Iberdrola, S.A. (IBE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. First of all, thank you very much for joining us this morning. It is with great pleasure that we welcome you to the presentation of our 2022 Capital Markets and ESG Day, in which we are pleased to update for you our expected period about 2023 to 2025. We would also like to thank [indiscernible] for allowing us to hold this event in its excellent London offices. The agenda of the day has been already shared to all of you. First of all, we are going to start with the intervention of our top management, the Executive Chairman, Mr. Ignacio Galán; the CEO, Mr. Armando Martínez; and finally, Mr. Pepe Sainz, our CFO. Their speeches will be followed by the Q&A session. First, we will take the questions we received from the floor, and then those asked via the web. We would also to remind you that the whole event can be followed online as well through our web page, www.iberdrola.com. After this set of presentation together with a period from the lunch around noon, we will be pleased to invite you to enjoy several ESG presentation given by the heads of the different topic: ESG, innovation and sustainability, HR and social matters, governance and compliance and finally, cybersecurity. Hoping that you will find the day with us informative and productive. Now without further ado, I will hand over to our Executive Chairman, Mr. Ignacio Galán. Thank you very much again for your interest in Iberdrola. Please, Mr. Galán.

Good morning, everyone, and thank you very much for attending this Capital Market Day. I think it's a real pleasure to see you face-to-face here in London 3 years after our last in-person Investor Day. Over this period, we have been full of activity and growth for the company, for Iberdrola. We have maintained all our channels open, trying to keep you informed as much as possible. It has allowed us to continue receiving your questions and feedback, we appreciate strongly, as you know, but it's nothing better like the personal contact. Today, we'll present our Iberdrola current position and prospects, our -- target for 2025 and share with you our long-term vision. The current context is proving the success of our vision developed along the last 20 years. The external dependency resulting from today's energy model based on fossil fuels has led us to unprecedented energy crisis particularly in Europe. I said this before, energy is not electricity. 75% of final energy demand still comes from fossil fuels when we already have the technology to replace them with clean and competitive electricity. The situation is only reaffirming the need to accelerate electrification. In the long term, the international agency of Bloomberg New Energy Finance are already predicting that power demand will double by 2040 driven by all sectors, from transport, where consumption would multiply by 40 to 60x in the next 20 years to buildings as higher energy efficiency and heat pumps and electric heating networks will almost double this year of electricity, reaching 60% of the total or industry, both through direct electrification with green hydrogen with -- according to -- we need -- could require 10,000 terawatt hours of additional renewable production globally by 2040, equivalent to the combined demand of today, China and U.S. together. Covering all these will require multiplying renewable production by 5 to 6x, driving onshore wind capacity to increase up to 8x to 2040 and offshore wind by 20x. Massive investment in transmission and distribution network will need to support all these renewable growth, multiply current investment level by 3.5 to -- in the next 20 years. This energy prospect lead us to reaffirm today our long-term proposition. The solution of energy transition is a unique opportunity to create even more value to shareholders and continue delivering our social dividend, bringing more self-efficiency and increasing resiliency against potential energy shocks by reducing the dependence in oil and gas imports, putting on the right track to the net zero. In accelerating the exit to the current economic crisis, we knew a stronger economic model that will bring industrial development, more competitiveness and more affordable energy for all. But in the focus on the next 3 years, the economic consequences of the pandemic and the very special invasion of Ukraine led to lower economic growth expectation, inflation levels are not seen for the last -- for more than 30 years in Europe and United States, higher interest rates, currency instability and volatile commodity prices. In this context, governments, central banks and regulators had reacted to this situation with several measures, as you know very well. In other words, the world in 2022 is very different compared to 2020 when we presented our previous plan. Iberdrola is facing this situation -- case of growth strategy, focusing high rate countries with a clear energy policy, increasing geographical diversification with long-term predictable investment base in network infrastructures and renewables and no trading activities. We think conservative financial policy, this strategy that has -- it was conceived in long term, but is proving more appropriate than ever in the current scenario. Having said that, given short-term volatility in financial and energy market, our primary target for the next 3 years will be to reinforce even more our financial solidity with financial discipline, focusing on growth, on networks as well as renewable through selective investment. We will take advantage of the increasing investment needs in transmission and distribution in all our markets where we have predictable frameworks that include incentives to outperformance a significant protection against macro uncertainties, benefiting for our leading position in renewables driven by our skill in construction and operation in our competitive and diversified pipeline. This will allow us to focus on projects with the best risk-reward profile, maintaining additional optionality for future growth on asset rotation. We'll also improve our geographical footprint, reinforcing our presence in current markets and increasing our investment in A rating countries with ambitious decarbonization target and regulatory stability like Germany, France and Australia. And as mentioned, we are reaffirming our full commitment to financial strength. I think you will listen to me this during my speech, and to most ambitious environmental social and government standards. Following this sustainable growth model today, we are increasing our 2025 outlook for EBITDA, net profit, improving at the same time our financial solidity and maintaining our long-term prospect for 2030. All these targets are based on solid grounds, conservative and realistic assumptions as Pepe and Armando will explain later, and the credential of a model maintained over the last 2 decades with a stable principle but flexible execution that has driven strong performance in periods of economic growth and also during crisis, a model driven by innovation, thanks to internal skills and a strong network in suppliers and partners that give us access to the best new technologies in fields like artificial intelligence applied to smart grids, fixed and floating offshore wind or green hydrogen. We apply this model across all our geographies for more -- in more than 20 countries in the European Union, the United States, U.K., LatAm and now also Australia, combining predictable growth, diversification, a strong pipeline of projects. Thanks to financial discipline, we maintain full access to financial market with a leading presence in green and sustainable financing. Our performance in the last decade also shows the value creation for shareholders is fully compatible with an increasingly positive impact in our communities. This is the rationale behind our commitment to social dividend that you know is included in our bylaws. They will continue inform in coming years. Delivering this value proposition will require stable and predictable frameworks. Based on current energy policies capable of transforming next -- of commitment into clear rules to secure huge investment in clean energies and an attractive network regulation to deliver the transmission and distribution infrastructure needed. The transformation of energy system, driven by renewables also demands improvement in market design, creating investment signals to reward reliability, for instance, through capacity mechanism and promoting long-term contract and PPA to stabilize prices, especially cross-border PPAs as well. As you know, we also need more agile administrative procedures, avoiding the creation of bottlenecks, permitting of renewables and networks projects and a rational design of taxation and subsidies to promote investment in key technologies like green hydrogen. Many of these features, like clear and stable framework for network activities are already present in our markets. We -- and we see positive development in some others. To give you just three examples, Australia is moving forward in the implementation of emission reduction goals with many states seeking specific targets for renewables and networks. In United States, the inflation reduction act is providing long-term visibility to renewables and creating relevant incentives for green hydrogen. And European Commission is taking measures to accelerate permitting process. Probably today, it's going to be announced, some bill on that one, starting the process for new electricity market design. Ultimately, in the next months, we also expect more clarity in the short-term measures recently implemented in many countries. For this reason, we have taken conservative assumption in our plan, as Pepe and Armando will explain. If in any case, we expect these measures will not remain by 2025. Based in this context, in our strategic pillars, our investment will reach EUR 47 billion, record -- in 3 years between 2023, 2025, including organic and around EUR 12 billion per annum. And the PNM resources transaction will expect growth by mid-2023. 57% of the total investment will be allocated to networks and 43% production customers, mainly in renewable projects. With more than 80% of the total investment directed to A-rate countries, being United States, the first investment destination with 47% or 34% without considering PNM. The U.K. will represent 20% of our organic investment; Spain and Brazil around the 15%; and the remaining 15% will be mainly allocated to Germany, France and Australia. Growth investment reached 84% with just 60% corresponding to maintenance only. In networks, EUR 27 billion investment will drive a 44% increase in our asset base, reaching EUR 56 billion by 2025. 41% of network assets will correspond to the United States after receiving almost 2/3 of the total investment included PNM. The U.K. will represent 22% of our asset base, supporting by the RIIO T2 and RIIO-ED2 frameworks, an initial investment in the future growth project like Eastern Link. 21% of the total asset base will be in Brazil due to increasing investment in distribution to support growth in demand and increased resiliency as well as 8,500 kilometers of transmission lines already awarded in construction in Energia. And finally, in Spain, we represent 60% of the total network asset base by 2025. 85% of our organic investment in networks will be driven by tariff framework [indiscernible] negotiation with a key condition already known. And we will obtain additional growth from investment in new transmission, which account for 20% of the total of this business. And from the PNM resources transaction, as we announced, this deal will be accretive from today, 1 with a very moderate contribution to the group net profit up to 2025, accelerating in the second half of the decade to become a key platform to our grid in the high-growth state in New Mexico and Texas, due to their ambitious decarbonization target, a significant investment opportunities. Moving to renewables. Our plan considered investment of more than EUR 17 billion, almost allocated 50% to offshore wind, reinforcing our leadership in a high value-added technology capable of delivering 4 to 5x the build up per megawatt of solar PV or 2, 3x more than onshore wind. In the next 3 years, we'll put in operation 100-megawatt of offshore wind farm in the United States, Saint-Brieuc 500-megawatt facility in Brittany, Baltic Eagle in Germany, which will add 500-megawatt to our hub in the Baltic Sea. All of them are already under construction and progressing on track. Additionally, by 2025, we will have around EUR 3 billion in our balance sheet corresponding to offshore wind assets. They will be in operation in 2026, 2027 mainly East Anglia Three only in the U.K. and Windaker in Germany. The remaining investment will be mostly allocated to onshore technologies, 25% onshore, adding 3,500 megawatts and 24% to solar PV delivering 6,000 new megawatts. In both cases, new capacity will be spread across Spain, other European countries, the U.K., United States and Brazil. In Australia, where we will invest close to EUR 1 billion in wind, solar PV and hybrid projects. The remaining 5% will be allocated to pump storage and batteries in the U.K. and Iberia, adding almost 1 gigawatt of new capacity. All in all, we will increase renewable installed power by 12 gigawatts, reaching 52,000 megawatt by the end of 2025. Of the 12 gigawatt, we are adding 50% of the already secured and for the remaining 6 gigawatt, we have a pipeline of mature projects of 25 gigawatts. In other words, for each new megawatt expected by 2025, we already have 4-megawatt of well-advanced projects. In addition, by 2025, 90% of our output will be contracted through different route of market with merchant production representing only 5%. We will deliver all this growth, improving even more our operational efficiency through a further optimization of renewable project design on the creation of hubs to benefit from synergies and scale, for instance, in New England, East Anglia or in the Baltic Sea for offshore wind development. On top of this, we will implement new close business initiative base on the standardization of process and digitalization. And we will increase our training and qualification activities. As a result, we expect to continue improving our net operating expenses to gross margin ratio by almost 150 basis points, delivering EUR 350 million annually by 2025. Investment and efficiency will drive an increase of EUR 3.5 billion to EUR 4 billion EBITDA, reaching EUR 16.5 billion to EUR 17 billion by 2025, with an annual growth rate of 8% to 9% approximately. This compared to the EUR 15 billion estimate by 2025, 2 years ago. We expect EBITDA to be equally split between networks and production and customers with 70% coming from international activities, mainly in the United States, Brazil and the U.K as well as other countries like France, Germany or Australia, which together will contribute 7% to consolidated EBITDA by 2025. Net profit will reach from EUR 5.2 billion to EUR 5.4 billion by 2025, increasing by EUR 1.2 billion from 2022 at an annual rate to 8% to 10% increase and targeting a return on equity around 10%. Again, this compared to EUR 5 billion we expected according to the previous outlook. We will deliver all this putting financial strength, again I insist on this word, as a key priority. To this end, we will continue implementing our green financial model based on a fixed rate debt accounting 70% -- 75% by 2025 with an average maturity of 6 to 7 years in active liquidity management. This, together with a cash flow generation capacity and our ongoing policy of asset rotation and partnership will drive strong financial ratios through the plan, reaching net debt-to-EBITDA of 3.4x by 2025 with no capital increase expected along the period. Shareholder remuneration will continue to be another pillar of our plan with a payout ratio between 65% or 75% of earnings per share which, according to our estimate, will lead to a dividend per share of approximately EUR 0.55 to EUR 0.58 by 2025. In addition, we are setting a new dividend floor of EUR 0.46 per share in 2023 and 2024, increasing this floor to EUR 0.5 in 2025. And we will maintain optionality for our shareholders through the Iberdrola Retribución Flexible with included share buybacks to avoid dilution. Following our commitment to social dividend, our plan also include a specific target and indicators related to environmental, social and governance factors, targets that are measurable, transparent to all shareholders, reaffirming our determination to be an active player in the creation of a more sustainable and inclusive model for future generations. Today, we are announcing an additional step in our ambitious decarbonization strategy with the target to become carbon neutral by 2030 in Scope 1 and 2 and net zero in 3 Scope before 2040. And in terms of biodiversity protection, we aim to become net positive neutral already in 2030. Our activities will also drive positive social impact to our communities with 12,000 new hires in the next 3 years and targeting to support more than 500,000 jobs in our supply chains by 2030 through our investment in purchases. We are also reaffirming our commitment to diversity and inclusion with women occupying at least 35% of relevant position by 2030 and to learning and development with a target of 55 hours of training per employee annually. We will also increase the activities of our foundation with -- benefiting more than 10 million people by 2030 in our voluntary program. All these targets are based in our governance system and the building block of our commitment to sustainability. Our decentralized model combines common strategies and guidelines with local implementation, providing strength and autonomy to our country and holding companies. The structure of the Board of Directors is in line with practice of corporate governance. As you know, we are split three roles, Executive Chairman and CEO, 79% of the Board members are independent, and the general diversity reached 43%. We are also fully committed to the highest ethics standard in our internal and external relation with a compliance unit, the report to the Sustainable Board Committee and develops its functions with full autonomy. For Iberdrola, this ESG must go hand-in-hand with financial targets and performance. This approach that we call ESG+F is reflected in our business activities, think East. That is why, for example, more than 90% of our investments are fully aligned to European Union taxonomy and finance with sustainable instrument. The new target for 2025 we are presenting today, together with the sector transmission, allow us to reaffirm our outlook until the end of the decade. By 2030, we expect electrification to continue accelerating due to the need of more self-sufficient in the carbonization and improved efficiency and competitiveness. In this context, we expect a further increase in our activities in traditional markets, driven by investment in renewables, network storage and green hydrogen and the consolidation of a growth in new areas like Australia. Investment for 2026 to 2030 will be in the range of EUR 65 billion to EUR 75 billion. And by 2030, we expect the total capacity of more than 100,000 megawatt, at least 80% of this one renewables, a net regulated asset base of more than EUR 65 billion. In conclusion, to conclude, today, we are presenting an ambition achievable plan based on the strength and delivery we have demonstrated over the last 20 years, occurring with the current context and aligned with the long-term trends of self-efficiency and decarbonization. In plan, they will deliver more growth in financial strength by 2025, improving our position in the long run, thanks to our investment record investment of EUR 47 billion in the next 3 years, focusing our growth in networks with regulated asset base increasing by 44% to EUR 56 billion, benefiting for the visibility and macro protection providing our stable and predictable framework. Combined with a selective approach to renewable investment, they will allow us to increase our capacity by 2,000 megawatt, reaching 52,000 megawatt by 2025 through secured projects with the best risk-reward profile and preserving optionality, thanks to our diversified pipeline of projects. All this investment will improve even more our geographical footprint, reinforcing our position in current markets in bringing additional growth from high rating countries like France, Germany, Australia. We will also maintain our full commitment to financial strength and solid credit ratings and our focus on ESG and social dividend as foundation of our long-term model. Following these guidelines, we are increasing our outlook for 2025 with EBITDA reaching EUR 16.5 billion to EUR 17 billion and net profit between EUR 5.2 billion and EUR 5.4 billion. And strengthening our commitment to increase shareholder remuneration in line with net profit growth which according to our estimate, will drive a dividend between EUR 0.55 to EUR 0.58 per share by 2025. With a rising floor, they will reach EUR 0.5 by the end of the period. And finally, maintaining our financial solidity and credit rating will be a top priority target a net debt to EBITDA of 3.4x by 2025. You can be sure that Iberdrola with the diversity of 40,000 women and men will be fully committed with this target. We have the skill and the technology, -- record of delivery and the access to financial resources to continue delivering in the next 3 years and leading these indices toward the next decade. Thank you very much for your attention. And now, I pass the floor to Armando Martínez and Pepe Sainz who will present more in detail on this data. Thank you very much.

