliances, and smart solutions

One of the group's main growth platforms is the development of offshore wind projects. The company already operates more than 1,300 MW and is progressing on schedule with theSaint-Brieuc(France, 496 MW), Vineyard Wind 1 and Park City Wind (United States, 800 and 804 MW respectively) projects. As well as Baltic Eagle (Germany, 476 MW) in order to double its offshore wind capacity in the coming years.

Iberdrola's strategy in offshore wind will be boosted by the auction processes planned in the short term in key markets: Europe (37,000 MW between 2021-2022), US and Asia Pacific (13,800 MW by 2024).

The United States is another growth market, with the acquisition of PNM Resources set to be completed before the end of the year. The only pending approval, from New Mexico's regulator, is now expected in September. This will consolidate Iberdrola as one of the largest electricity distribution companies in the North American industry and the third largest operator of renewable energy.

Company alliances are also advancing the process of decarbonization of the economy, as well as the reactivation of industry and employment. Iberdrola continued to incorporate new partners, such as MAPFRE to co-invest in renewable projects in Spain and the companies Total and Shell in offshore wind. It also sealed agreements with Fertiberia, Cummins, BP, Porcelanosa, Diageo and Foresa in green hydrogen and promoted alliances for electrification and electric mobility, among others, with Volkswagen, Renault, Irizar and the smart charging solutions company Wallbox which it also supports as a shareholder.

Smart solutions for customers also point to growth opportunities, highlighting the expansion of smart solutions in electric mobility, and residential: Smart Mobility contracts have grown nearly three-fold; Smart Solar contracts have more than doubled; and Smart Home and Smart Climate has grown 1.2-fold and 1.4- fold, respectively.

KeyFacts Energy: Iberdrola Energy Spain country profile