Thank you, Chairman, and good morning, everyone. During my presentation of the plan, I will detail the main milestones and our main drivers to deliver the goals of the outlook. Over 20 years, Iberdrola anticipated the key pillars of the energy transition based on renewables, networks and storage. Thanks to this strategy, Iberdrola, a global leader in networks and a diversified and balanced rate case close to EUR 40 billion and a worldwide leader in clean energy production. With 40 gigawatts of renewable capacity, the company has one of the lowest emission levels in the sector, less than 1/3 of our competitors, and serves a population of 1 million people worldwide. Up to 2025, our EUR 47 billion investment that the Chairman has said will aim at accelerating networks and growing selectively in renewables. Networks will be the primary destination of our investment with EUR 20 billion, which boosts the asset base to EUR 56 billion. I would like to point out that almost 80% of the organic investment in networks are secured during the period, thanks to the stable regulatory frameworks already in place or in advanced stages of negotiation. This solid position of the regulated business guarantees a significant part of the growth of Iberdrola up to 2025. Additionally, we will invest EUR 17 billion in renewables, almost half of it in offshore wind, reaching a capacity of 72 gigawatts. The group has developed our competitive advantages to ensure the delivery of the plan and to maximizing results. After 2 decades anticipating the energy transition, today, Iberdrola has the scale, the diversification and the access to customers and partners required to reach our targets. Therefore, we are ready to deliver growth in the current context, thanks to our strong track record in execution and the optionality of investment driven by our local and global platforms. Moving to network businesses. Let me remark the quality of our asset base, equally balanced and diversified in high-credit rating countries. I truly believe this is a differential position to our peers. We all agree that there is an urgent need for investment in the network driven by the security of supply and decarbonization of the economy. Nowadays, the security of supply is one of the largest requirement worldwide. Huge investments are needed in transmission and distribution to link the new renewable production to consumption. The electrification of the economy will drive a significant growth of the electricity demands in all markets. Lastly, we expect growth in networks from a more active role of the customers. We are already facing a relevant increase of distributed solutions and services that implies large investment in digitalization and flexibility of supply. In the U.K., transmission regulation, RIIO-T2 already delivered -- sorry -- sorry, in order to make this happen, we plan to invest EUR 27 billion in the network in the next 3 years, including EUR 11 billion related to PNM. Almost half of the organic investment will be dedicated to the U.S., 24% to Brazil, 21% to the U.K. and the remaining 6% to Spain. The growth of our network business is well defined and predictable, thanks to a stable regulatory frameworks that strongly protect our results for inflation, interest rates and demand. Most of these frameworks are in place or in advanced stage of negotiation. Therefore, almost 85% of our asset base growth is already closed or to be closed in 2023. In Spain, the framework is fixed up to 2025, providing a floor in remuneration regardless the evolution of the demand and providing additional opportunities, incentive mechanism, such as efficiency and quality that our company usually outperforms. In the U.K., transmission regulation RIIO-T2 is already defined until 2026. And the distribution framework, RIIO-ED2, will be approved this month being in place until 2028. Both T2 and the draft determination of the ED2 will secure conditions for the business, protecting it from demand, inflation and interest rates. In the U.S., the company has four new rate cases in advanced negotiation that will be placed next year. We expect to achieve multiyear rate cases with return of equity in line with the current scenario with additional investment opportunity driven by the growth of renewables. In Brazil, the parameters of the framework are already set and linked to inflation, which is essential to secure revenues. In relation to transmission, I would like to highlight the success of our business model. Iberdrola is an acknowledged global player, thanks to our technological skills, our know-how in core activities and our track record on competitiveness and execution. The group already counts with 10,000 kilometers on high-voltage lines in Brazil, U.K. and U.S., the countries with the largest opportunity of growth in transmission in the future, together with Australia, where we are already participating in tenders. As of today, Iberdrola has proven strong delivery transmission projects, especially on awards from competitive auctions. We expect increasing opportunities in HVAC, a technology in which we already have experienced with projects that exceed 5 gigawatts of capacity in the U.K. and U.S. We have begun the competitive reference for the Brazilian auctions, bid award with 25% of the CapEx tender since 2017, more than doubling the next competitors. Our 15 projects consist of 8,500 kilometers of high-voltage lines, 70% of which are already in operation. ANEEL, the Brazilian regulator has already announced its commitment to continue with these competitive auctions over the next years. We'll provide additional opportunity of growth in this business. The investment of the EUR 27 billion in the network plan will increase our asset base by 44%, reaching EUR 56 billion rep base. We will maintain our balanced and diversified portfolio with 41 of the asset base located in the U.S. and the rest, almost equally split among Brazil, U.K. and Spain. This growth will improve our financial and operating results, driving additional benefits for our customers in terms of higher quality of supply and very important affordability. Regarding financials, EBITDA will increase up to a range to EUR 8 billion to EUR 8.5 billion. Similarly to the asset base, the split of the result will be well balanced and mainly supported by A-rate countries. Now, I would like to elaborate on the customer benefits of this investment that is also very important for us. In terms of quality of supply, we keep our improvement in all regions, driven by the EUR 7 billion of CapEx, specifically devoted to modernization and digitalization of the networks. This investment will increase the automation and resilience of our grid, enabling a faster restoration for outages and extreme climate events. Even though Iberdrola is already the best-in-class performer compared with our peers, we are committed to delivering an improvement of 10% in global quality service by 2025. Digitalization will also deliver additional benefits in operations with positive impact in affordability for our customers. Let me remark the continuous outperformance in grid losses delivered in Spain and Brazil. This constant effort from our company significantly improved the cost of the whole system. As an example, if our peers in Spain had our level of grid losses, we estimate that the system will save EUR 500 million per year. In total, the network business will improve its net operating expenses over gross margin by 12% in '25 compared with 2019, increasing efficiency gains and also serving them with our customer to decrease tariff. Nowadays, the world is facing an increase of extreme climate events in which automation and resiliency of the grid are essential to reduce the time of restoration. In a severe climate incident, first thing we have is a very challenging conditions for the group to be in the field. That is why restoration time relies on the ability of the grid to divert flows, isolate the fault and automatically recover the maximum possible number of customers as soon as possible. In other words, develop smart grids means having a layer of intelligence on the top of the electric assets, allowing the operation of the grid without almost human intervention. This has been demonstrated on how our network perform under severe conditions. Let me put an example. In January of 2021, most of you know, we suffered an unusual storm called Mena . Thanks to the intelligence of our grid, we were able to restore the service for more than 70% of customers -- of the affected customers in less than 30 minutes without human integration only with the digitalization of the grid. This is how we see the smart grids of the future. On the slide, you can see additional examples in other countries. Let me highlight something that we are particularly proud of, no lost time accidents was recorded during the restoration works in any of these weather events, showing again that in Iberdrola, safety comes first. We know that, that operational excellence is always an ongoing effort. That is why we are strongly focused on innovation. As of today, we have three smart grids innovation hubs, one in Bilbao and another in Glasgow and the third in Doha, all of them bringing new ideas and digital solutions. Only in our innovation hub in Larrasquitu in Bilbao jointly developed with the Bizkaia government. We have more than 200 professionals working side-by-side with suppliers, government agency and research centers in more than 120 innovative projects that will bring specific solutions to save the future of the smart grid developments. Moving on, production and customers. As you know, this business is made up of three different activities that we manage jointly to maximize value and minimize risk. A state-of-the-art generation fleet, including all carbon-free technologies as well as storage, which we operated with the aim of optimizing availability and cost. A diversified portfolio of route to market that we manage to maximize our return on assets and to limit the price volatility and regulation. Lastly, the sale of this clean energy enables us to offer value solutions linked to decarbonization, including energy efficiency, electric mobility, self-consumption or green hydrogen or ammonia. Iberdrola's advantages on this business arise from the 20 years of anticipation, competitiveness and execution track record. The company, as leader in renewable production, has multiple options to allocate investment, allowing a strategy of selective and profitable growth. Our plan considers investment of EUR 20 billion in the following 3 years. 85% devoted to the renewables growth and the remaining EUR 3 billion to customers. As a result, we expect EBITDA for production and customers will reach between EUR 8 billion to EUR 8.5 billion. Regarding renewables, Iberdrola will invest EUR 17 billion to add 12 gigawatts of new capacity over the period. This EUR 17 billion includes EUR 4 billion of investment that will be operational post 2025. This investment will be diversified in terms of geography and technology. Regarding technology, almost half of the total investment will be dedicated to offshore wind, contributing with almost 2 gigawatts of high value-add capacity in France, Germany and the U.S. As I said earlier, during the next 3 years, we will deliver 12 gigawatts of renewable capacity having a significant part of this growth already secured. In particular, 50% of this new capacity corresponds to projects already under construction or ready to build while the remaining 6 gigawatt is in advanced process of planning and consenting. To secure the 6 gigawatts of capacity, the company counts with 100 gigawatt pipeline, of which 26 gigawatts corresponds to project ready to become operational over the period. In other words, mature pipeline covers 4x our pending capacity to 2025, a very comfortable position. Given the large dynamizing of the industry, we will continue focusing on developing a larger and better pipeline to increase optionality towards investment decisions. During the period, our offshore business will increase by 2.5x, thanks to almost 2 gigawatts of capacity under construction, corresponding to -- in Saint-Brieuc in France, Baltic Eagle in Germany, Vineyard Wind in the U.S., all of them progressing as scheduled. Iberdrola will reach 3 gigawatts in operation, all of them in core markets that will deliver an EBITDA of EUR 1.2 billion in 2025, doubling the results in only 3 years. The company has almost 40 gigawatts of offshore pipeline, which will provide additional growth in the second half of the decade. Of this pipeline, 5 gigawatts are secured projects that will be operational before 2029. 3 gigawatts correspond to East Anglia Hub in U.K. with East Anglia 1 already awarded with a contract for difference in the last auction, 300 megawatts from Windanker project in Germany that will be operational in 2026, and over 2 gigawatts of additional growth in the U.S. Park City Wind has a PPA secured in Connecticut and is expected to be operational in 2027, and Commonwealth Wind project with Massachusetts Utilities and will be operational in 2028. On top of this mature project, we have more than 30 gigawatts of well-diversified and low cost pipeline that will allow us to capture additional opportunities in both new and traditional markets. In this regard, let me highlight the 7 gigawatts in U.K., where Iberdrola has been awarded the seabed rights to develop three areas, two fix and one floating sites in partnership with Shell. In terms of new markets, Iberdrola is well positioned in other geographies with strong potential like Japan, Sweden or Brazil, creating additional alternatives to capital allocation in the future. It is very important to point out that this optionality in projects that has been built, optimizing the development cost. For instance, the company has a very competitive seabed cost, 70% lower in average that the recent processes that we have seen in the U.S. Moving on to onshore technologies. Our plan is to consider investment over EUR 8 billion, reaching 35 gigawatts by 2025. By geography, we will install 4 gigawatts in Spain, of which half are already under construction or ready to build, 1 gigawatts in U.K. with 800 megawatts corresponding to the last CFD auction in June. In the U.S., AVANGRID will install over 1 gigawatt capacity, half of which we will develop jointly with partners. 500 megawatts correspond to Brazil with Santa Luzia are already under construction. And the remaining new capacity will come from other countries, selecting the projects with the most attractive return of assets. Integrating this huge addition of renewable capacity will require significant new capacity of storage. The International Energy Agency forecasts that the increase of long and short duration stories at least 3x by 2030, driven by penetration of wind and solar energy. Pump hydro is currently the only alternative technically and economically viable for large-scale, long-term storage, either by building new facility or retrofitting existing plants with reversible turbines. Including the Tamega giga battery inaugurated early this year in Portugal, Iberdrola has had total hydro pump storage capacity of 4 gigawatts, and almost 5 gigawatts of additional pipeline in Iberia. In terms of short-term storage, a very significant increase also expected in batteries. We expect to multiply our battery capacity by almost 5x by 2025, reaching 900 megawatts mainly in U.K., Australia and the U.S. As you all know, we are facing two main bottlenecks to renewable development. First, permitting, which has delayed many projects over the last year and is compromising the renewable targets in various countries. However, during this year, we have seen how the European Union and different governments have moved in the right direction. We, therefore, expect clear improvement in permitted lead times. The second is security of supply chains that has become one of the largest challenges in industry. In this context, the company has secured critical equipment at competitive prices, hedging our exposure to the impact of the raw material costs, exchange rate and inflation. In particular, the company has secured 100% of our offshore wind turbines until 2025, 100 of our solar panels and close to 50% of our onshore wind turbines and the remaining of the wind turbines is in advanced negotiation and is subject to final FID conditions. Having access to multiple route to markets now is one of our main competitive advantages as it enabled us to maximize returns on assets and to limit our exposure to price volatility and regulation. Driven by all the investments that we have presented, the company will significantly grow in its emission-free capacity and production, reaching 55 gigawatts and 125 terawatt hour of energy in 2025. In [indiscernible] , our route-to-market approach allow us to sell over 90% of this production through multiple alternatives, including 44% to retail customers, 34% to long-term PPAs, or 17% revenues from regulated schemes like CFD or green certificates. This policy enables to secure our margins in advance, limiting our exposure to spot price volatility as only around 5% of the production is and will be on merchant. In terms of the final sales to our customers, our approach is to minimize price volatility as well. We will develop our sales activities on geographies where we already own generation capacity. In general basis, we maximize the use of long-term contracts to provide revenue stability. Therefore, I would like to stress that we don't get any revenue from speculative trading. As a result, we currently have 85% of our sales covered by our own production. And our forecast is to increase this percentage to 95% in 2025. In other words, Iberdrola approach is to sell our own production with long-term contracts, allowing us to maintain our final prices to our customers even in a volatile scenario. As an example, in Spain, our production is sold with a flat wholesale price of around between 75 -- EUR 65 and EUR 70 per megawatt hour, giving us predictable revenue during the plan until 2025 and protecting our customers from price volatility with long-term contracts. As I mentioned at the beginning of this section, the added solutions -- added value solutions create further revenues from the energy business. Iberdrola currently has a portfolio of 28 million customers in Europe, to which we sell sustainable energy with an optimized cost to share, thanks to the benefit of digitalization and advanced analytics. In terms of add value products and services, the company already -- are already providing more than 11 million of smart solutions contracts to retail and industrial customers, covering all the spectrum of decarbonization. Given the scenario of high energy prices, we are facing an increasing demand on the smart products for our residential customers, especially on mobility and self-consumption. Iberdrola has been fostering these sustainable products from years now. That's why our company is the actual leader in Spain for PV self-consumption, managing more than 40% of the total actual installations. During the plan, we expect to continue increasing our portfolio of smart products and to expand this activity to new geographies. Regarding smart mobility and PV self-consumption, the company plans to multiply its business by 4 to 5x. Iberdrola also is committed to decarbonizing the industry, supporting leading companies in their path to net zero by providing sustainable products to transform energy-intensive processes. The group already supplied 23 terawatt hour of green energy to industries through long-term PPAs, and has several alliance with leading manufacturer for a wide range of sectors, consolidating a broad portfolio of additional opportunities to electrify the economy. These customers requires other decarbonization solutions, like heat pump for hot water or air in case of low temperature processes or electric heaters for steam, hot water or thermal fluids. To provide this new services, we already come with unique capabilities, including reskilling people coming from our former thermal generation and engineering team. In case of hard-to-electrify processes, rehiring is the solution of decarbonization. Iberdrola already has two plants in operation, one in Puertollano to produce green ammonia for fertilizers and another one in Barcelona to provide hydrogen to the local bus fleet. The group also counts with a diversified pipeline exceeded 2 gigawatts in different regions, mainly in Spain, U.S., Australia, which will allow us to reach 35,000 tons of hydrogen per year in 2025 and more than 350,000 tons per year in 2030. To complete our industrial plan, Iberdrola is giving a solid step forward to offer other derivatives from green hydrogen. Green hydrogen is also renewable electricity, like ammonia and methanol. The group is building strategic alliances with key players like Cempra, BP, Foresa to pioneer the production of these add value products for the industries worldwide. Let me conclude. In current times of uncertainty, Iberdrola shows a credible plan that delivers sustainable growth up to 2025. Our 2025 plan has three main drivers: Sustainable growth as the majority of the investment are already ongoing and supply chain are secure; achievable results given the low risk profile of the growth, most of the investment have secured revenues either from regulatory frameworks in place of our long-term contracts, not linked to spot price, which is especially relevant in the current scenario of volatility. And diversification, position of businesses, geographies, road to market and add value products. The balanced mix are ours to maximize our returns for the multiple options of CapEx allocation. My final words are for the main driver of this 2025 plan, the 40,000 professionals of the group whose exceptional commitment and expertise during all this year have differentiated Iberdrola with a unique track record of execution and excellence. Thank you very much.

Okay. Now after Armando Martinez presentation and before Pepe Sainz, we have the opportunity of socializing in our coffee break that starting this moment. So we're ahead of time, so please enjoy with us the coffee. [Break]

Please, take a seat. Please, we're going to follow with the next presentation, the financial one given by our CFO, José Sainz, Pepe Sainz Armada.

Hello. Good morning to everybody. So following the Chairman and the CEO of presentations about the prospects of Iberdrola, I'm now going to explain to you how we're going to fund this growth and these investments while we maintain a strong financial profile and create value for our shareholders. The key hypothesis for the plan are driven by the new macro scenario of high inflation peaking in '22, '23 with a gradual convergence to the central bank targets from '24 onwards. And that will continue to be the main driver of the central bank policies in the meantime. As a result, short-term rates will continue to increase in '23 to control inflation to later move down to support growth recovery. Long-term rates will remain below short-term rates in '23 due to recession risk. And the exception is going to be Brazil. Brazil is in a more advanced stage of the economic cycle and it is expected to start cutting rates in '23. Regarding commodities, gas and energy prices rise has been driven by the Ukrainian crisis, causing uncertainty, volatility, liquidity constraints and regulatory intervention in the energy markets. We expect prices to trend downwards to more usual levels by 2025. GDP is expected to slow down in '23 and will recover to potential growth from 25 onwards. GDP is being penalized by the restrictive monetary policies from central banks to contain inflation mainly to interest rate rises and balance sheet reduction. Finally, regarding the FX. U.S. dollar, we anticipate will continue to be a safe haven asset. So it will continue to be strong. The pound will continue to be affected by political and stability and low growth, while the Brazilian real will depreciate slightly as interest rates there come down. In the Annex, in Pages 90 and 91, you will find a detailed set of hypothesis for the plan. That, I can tell you that are in line with the market estimates at the end of October when it is when we finalize the numbers for the plan. For the '23, '25 period, our financial strategy will try to provide a sustainable growth path in terms of net profit and EPS. At the same time, as the Chairman has said, enabling a sustainable dividend policy, combined with the maintenance of a strong financial position along the plan. So we are expecting that our credit ratings will be comfortably in the BBB+, Baa1 levels. We have a high level of liquidity, a highly diversified sources of funds and access to traditional Europe and other markets guaranteeing the planned financing. We will use partnerships and asset rotation to fund investment opportunities without stressing our balance sheet, creating value at the same time. And 90% of our investment plan is aligned with the European Union taxonomy, allowing us to continue to be the world's private group leader in green bonds and sustainable finance. So before entering into the details of the plan, let me highlight what has changed from our last Capital Markets Day in November '20 to this 1, 2 years later. In this plan, we are investing a similar amount of CapEx than in 2020 with more focus on networks and renewables, replacing the supply business contribution that in the previous plan was giving us around EUR 200 million of net profit as we have reduced ambitions in this business with additional network and renewable profits. So we are replacing this EUR 200 million with a more stable unsecured results. Regarding prices, as the CEO has mentioned, the prices are in line with the cap in Spain for the whole period. Exchange rate is favorable for our results due to the reference currencies appreciation, 15%, the dollar; around 1%, the British pound; and 15%, the Brazilian real but interest rates are around 200 basis points higher, both in the U.S. and in the Eurozone, 250 basis points in the U.K. and 470 basis points in Brazil. But thanks to our fixing debt fixing policy, the impact is limited. We are expecting an average 1.75% -- 1.5% higher cost of debt as we will maintain around 75% of our debt fixed. The good news is that despite this increase in interest rates, there are recovery mechanism, as the CEO has explained, especially in the distribution business that protects the group from inflation. As you know, 45% of our business is linked to inflation directly or indirectly. For this plan, we are also assuming that there is a reduction in the hybrid target. The last planning was EUR 10 billion and in this plan, it's going to be EUR 8.2 billion. This doesn't mean that if the hybrid market improves, we will not increase another time, the hybrid funding. But we are assuming a conservative approach. And in addition, we are increasing slightly the use of asset rotation and partnership because, as I mentioned, provide us with the flexibility to fund more investment projects. And as I will reiterate, we are right now seeing lots of interest from private equity funds to participate with Iberdrola in the investment plan. During the '23, '25 period, we will have to fund around EUR 58 billion for CapEx, shareholder remuneration and minority interest, 64% of that will be covered by our growing funds from operations, limiting additional debt to only 21% of sources. Contribution from partnerships will be around 7% and the remaining percent will come from asset rotation. 81% of our sources will be dedicated to investments, around EUR 47 billion, of which EUR 36 billion are organic investments and EUR 11 billion to PNM, including PNM investments. The remaining 19% will be dedicated to shareholder remuneration and minority interest payments. Our investment criteria will allow us to obtain an average spread to WACC of over 150 basis points on average. In our networks, the return is aligned with the well-known regulated schemes that we have presented. And in renewables, with different routes to market, we are comfortable. And as the Chairman has said, given our selective approach to investment there, we will also be able to generate more than 150 basis points overall cost of capital. So as a consequence, our 25 return on capital investment will be over 6.5%, allowing return equity to be over 10%. So the plan will create value for our shareholders as our average return on the capital investment will be above Iberdrola's cost of capital. Our cash flow generation versus the CapEx plan drives a 4% increase in debt, which is a limited increase after the PNM acquisition in '23. We expect to end '25 with EUR 57.5 billion, very similar to the EUR 56 billion of our Capital Market Day in 2020. In addition, out of this EUR 57 billion, our assets under construction will be around EUR 9 billion along the plan. This is what allows us to deliver further growth post 2025. As mentioned early, currently, we have a 75% fixed debt, higher than our 55% fixed EBITDA, positioning Iberdrola well for this current cycle of rising inflation and interest rates. As you can see in the slide, we have a percentage of debt higher than the income structure in all currencies except the Brazilian real, with a 93% fixed debt in our U.S. business as most of our business debt is a regulated business, and most of our renewable business is based on long-term PPAs. In euros, we have around 76% of our debt fixed because we have a higher percentage of liberalized business as a source of profits. And in our British pound, our income is fairly balanced at fixed floating and inflation index. So we have around 80% of our debt fixed. Real debt is inflation index as our EBITDA, which in Brazil is linked to inflation. The increase of our average cost of debt during the period, on the one side, is driven by greater percentage of funding in dollars and pounds versus euro, especially due to the needs in '23 of the -- in the U.S. And on the other side, by the higher interest rates in all the currencies versus the '20 Capital Markets Day expectations. As you can see in the table, growth in cost of debt is limited for the period. And finally, for '25, we are expecting a similar cost of debt that in '22, with a peak in '23. This also is being helped by the expectations that the real -- that cost will go down during these years. We will maintain moderate financial needs through the plan, peaking in '23 with EUR 10 billion due to the PNM acquisition and around EUR 7 billion onwards. Our financial needs will be financed mainly from the holding, although the U.S. is going to take almost 40% of the funding due to the PNM acquisition and Brazil will also raise its own financing. Regarding our debt maturity profile, our average maturity is EUR 5.4 billion per year, which is a comfortable amount of maturities, especially if you look to our strong diversification of financial sources that gives Iberdrola plenty of access to different lenders and markets. Currently, the bond market is 55% of our total sources. For '25, we will have a similar weight, but a different composition with an increasing weight of the U.S. dollar bond market, up to 31%. Weight of the bank market loans will remain stable, around 14%, giving us the opportunity to increase this kind of financing if required with our strong and diversified group of relationship banks. Supranational lenders, multilateral institutions, export credit agencies and development banks will increase from EUR 7 billion to EUR 11 billion in '25, representing 18% of our funding. As I was mentioned, the Eurobond will still be our main source of funding. But also the U.S. market -- the U.S. bond market, we have very -- will be a very important market for us. The U.S. bond market is the biggest market in the world. There is ample liquidity there. We have been doing issues in the market. So Iberdrola knows well the market and AVANGRID also uses this market. So in addition to this market and to the euro market with access and experience to other non-euro markets as the pound market, the Swiss market, the Japanese market or the Canadian market. Multilateral institutions, export agencies and development banks will continue to support our investment plans. Iberdrola is right now one of the most important partners definitely in Europe and worldwide, especially with the AIB and with BNDS. Today, the export agencies and these development banks are willing to fund our investment needs as they have the mandate to increase fund for the energy transition, which is precisely the core of our plan. This provides us with long-term financing, which is not subject to the capital markets volatility. So in addition to a strong relationship with the European Investment Bank, BNDES, ECO, which is the development bank in Spain, we are expanding our relationship with new others like the IFC with the export agencies of Spain, Denmark, et cetera. And finally, regarding the bond market, also, banks today are favoring green and sustainable funding where Iberdrola is a leader. As a consequence, we will continue to work with a diversified, strong group of banks including main international and local banks, and we are expanding new players in new geographies. As I was mentioned, Iberdrola is committed to its current hybrid portfolio. So for the plan, we will remain focused on refinancing the outstanding stock. We have only three operations. The first one in May of next year. Our hybrid strategy will remain supportive of our existing credit ratings. If the hybrid market reopens in good conditions, we will definitely look at it to increase our hybrid issues. But for the time being, as I said at the beginning of this presentation, we prefer to have a conservative approach to it. Our average life of 6 to 7 years expected. This average life, in an opinion, optimizes the risk cost perspective. We prioritize the regulatory cycles versus the asset useful life. But still, we fund ourselves with a longer duration than the regulatory cycle just in case and normally, the regulatory cycles are not more than 5 years. Our strong liquidity position above rating agency requirements for what they call strong or adequate classification has allowed us to avoid impact from the current liquidity constraints in the market. So we have been able to avoid all the volatility that we've seen in the last couple of months. And we are expecting to continue actively managing our liquidity requirements, ending '25 at around 25 months coverage with around EUR 25 billion of liquidity. We have, at this moment, EUR 22 billion of liquidity or 25 months of financial needs. We will optimize our liquidity position, trying to complement cash balances with the extension of the maturity of our credit lines with the target of optimizing the overall liquidity cost. Because having EUR 25 billion or EUR 22 billion of liquidity is a little bit expensive, especially in these times. All the new credit lines will be based on KPIs, achieving 100% of sustainable lines at the end of the plan. And here comes probably the area that provides more interest. Our plan assumes EUR 4 billion to EUR 9 billion of target for asset rotation and EUR 2.6 billion for partnerships. Regarding asset rotation, as we define it, which is divestments of assets with CapEx already deployed. In the last 5 years, we have completed EUR 6.4 billion divestments or equivalent to EUR 1.3 billion, representing 4% of the assets. This time, we are talking about EUR 1.7 billion per year, which is 3% of our assets. But obviously, we are flexible there. It will depend on our investment opportunities to increase or decrease it. Let me remark that on our plan, we are not including any capital gain from the asset rotation. So the EBITDA that we are presenting is clean. This will be an upside to the numbers that we present today. In partnerships, defined as newbuild projects with CapEx to be deployed by Iberdrola and partners, we have set a range of EUR 2.6 billion. More than EUR 1 billion of the EUR 2.6 billion is already signed and in process as this corresponds to the Vineyard wind farm that we are developing with CIB. 50%, or more than 50% of our asset rotation and partnership target is advanced or already initiated, so EUR 4 billion out of the EUR 75 billion. EUR 1 billion, I have already said that is Vineyard agreement. I can assure you that there is a strong appetite in the market for Iberdrola's high-quality assets and that we have already firm interest from different investors for the advanced projects. I can assure you that we have expressed or we have received strong interest for this EUR 4 billion. We are taking advantage of the high volume of capital to be deployed by 100% equity funds that reduces the exposure to the debt market for this type of transactions, and they are less [indiscernible] to the rising debt costs. In addition, we have a flexible portfolio of projects to be considered for the target. There are alternative backup projects under analysis in addition to the initially targeted in plan in case it is needed. Taking into account that, as I mentioned in the previous slide, we are considering for this only 3% of our asset base. So we have a lot of assets, which are very attractive that could be included, if needed. As I was mentioning, we have a strong track record in the last years of agreements with partners -- Iberdrola, a majority or minority investor in different geographies and with different technologies. In the slide, you can see just some examples, including our recent joint venture for electric mobility with British Petroleum for charging points in Spain, our agreement in Germany with EIP for Wikinger offshore wind or the one in the U.S. with CIB, as I mentioned. In the onshore business with MAPFRE, the leading Spanish insurance company and East Anglia 1 in the U.K. with Macquarie. So after hoping that I have convinced you that we can fund this plan quite nicely, I will now move to the solvency ratios. Iberdrola will maintain strong solvency ratios through the plan, comfortably above the rating agency thresholds due to our commitment towards cover rating. Our net debt to EBITDA will improve to 3.4x in '25. Our FFO over net debt will progressively rise, ending around 22% also that year and our retained cash flow over net debt will also increase to 19.7%. Although our ratio calculations defer from those of the rating agencies, these ratios are comfortable above the 18% or the 17%, more than the 18%, the 17% threshold for FFO over net debt that the rating agencies require to maintain the BBB+, Baa1 ratio, more or less, while rating agencies are asking is around 17% or high teens. So we are clearly above that threshold. We are also improving credit metrics versus the November '20 plan. In November '20 plan, for '21 -- sorry, for '25, we had 21.6% and now we are talking about 22% for the FFO over net debt ratio. So we finished the plan with stronger ratios than in the previous plan. Our FX strategy, hedges are most important solvency ratio to protect our financial solvency and the rating of the group from FX fluctuations. On the average, 60% of our operating cash flow will be generated in currencies different from the euro in the period. Spain will be around 30% and now around 10% will come from other European countries as Germany or France. So structurally, our aim is to minimize the FFO over net debt ratio volatility, adjusting the amount of debt in the different currencies to the funds generated in the equivalent currency. Our financial model is based on financing the group needs from the holding company when it's possible. This model is designed to optimize the funding of the needs and monitor a structural subordination guidance. Currently, debt is mainly at the holding level. Our external debt other than the holding will be mainly raised at the regulated operating companies in the U.S. as the cost of debt is a pass-through where we have minority shareholders like in the case of [ Neo ] that has its own financial policy and the group doesn't provide support. The holding, also important, has direct assets, direct access to cash flows from fully owned subsidiaries that account for 70% of the group EBITDA. So the high visibility of centralized funds and the centralized treasury reduces the impact of a structural subordination. Over the plan, the ratio will steadily decrease after the MPN transaction to levels close to 30% threshold. And hopefully, post '25, we are going to reach this 30% threshold. As the Chairman has mentioned, and I have reiterated, 90% of our total organic investments will be aligned to the EU taxonomy of sustainable activities and therefore, will be providing a large pipeline to be financed under sustainable or green principles. During the plan, a minimum of 80% of new financial instruments will be ESG labeled. And as a consequence, we are forecasting a more than 70% ESG labeled financial instruments at the end -- we will have at the end of the plan. Our green financing in which we are extremely proud and as you know, we are the private leader in green financing in the world is considered and the time is proving us right as the best practice aligned with the International Capital Markets Association. Green bond principles and only including assets and activities eligible under the European Union taxonomy. Use of proceeds, strict reporting, external verification and [ 6 ] standards for the eligibility of activities together with full alignment to the company's strategy are highly valued by our ESG investors. Investors find in the use of proceeds approach, the best way to measure the sustainable impact of their investments, comprehensive reporting, second-party opinion and external reporting guarantee, assurance and transparence. Our current asset base and investment plan focused in the energy transition allow the group to continue taking advantage of the green bond market. This allow us to increase the investor base and as a consequence, to reduce the cost of debt. We estimate that the green sustained -- that the green funding will save around 10 basis points according to some market sources. We -- as you are seeing, we are a very conservative -- we are doing a very conservative approach. Other people are talking around 20 basis points. But 10 basis points is fine. And in addition, what we always find is there is a lot of interest for our green bonds. The ESG approach is integrated in our operations and our financial strategy as the Chairman has pointed out. Our ESG targets have been selected, taking into account the company governance and sustainability system, a stakeholders' expectations, including Institutional Investor Sustainability Index, ESG rating requirements. Therefore, each one of the 4 areas, environment, social, governance and final has ambitious and specific targets that position ourselves as the leading integrating utility in ESG. In the slide, you can see the most relevant KPIs for each area. And in the annex in Page 96, you have also a more detailed summary of the 20 most important targets followed by our stakeholders. This afternoon, in addition, you will have an ESG session, where these and other targets will be explained. On the environmental front, we are -- as the Chairman has mentioned, we are planning to be net zero in Scope 1, 2 and 3 before 2040. We are also committed to keep best practices in governance with an independent, diverse Board of Directors. And on the social area, we commit to improve gender diversity in our senior positions and to decrease accidentality rate by 21%. Let me conclude this presentation remarking that Iberdrola will finance this plan through our solid financial model, maintaining financial strength through the period, delivering sustainable long-term shareholders' return and remuneration growing in line with our results and with flexibility through our asset rotation and partners and at the same time, integrating ESG in our strategy as leaders with best practices in environmental, social and governance. Thank you very much.

Okay. We are going to start with the Q&A session from the floor. Alberto Gandolfi, then Manuel Palomo. Alberto, please.

It's Alberto Gandolfi from Goldman Sachs. Three questions and thank you for taking the time, physically, in-person, It's great. So the first one, could you elaborate a little bit more regarding the logic to deemphasize a little bit investments in renewables and emphasize a little bit more in networks. What's the logic? Is it capital intensity? Is it maybe a slight concern or terms? Has it been more selective on IRRs? If you can maybe talk about that would be great. The second question, talking about maybe capital preservation, which is how we would define some of the measures you announced correctly in this credit environment. Why not trying to go even further on preserving balance sheet and capital so that don't you think maybe some of the small developers, some of the smaller players may not be able to fund projects. So isn't the moment to be quite aggressive on balance sheet right now, a reduction and then be countercyclical and basically try to invest when everybody else is not able to gain more market share. I'm thinking, for instance, why not going 2-year scrip dividends, just as an example. And the last question, when it comes to the profitability of your offshore projects, we saw statements by AVANGRID in particular, pointing out CapEx cost inflation, funding cost inflation and you were asking for a renegotiation effectively, if I'm not mistaken, of the project. What are the chances of these renegotiations? And are you willing to walk away from some offshore projects if the returns are just not there?

Thank you very much for your question, always very intelligent one. So I don't know if I repeat enough time what is the main driver of this presentation, of this business plan, which is to protect financial solidity, to protect financial solidity, to protect financial solidity. So I think our focus, we are -- our vision is clear. So we are in the middle of a storm. We have not really had this storm for decades and we are in the middle of the storm. So -- in the middle of the storm, our approach is that we have to be as conservative as possible and to be as less dreamers as possible and to be as much, let's say, with a strong means for -- in whatever situation to protect what we feel is crucial which is balance sheet solidity. So -- and we are already a unique opportunity. It's true that we can already now -- I was mentioned -- before when we were already just having a coffee and nobody's perfect. My hobby is to ride horses. And I think when you're in -- with a horse that you don't know very well, and at my birthday my son has already gifted me a new horse. So I rode another day with it. But I don't know it. And I think you don't know how the horse is going to behave. So you have to be very prudent with it. So now we have a horse, which is this crisis, which we don't know how long it's going to stay, how is it going to change the things. It's an unknown situation in many fields. So I think the list of things we are suffering in this moment, inflation, rate of interest, a war in the borders of Europe. So a problem with -- Armando was mentioning the supply chains. So many things up there. But we are already glad that we have -- we have a choice. We have already a regulated activities, which I think is going to be absolutely needed for the present and for the future if we would like to diminish the dependency, electrify more economy. So the grid is crucial for electrifying the economy. And we are glad because we are in countries where this grid is absolutely needed. So using the United States, you see Britain, you know Brazil, you know Spain. In all countries, if we would like to have electric vehicles, we need a grid behind. It's not a problem with chargers. It's a problem of grid. If you would like to transform already certain industrial processes, we need to a grid. I think the hydrogen, the hydrogen is renewable but renewables -- the hydrogen have to be produced inside what is needed. And for that, you need to already a grid for transporting the electricity to the site because it's much more efficient than transporting the hydrogen through a pipe. So that way you have the choice. The choice to reinforce our investment in grid or to -- or to continue -- or booming in renewables. I think -- I know for Armando should be easier for him to say to his people, there are 24,000 megawatts ready to build. He said, no, wait a minute. So we are ready to build that one. So, no wait. Let's keep already only 3,000 ready, build in this period. Why? Because we have to protect our financial solidity. We can already make the choice of networks because we have predictable, stable regulation. We can already guarantee what Pepe was mentioning cash flows. And we have to say, well, another one, let's continue preparing our pipeline. Let's do something because we would like to continue to make that one in which technologies -- those technologies which are providing better return. So we can make much more than, but let those one -- but also those ones which are already offer more predictable return, more cash flow. Offshore is offering two things. A part of better return is already CFDs or similar, which are already guaranteeing returns, is not already just in a protection. So in that case, your second question, why not to be faster and to put more risk to our balance sheet because not. Simply not. Because I think for us, dividend is a must. So in 22 years, when I joined the company 20 years ago, the model was [indiscernible] there was no growth and no dividend. I said, sorry, dividend and growth, yes, but dividend first. So -- and I think for us dividend is a must. The second thing is that is not a question of competition. There are plenty of needed in the next 20 years. I think I gave to you some numbers, how much investment will be required in the next 20 years for electrifying economy, decarbonizing economy, become self-sufficient in geographical areas. We have to trillions of dollars, trillions. So I think it's not a question to me, hurry. I think we have to have already the pipeline ready to build, and we will do in due time. Then during this 3 years, the situation changed. Great. We have a solid balance sheet, good pipeline, why hang, let's move faster. But now, with the vision we have already now, take care. We have to control the horse. We cannot jump in this moment with the horse because we risk to fall down and I've been too many times fall down in my life with my horse. Offshore. So in our grid situation. First, what is in the plan, all are already in this morning fully agree. I think those ones we are renegotiating is for '27, '28. So -- and why we are renegotiating, because the world is changing. When we made the offer, was not the war, was not the problems of the rate of interest. We were not ready the situation in supply chain, nothing is normal because when you are already making something, you are making with good faith, and I think now is the time to negotiate in that way. And I think what happened. I'm sure we have to reach an agreement. Because. Even renegotiating is much cheaper for them than the alternative, so which I think it has a logic. The logical thing is going to impose, and that's it. So I think we are convinced that, that is going to reach a good time. But I think the same thing we are with everybody, I think the things are changing, we have to -- the things are not black and white. Sometimes you have to renegotiate. But in summary, our plan is solidity, solidity, solidity. Ready to build, if needed more and now concentrating in those things in what we can guarantee, but we have more security about the cash flow we can generate for keeping and maintaining our solidity. Clear?

Next, Manuel Palomo and then [indiscernible] I think.

To some extent, will be aligned with previous Alberto's questions, at least and the first one, I will stick to two. And I see that the large portion of your renewables growth has been already secured, and you have already contracted a significant portion of the volumes. However, also cost of capital has increased massively in the last few, let's say, quarters. How do you expect to defend the value creation for those projects that have been already awarded? Is there any specific plan in terms of, I don't know, renegotiations or trying to reduce somehow the cost? Is there any plan to try to preserve those returns? And second one is a question about Spain. I understand that this is the case but just to confirm. Yesterday, one of your peers mentioned that it had included the -- around EUR 400 million impact on taxes in their financial targets. So my question is whether these targets -- today's announced targets are somehow including any impact from taxes, whether this will be for 1 or 2 years? And if possible, if you could quantify?

I think in the first one, as you mentioned, is almost just replied with my comment to the previous question. So I think most of the renewable, we are building already with PPAs or with the secure returns because I'm making -- and there's only a few of them which is already in market. But this one on which market is based in for our own use, so which again is making the substitution of certain energy, for instance, in the case of Spain, then today, we are already producing with gas. So I think it's making this institution, which I think we are already guaranteeing a certain return because we expect that the cost of that one will lower than other alternative. So I think how you're going to achieve, mostly those ones are either because we have PPAs, either because we have CFDs, either because we are already securing through our market, what we can already substitute today's already production with another more expensive sources. In terms of including the taxes, I think, Pepe, you can already mentioned that one, but I think few days ago when we presented our 9 months result in the projection for the year, we said already it's included in our projection for 2022. And as I mentioned as well, is already in our projection in 2023 as well.

So we have both for '22 and for '23, we have included. So for the guidance that we have been giving for this year, it's included. And for '23, also, we are including a similar a similar amount. The amount that we are expecting is lower -- a little bit lower than the [indiscernible] , but using the same parameters.

Nevertheless, I would like I said already an interview which is published today in the financial times. I think it's -- we feel that is absolutely unfair because I think that the European Commission is talking about in for profits and I think we have not in for profit. And I think it's that way are changing to revenues. So I think it's -- that's equivalent to increase the taxation of corporate tax, went from 20 basis points or something like. So it's anything, of course, I think, because we feel that is not already going in line, this projection of European Commission, we think is correct. I think there are somebody else in this crisis is earning a lot in extra profits, which I think if we will generate an extra profit in this one, we will be ready to contribute. It's not a question of criticizing. All we have to contribute on that one in the middle of the crisis. That's why I'm saying we are already doing our best in this moment to contribute on this one with our investment to generate more wealth and so on. So I think we are beating the record, EUR 47 billion. So -- and even if it's not enough, we, okay, but it's a lot of money. So -- but I think we had not going for profit. We're not in this business for profit. We have not already in gas production. We have not gas contract. We have not already on those things. So I think our business is renewables and the renewables has been sold, as Armando was mentioning as price already agree, and we continue keeping our price already in the same level. So we're the -- for provision generating. I think the fact in Spain this year, we are affecting negatively because we have already agreed prices 2 years ago. And I think we are keeping these prices even in the moment. Then unfortunately, in our case, because of the hydro condition is very bad in the -- worse in 65 years because the wind situation is not very good in the country, we are forced either to buy electricity from the market at very high prices or produce with our combined cycle, buying the gas at very high prices as well. And that is generated, that was our accounts of the 9 months, 14% less profit in Spain than the previous year. It was not an extraordinary year either because we were already with the COVID, cetera. So that's why I think we feel that is not already fair. And I think if that goes, I think we will try to say today, we'll work already to the quotas many and other times in the past when we consider there are something which is affecting negatively to the interest of our shareholders. I insist, we are open to contribute to this situation of crisis if we will already had this real windfall profit, which is not the case.

Next, Elchin Mammadov then José Javier Ruiz and afterwards, I will share with you the rest of them.

Elchin Mammadov. I have a couple of questions, please. The first one on your carbon targets. I mean, if I read it correctly, you haven't changed that much, even though AVANGRID has just brought forward its decarbonization goals and expanded the scope of its decarbonization target. Is it because you're seeing more emphasis on energy security and therefore, fossil fuels? Or are there other factors like Iberdrola targets being already one of the leading in the industry? So this is the first question. The second question is about the renewables. What's the biggest pain point that you're seeing for the industry? I mean you mentioned a lot today that supply chain issues, regulatory uncertainty, this inflation, et cetera. What is the one key problem for the sector that you're seeing or maybe rank these in terms of their importance in terms of a headwind?

So on the first one, what we are seeing, our target in the group is in the Scope 1 and 2 to be carbon neutral by 2030. And that group -- that means in each country, what we have to take a decision on this respect in many fields. So either because of -- of course, we are not investing in a new fossil fuel power plant, either because we rotate the asset of those one, either because whatever thing we find out, mechanism for compensated, but I think that the group target for 2030, all the group is going to be already for our production carbon neutral. The second one is related to renewables. Well, I think we are seeing that I mentioned as well before. So I think this energy crisis is already -- is an opportunity for decarbonizing and for becoming self-sufficient. So I think the fact is some countries like United States, is already utilizing this thing for really making certain kind of incentives for accelerating the construction and renewable, accelerating the construction of hydrogen, et cetera. And in Europe, I think RePower for Europe is in this sense as well. I hope that today, certain of the bottlenecks we have been suffering for the last few years related to a permit, European Commission is going to announce, so they are going to present something to try to accelerate that one. Saying that, so we are not already in some countries having the attractive environment, which is needed for this acceleration of construction. So I think the fact that the problem this crisis is gas and in some countries is taking measures against renewables, are not facilitating, incentivizing that to move faster in this direction. I hope that all those things already -- will be already a bad dream and they will come to normalities as soon as possible because the solution is more renewables. The solution is not more fossil fuels. So I've been -- I had already in my time in the sector have already suffered three energy crisis. If we are not doing the necessary now, I think we will come another four energy crisis, and the problem should be the same. So now it is Russia, before it was already in the Middle East. Afterwards it should be, I don't know, okay?

Okay. Now is José Javier Ruiz. I'm going to put more order in the questions. [indiscernible] and then this [indiscernible] for as well. Of course, Javier Ruiz.

There are two. The first one, regarding your first slide, electrification, has this energy crisis change in any way the way you were thinking about electrification? I'm talking about timing and the penetration targets that you were seeing in 2040, 2050? The second question is about your plan beyond 2026. So you seem to be projecting a big ramp-up in terms of investments, up to EUR 15 billion, EUR 17 billion CapEx per year. My question is what is going to change that timing? Is there any possibility of ramping up earlier? What do you need to change to move into those levels of CapEx?

Well, I think on the electrification, I come back again to the same point. I think this crisis has illustrated that if instead of being so slow in building renewables. We had already been much more agile. If instead of being so slow in electrifying certain industrial and consumer uses. We will -- we had already been more agile in installing heat pumps in the homes and electrifying certain industrial things, I think the problem will be already less than it was than it is now. So I think the electrification, in my opinion, and I think that is what European authorities is already providing with the RePower of Europe is how -- how to accelerate and to avoid. And that, again, we offer the same thing. And the solution for the -- in many countries is use the natural resources we had. I think in Europe, we have no oil. We have almost no gas. But we have sand, we have wind. We have in certain areas huge resources for offshore wind. In some countries has already nuclear, still power plant. We probably they can be extended it in some countries, those ones we politically. And other countries, they decide to make nuclear with their own resources, but we have no more things. And I think that's why -- and that is going to help in to accelerate that one. The second thing is the plan '26 to 2030. So I think we are talking 65 to 70. If I divide by 5, I think it's EUR 12 billion to EUR 14 billion. So I think we are already now in the range. We take already in the organic one. We are in the same range, 36 in 3 years is 12. So I think it's a bit more, but it's not much. Taking into consideration that we have quite a few offshore, what is going to be building in this period. I think it's offshore, it is multiplying by 3x the average of CapEx per megawatt to another one. The second thing is the point you mentioned about electrification. So we assure the electrification is going to increase, hydrogen. So in hydrogen, another day, I was making some numbers. If Europe would like to rid the 10 million tons target by 2030, Europe needs to make an extra investment that represents something like 250,000 to 300,000 new megawatts in Europe, is 30,000 per annum. That means EUR 300 billion extra investment, a part of another one. So all those things have to be already done in the second part of this decade. If not so, I think that all the target fix are absolutely useless, but it's going to happen. I think the world is moving in this direction. I think already, in meetings with many colleagues of the industry, you have the industry, they are very focused in trying to modify their processes to make their process more electrical, to use introduce hydrogen in more processes and I think that's why I think our investment in the next period is not anything extraordinary we have not really made. We are making already now. I think this year, probably going to make EUR 11 billion or something like that. So I think it's not already to make EUR 11 billion to make EUR 12 billion or EUR 13 billion is not a big difference for us, especially when we have already 24,000 megawatts ready to build. So I think I need to ready to stop a bit because there was already more opportunity of making that a part of the electrification and distribution. Now Gonzalo Sánchez-Bordona at the back of the room; and then Javier Garrido, sorry.

Gonzalo Sánchez-Bordona from UBS. I have 3 questions on my side, please. Can you provide us an update on the PNM acquisition situation? What's going on? What is the timing you're expecting there? And also, since this is a significant part of your CapEx plan, if the deal doesn't go through, what would be the alternative? I mean just doing other investments during this time frame over the next 3 years? Or it will be just eliminating that? And also related with that, I think you said that the contribution to the net income target for 2025 is negligible, but if you could confirm that or provide some guidance that would be great. Then on -- on the reduction of cost of financing, could you elaborate a little bit on the assumptions that you are doing there? If I understood correctly, and please confirm if that's the case or not, you're assuming that there is a reduction in interest rates in Brazil and then the rest of currencies remain stable, and therefore, there's flattish evolution for the rest of currencies. But I seem to see a small reduction in 2025 on the cost. If you could elaborate a little bit what is behind those numbers. And then the third question is related with the partnership's approach. And obviously, you've been quite successful in the past few deals you've done, given the difference in cost of capital on your side and I'm assuming on the investor side and create a significant value on those transactions. So I was wondering how are you seeing this situation as it is evolving. So you obviously engaged in several conversations, I would assume on these kind of deals. So if you could provide some details on how those conversations are going? Are you seeing a significant increase in the requirements in terms of yield and whether this could threaten to some extent, the numbers you just presented?

So the first one related to PNM, we are already quite comfortable that the deal is going to happen. But I think it's -- the point of that one, as you see, if by chance is not happening, you see in the next, what is the consequences for us, which is not affecting much to our contribution. It's very little contribution in this period. It's reducing the debt. So I think they give room, as you mentioned, for another investment and we have plenty of opportunities for investment and we will, so which I think -- but we are quite convinced that the deal is going to happen. So I think that one. In cost of financing, Pepe?

Yes. Well, Gonzalo, what we have been using is basically the market estimates. You have it in Page 91. Basically, this market estimates what are looking is at the end of the year. As you know, we typically use long-term funding, fixed funding. And this is more or less you know what drives the cost of debt independently. To the fact that, obviously, we have part of the debt already fixed, okay? But as you are seeing, for example, we are expecting that the Brazilian real will move down at CDI from levels of around [ 1,375 ] to around 8% in '24 and close to that in '25. And these are basically the numbers that are behind our estimates as you see. We are expecting that sooner or later, inflation will start to come down and that somehow interest rates, especially in '24 and '25 will start to move down slightly.

So I think in the point of partnership, I think you can already add whatever you like, Pepe, but I think what I can tell you is I'm receiving more calls from private equity funds, which are ready to participate with ourselves in whatever able projects. So I think our problem is to make a choice what is the right one for that one. I think the appetite is there, Pepe mentioned, but finance between personally, visits of people from different regions and from different countries and from different geographies and ready to be our partners. I don't know because our business are very good because we are very sympathetic because of all things. But I think my point now is to say no to who we have to say no, because there are very many who would like to be our partner. But Pepe, you cannot take whatever you want.

You're absolutely right, Chairman. I think that we are an attractive company for equity funds. I mean we are a solid company. We have a track record. We are a well established. We are a worldwide leader. And I think that we provide as the Chairman was saying a lot of, I would say, credibility for investors. In addition to that, I mean, it is true that some of the equity funds are -- or the private equity half debt, but there are some others that are equity, purely equity. And still, they want to deploy a lot of capital because they have the mandate to do that. So as the Chairman was saying, at this moment, we have a good or a lot of interest in, I would say, in all of the assets that we are analyzing at this moment to -- in which we are looking for partners.

Javier Garrido, then, Rob, Fernando, Anto and this...

Javier Garrido, JPMorgan. I have 2 questions on returns. The first question would be on the U.S. networks. If I understood correctly, the CEO said that in the trade cases, you expect a broadly stable return on equities. This is coming in a context where interest rates have increased significantly in the U.S. So how do you look at the value creation in the U.S. network business? Should we expect to see a decline in spread in your returns versus the cost of capital? Or are you ready to beat those return on equity expectations given the incremental size and incremental investments? And then the second question would be on transmission. We have seen a few of your transmission projects that have been facing obstacles, like the Western Link or Mapfre. How do you look at the returns from transmission projects? Are you expecting higher returns than in the traditional distribution network business? Are you adjusting it to take into consideration higher risk profile? [Technical Difficulty]

We were going to have compared with the cost that we have are going to be maintaining the spread in the U.S., may be higher. There is one thing that is very unique that most of the regulators now are very aware of the renewable penetration that is needed in the U.S. The U.S. needs a lot of infrastructure reinforcement for penetration of decarbonization. This is a unique opportunity. Many regulators, especially in New York, are putting in place a special capital investment programs in order to invest in a specific decarbonization projects that are very, very -- it's like apart from the ROE from the traditional assets. So that gives us a lot of flexibility. And also for us, is a huge opportunity because we can transfer a lot of knowledge that we have in other regions about all these digitalization. So it's -- for a company like us, the U.S. is a very unique and very targeted market, and I expect to have the same spread or maybe higher. In terms of transmission, transmission for us is something like this different from distribution. Distribution will become one of the key development decarbonization capital boost for the future. If you think about how much high-voltage line, you have to build for connecting all these offshore wind farms that are developed, for instance, here in the U.K., we have this offshore in the North. We are very excited about what we have seen in Australia. Australia is changing completely the mix of carbon to renewables, and you have to completely redefine the transmission all over the footprint of the country. What we have and we have shown is a unique track record of being the most competitive company when we are putting transmission assets. We are very confident that this transmission and this asset will have similar or maybe higher return than renewables and might be very similar to what we are seeing in distribution. But we are very -- we expect a lot of growth of that and HVDC technology, for instance, as I said, we are very -- we have a strong technology there at least HVDC and these projects. So we expect the transmission will be a huge vector of growth for renewable and decarbonization in the future.

Rob Pulleyn, next. And then this gentleman, I don't know you, who are you, sorry, in the fourth line after Rob. Sorry, Antonella and Fernando Lafuente. We have time for everybody.

Rob Pulleyn from Morgan Stanley. Two extra questions, if I may. The first one to Pepe. Regarding your funding of the CapEx program, maybe we ask how much earnings dilution you associate with the asset rotation and how much of that is in the 2025 target as opposed to later in the decade, just to cross the T's and dot the I's. And the second one, returning to the comments on hydrogen. Could you comment or guide on how the economics look on hydrogen projects, whether that's in IRR or other terms? Are you still awaiting support schemes? Could we see a European version of the IRA to help? Or are we finally going to see this next-gen EU funds put to good use. And lastly, within hydrogen because I think it's a fascinating topic. Where do you stand on the virtual pipeline of generating hydrogen elsewhere in the world to import into Europe? And can Iberdrola play a role in that?

Okay. Yes. Well, we have absolutely included the loss of the contribution in the asset -- of the asset rotation in the '25 results. We've lost -- we have included the loss contribution, and we have not included the possible capital gains. So -- but saying that, it is true that we are seeing an increasing in our minorities of around, I would say, EUR 200 million, but that has to do also with the results of the increasing results of the new energy and all these sorts of things. I cannot give you an exact number. I can give it to you later, but I would say that -- but be sure that we have included the loss contribution of the minorities in our results.

So on the point of hydrogen. So the first thing is hydrogen is electricity in the form of gas. So to people talk about hydrogen, and hydrogen is renewable electricity, transforming us and the huge investment is in renewables. So the little investment need to transform the electricity into hydrogen. So the investment required for making that one is not good compared with the power we need to be behind. So the first thing. So for us, what is? It's an opportunity to have already a new market for our electricity. So I mentioned before, in the case of Europe, the 10 million tons of hydrogen, which Europe has already fixed a target for 2030 represent a total investment of EUR 300 billion of new investment in power and renewables, probably EUR 60 -- EUR 50 billion, EUR 60 billion more in the power for making this hydrogen. But I think the majority is that one. So what is our approach? Our approach is we are energy producer. And I think we would like to be in all the value chains of this energy, and we are facilitating that one and the way you are making that one. But not only hydrogen, hydrogen as an alternative solution for electrification, we are doing, for instance, in Barcelona. Barcelona truck, buses are powered with our hydrogen, which is already made with our own renewable electricity. In the south of Madrid in Puertollano, we have already built the largest hydrogen power plant in Europe. But it's beside a huge solar power plant, which is the one which are providing the electricity. So probably 2/3 were already stay and visiting that one. 2/3 of the investment -- more then 2/3 of the investment is connected with the power needed for making the hydrogen. And what you're making with this hydrogen, transforming in ammonia. So we have already finding a new customer than before this customer was consumed this hydrogen produced with natural gas. Now we have a customer, which is consuming our electricity in form of hydrogen for making their own ammonia. We have another project -- a different project on another places. We have announced recently a project for making methanol. So this methanol is made with as well with natural gas, making hydrogen with natural gas and with natural making methanol. So we find out a new customer, which is going to consume our electricity in form of hydrogen for transforming is hydrogen into methanol. So I think that is our approach. I think we are a power company. And we are already looking all the routes to market, Armando was mentioned, and that is a new road to market for selling our electricity using those things with strongly -- are strongly needed. The fact is that we have also the skill for making that one that we have already built the first hydrogen -- large hydrogen -- large-scale power plant in the south of Madrid. We have already -- is already making for transport. We have already another country like United States is a good opportunity for improving the profitability of our existing power plant. So we have already Texas an agreement with Sempra for making already green hydrogen to be transformed in ammonia using the electricity that our wind power plant are already now producing in Texas. Probably that will give us some extra megawatt -- extra dollars per megawatt hour for making that one instead to sell into another fleet. So that's why I think hydrogen is electricity in the form of gas, I think put in mind. I think those ones we're talking about hydrogen is electricity in the form of gas. And the best way for making that one is in site. Don't make dreaming to transport hydrogen from long distance. That is 3x, 4x more expensive than to produce the hydrogen in site what is required and to make a little or large hub where you can really make the distributed hydrogen around. So I think that is the common approach of most of the European industries. So generate electricity, which is cheaper, transport electricity through the point it was mentioned about by Armando. Transmission through very efficient transmission lines into the place where this electricity can be convert in hydrogen and then hydrogen convert in water with ammonia, chemical products, methanol, whatever thing.

Mark Freshney from Credit Suisse. I have 2 questions for you, Mr. Galan. Firstly, on the levelized cost of electricity. I mean, for the first time ever, the levelized cost of electricity from wind and solar is up because of debt and equipment costs. And my understanding is that's a psychological challenge for many regulators and governments after being used to seeing costs falling for so long to get in the mindset that this renewable energy is now more expensive. So my first question is, how are you finding that debate? And secondly, I accept that's the 24 gigawatts, of which only 6 gig will be built near term. But permitting is the #1 challenge. I think you've even admitted it. Clearly, that's got to change in Europe and regulators will say, look, energy's expensive -- or government will say energy is expensive. But you know what, I'm not going to damage property rights. I'm not going to hurt my voters. How do you see that debate evolving? And do you think the politicians you engage with are going to get their head around permitting?

So I think my feeling is precisely the opposite. So I think it's true that because of this crisis, the raw material prices are increasing, but it's increasing not only for renewables, it's increasing for fossil fuels as well. Turbine -- gas turbine is more expensive. A power plant of coal is more expensive. The CapEx is much higher. So I think it's -- what is the alternative? The alternative is to build more combined cycle of gas, which I think we have increases because they still because of the oil components are higher or to make coal power plant and then give to you the example of Australia. Australia has plenty of coal, plenty of gas. Therefore they approved recently, a deal of the carbonizing because they have the chance in this moment to decide what to do? The coal power plant are -- at the end of the life, they have to decide to invest in new coal power plant or to invest in renewables. And the parliament and the government has already approved to invest in renewables and to keep already the coal in the -- on the ground, which I think they can keep for future generation they need it. Because it's cheaper. So I think today, still the CapEx is cheaper than renewables one. And the price you can obtain is lower. But I think that is the big problem we are facing in this crisis. We have already been for too long, looking only one part of the equation, which is cost, cost,cost. And nobody was looking enough in self efficiency, self efficiency, and self efficient. And now we have not chips for our systems. We have not already steel. We have not already copper. We have not already ammonia. We have not already even bread. So grain, because we've been looking cheap, cheap, cheap. So I think, in my opinion, the world is moving now in opposite direction. It's looking to be in all sectors, enough capacities in case for being less dependent on third parties. And I think that is a drive, which is changing because what we are suffering in those countries, we have not really built enough industry for already not to see 100% self efficiency but enough capacities. We suffer with the COVID. With the COVID, we have no mask. In Europe, we have no mask. We are not already [Foreign Language]. Breathers, no breathers -- ventilators, there are no ventilators. Europe has no ventilators. Europe has no mask, why? Because we're looking at price, price, price, cost, cost, cost. So we have to look another thing a bit. So now we have insist on that one, the opportunity describes to become more self-sufficient, self-sufficient, self-sufficient in all fields, not only in energy but as well in many components, which are already we need in our industry. And I think most of my colleagues in Europe in the different associations where they've belong are precisely looking in this direction. How we can already produce chips in Europe, semiconductors in Europe? How we can already have certain capabilities in -- capabilities, not 100% capabilities in solar panels, how we cannot lose our capabilities and we do mines, et cetera, et cetera, et cetera. So that's why I think my point is, please sail in the opposite direction. It's true that today, I think the learning curve, probably in certain technologies is going to continue decreasing. Another one could reach certain level and I think you cannot reduce the price forever. So it reached a moment they think that is not possible as much as has been up to now. But that is not the driver. Today's still renewable by far cheaper than any alternative opposite fields by far. CapEx, no OpEx and no variable costs by far.

Antonella?

Antonella from Citi. One question on your return on capital employed. You basically reallocated your CapEx even within the network, it seems to me that you reduced a little bit the exposure to Spain, increase in the U.K., you increased in the U.S. Can you elaborate on that is because you think that the framework, the regulation is different and therefore, you will have better response from the other country rather than the Spanish one or it's because of specific projects? Similar question on the renewable. I noticed that you have cut a lot solar, and I think you cut Spain more than other country U.S. as well. Why those country, why you decided to invest less in this country rather than in others. So if you can elaborate on the -- where you think there will be a better return in the future?

Pepe, you can make the first one, you replay the second one, and I will add whatever afterwards.

Well, I -- well, I basically think that or we think that we -- the risk return profile in countries like the U.S. or the U.K. are better than today what we have in Spain. And I think that one of the key strengths of this group is the diversification. Unfortunately, we are suffering in Spain, decisions, which -- we don't agree and which we challenge the last -- well, I mean, you can read the newspapers. So I think that we feel much more secure. We think that the regulatory certainty is higher in these countries. And also the potential growth, the optionality, the opportunities as the Chairman was saying, PNM positions in certain areas with high growth for the long term, where there is lots of opportunity in a very large market where we can -- where we think that the value creation for the long term is larger than in Spain.

In terms of renewable, as I was -- mentioned during my presentation, we are seeing the whole portfolio as a package. As I explained, we invest when we can get more revenues from these assets based on the road to market we choose. So this is how we are delivering that. So for instance, in Spain, we have a huge amount of customer footprint, and we are replacing some of the technologies that we already have for renewables. So this is creating us more value. And this is why we are choosing that. And also in the U.S. because you know, as the Chairman is saying now that there could be a more favorable schemes for the renewable. But again, it's not a matter of countries. It is maybe the resource, but it's a matter of how we can produce the higher revenues for the assets in all the pipeline that we have.

So Antonella, I would like to add that both are mentioning. Certain -- the investment, that we are looking what are the countries which are already as Pepe was mentioned, which are providing more stability, predictability, rule of law and better returns. So I think we are already -- we are not the owner of the money, the money is yours. So I think we have to look already what is the best places to allocate this money. And those countries which are offering better return, more stability, more retail, more better rule of law. I think we are already looking with better eyes -- with both eyes. The second thing is in terms of the best partnership. Go to the best as always. So firstly, those things which I'm not fitting with our strategic proposal. They have a business where you have been in the company or we are in countries or we are in regions that we have to spread and I said, what we can do in a place that we have already extra megawatt, which is peanuts and is a part of the area what we have said in terms of that or what is -- how we can already have better returns, making some partnership with us in order to therefore already provide certain capital in a base which is cheaper for us another manner. So I think those are the alternatives that we are making. And the investment, of course, we are -- in some cases, we are seeing that we are divesting - not expecting to have a special and some extra capital gain. If we gain -- capital gain, we'll be delighted. So [indiscernible], we will be delighted to obtain a good capital, but it's not in the plan, that one. But I think if we have that one fine. But the thing most is to reorder our assets. I think we are talking about 3% of our asset to be rotated with these peanuts so which I think is -- I think you can see that in a company like us -- like ours, we have already in countries in region in matters, which is not really fitted very much with our target. But I think in the first point, which is important is we are looking very much. When we look already, where to allocate our investment. Apart of the things we are saying that we prefer more in the case of offshore because they're giving -- already providing predictability and stability. We have already fixed terms, et cetera, et cetera. And we are already -- all those ones. But we look very much what is the countries which provide stability, predictability, rule of law. And I think that is one of the things we are systematically doing. So I think in this moment, it's a very attractive, United States with IRR. Of course, we are going to look with this to make hydrogen in the United States because I think hydrogen is providing $3 per kilo. So there are other countries giving $4 per kilo, probably will another country as well, so which is obviously, okay?

Fernando Lafuente. This in the second line, sorry.

And actually, for Premios here to London again after such a long period. Three questions for me, please. One, it's a follow-up on the comments the Chairman just mentioned on asset disposals. I was wondering if -- what I understand from the plan is that you are basically considering disposals of minority stakes in certain assets. And peanuts, let me say, peanuts, smaller assets in countries where there is no fit. Could you consider if there is a, let's say, a huge price to sell a big asset, just a full asset or the strategy is only minorities and no matter what.

As you can already said because most of them are already not in the market. We are going to divest are well known. So there are not heavy secret, that you can already mention that some of them not already know. We are receiving offer for that one because in the market, another one are in talks on those ones. So it's not already a mystery what we are going to make, but you can already add whatever you like to.

As the Chairman was saying, in this moment, basically, we are looking for partners. And even in the asset rotation, it's meaning that we are selling a stake, a percentage. Sometimes might be -- would be a majority stake in the case of Mapfre, although we continue to be the industrial partner. The philosophy here is that Iberdola continues to manage these assets and there are some assets that due to -- they don't fit on the strategy that we might sell 100%. There are a couple of them, which we are right now negotiating which is 100% of the asset, but they are not very large or they don't fit in a specific territory where we think that there is no critical mass. And in terms if there is -- as the Chairman was saying, if there is a big asset, I mean, the money is not ours, it's yours. So if the offer is very good or whatever, obviously, we will analyze everything as always.

Two further Questions. The first one is on your pipeline, pumping pipeline in Spain. You mentioned you have, if I'm not wrong 4.5 gigawatts of pumping potential pipeline facilities in Spain. What do you need to go ahead with these assets? Because to me, there are -- pumping facilities are quite relevant in the context that we do. You've always defended that these are the real batteries, and I basically agree with you. So what do we need for you to have these facilities in operation and best case or assumptions when do you think this could happen? And the last question, maybe it's for the Chairman on this debate on the potential changes on the way the price is fixed in Europe in this marginal system. I would like to have your views both at European level and for a country like Spain that probably will have a higher rate of renewals than any other in Europe. Thank you so much.

For pumping storage that I agree with you that it's very important, especially in some countries that we have, we have very important assets in hydro. And I think this is something that we have to foster as fast as possible. But the question is very simple. It's regulatory system that could be stable and predictable. You know this investment is very huge in capital investment. And it's very efficient, but we cannot be making this investment based on only markets as the other capital we are doing. So the thing we need is to have a proper regulation that the government clearly have an idea that the pumping storage is a huge, huge advantage for the reorganization of the country. This is what we need. And this is what we are asking because in some countries, there is a huge potential for that. And this, I think, as I told you in the presentation, is the best answer for that for storage.

So in that, I think is -- well, we are in pumping storage, we just finished one large pumping storage facility in Portugal. So which I think what do we need already -- to have already the framework to make that happen. And I think in Portugal, Tamega is a pumping storage facility. Its 1,200-megawatt pumping facility, which is 3 dams, which is playing with the water. So we have recently duplicated the capacity of Cortes-La Muela, which has been inaugurated by the [indiscernible] a few years ago. And we have already a couple of -- 2 or 3 projects in this moment as well making in the country. But what is needed, so to make the framework for already make that possible. I think in Spain and all Europe needs already storage capacity. Now is in the mind of the regulators in the different European NPL level, how to encourage to make already more capacities on that one. In pumping [indiscernible] is the most efficient one, especially in countries like Spain, and we have a lot of dams but we have already very different height between one and another one in another country, which are flat, is not so easy. So related to the market changes. So the first thing is the market design in Europe has been standing -- that's not my words -- they are the words of the European Association of regulators, which are represented all the European countries regulators. So it's not my words, only is the word of that one and the words of the in the European Commission. So the market we have at present has already performed very well. So I think Europe, we have already during the time that was already implemented 30 years ago. We have already -- had already the European electricity supply problem. The investment has been already done in the world system. So and the fact when they are already -- the demand is very high, the prices and the offer is not enough the price goes up and vice versa and now we are very nervous because the marginality of that one are not , but we have the marginality during the COVID. And during the COVID, the prices were depressed, very depressed because the demand was very low and we are forced on that one. So it works. Saying that I think it's true that in future market, a future system with no renewables. So need certain adjustment because you need to guarantee 24 hours, for instance, pumping. So you're going to make bumping just thinking only this marginality because probably that is not enough for making already that in the fact in certain countries, which are already just making a special treatment for batteries or for storage. They are making a special option. So things to be adaptive. But we have to be very prudent and very detailed analysis on that one. So I think that European Commission is going to analyze that one with time enough with the presence of a building with everybody involved how to improve the things. They are areas, for instance, capacity mechanism. It's going to be needed, systems like storage. So how to make already a battery, which is going to bear only for 1 hour, how to justify that one, how to work already, how to improve the PPAs, cross-border PPAs, which is absolutely needed. So today, it's very difficult to make cross-border PPAs because every country is doing whatever they like. So how you can make already a PPA in Germany with energy produced in Spain, it actually the rules and Spain [indiscernible] in Germany. So all those things, all those things have to be analyzed. So -- but my approach and the approach of the European authorities is that they are going to be very prudent in the analysis. We participate in all the agents on that one to make something with at least stay for another 30 years and provide the security and the use of security and [indiscernible] that Europe require. So I think those are the questions. Okay?

Okay. More questions?

from -- with Scotiabank. I just wanted to ask about the problems that are facing some of the wind turbine producers. And how do you -- if you see that as an impact in your growth business in the wind market?

Armando?

Okay. What we are seeing now is that there is some kind of movements. But on the other side, you have to think about how -- which is our relationship with these big players. This is the difference we have. We have been for years working with one of these players, fixed face and also the pipeline that we have in France. So the competence that we are having and the conditions that we have with all those manufacturers is different. On the other side, I want to point out what I said, most of this plant is already secured. Everything is secure in terms of the engines of the offshore. We have the solar panels already secured, and we have most of the offshore wind turbines already secured. And we have any of them that is still missed, but is based on FID conditions, sometimes you have to design the machine, but we have frameworks, global frameworks for many years with one of these main local and global players that we are still in place.

Okay. Is there are more, we are going to move to the web, [indiscernible] afterwards. We have several questions from the web. Most of them has been already answered, and we have questions from Javier Suarez, Mediobanca; Jorge Guimarães, JB Capital Markets; Ahmed Farman from Jefferies; and Michael Charlton from Santander Credit. The first one is, do you plan to close all your CCGTs by 2030?

Well, it depends. If they are not needed, yes, but I've not seen the needs were not to be needed. Probably, they will be needed, but for a very, very short period of time, which I think been for some time. And I think we have already -- we have to guarantee the supply. And I think we will keep already those power plants, we can already guarantee the supply. So I think it's not in the plans to close the one, but I think certain operation will be minimal on those ones. If the renewables is already making -- is already done in that way which European Commission and European authorities is already foreseeing.

Next question is, can you share with us your views on how the European Union should ensure access to competitive electricity while ensuring security or supply?

Well, I think that is what they are already trying to make. And I think if the repower for Europe is precisely where they try to make, I think they're transforming the Fit for 55 program and the fit for self sufficiency. What is the repower for Europe is how to encourage, then how European will be less dependent of fossil fuel, how European will be less dependent on imports of energy for already making their supply in Europe. And I think that is what they're making. The only point now is that we are in the middle of stormy times and I think even there already this clear view and all these documents are this clear view are already, in my opinion, too flexible, in permitting each member of state to take their own route for temporary -- making temporary measures. But I think they are clearly staying that one that they would like to be more and more self sufficient. So the level of renewables in the European power mix is already increasing heavily. The level of the external dependency, they try to diminish. There are already planned for closing the coal. So -- and all those things are already there. I think they are working hard in this one. Unfortunately for them, it’s already in the middle of this crisis. They are forced to use the Article 122 of the European legislation would allow the governments in the European Union, the European government and the European member states to take decision without passing through the European parliament and to make already this in a hurry on this one. So I think that is going up the stand. It was applied probably the first time only during the during the period of the COVID and now this 122 is as well being used for this energy, particularly in a situation, but I'm sure that is ending. And I think that is going to be one of the things will become already more normal. They will use already the normal legislative procedures for making those one, with -- that gave already more certainty and more legal certainty for all the investment of everybody.

Next question is related -- is for Pepe and is related to the role of the hybrids in the funding strategy of Iberdrola and taking into account the government scenario.

Well, I think, hopefully, the cost of fission high rates will come down because probably -- we are suffering from the volatility of the market right now. Nevertheless, as we have mentioned, we are assuming that we maintain the outstanding amount of hybrids. Our strategy there is to maintain the hybrids as a source of funding with an equity component. And obviously, we are going to try to preserve that. So that is basically how we are looking to this situation right now.

Now is the time for [ Firmino ]. The question from [ Firmino ], that is the last one.

Thank you so much. I mean, actually, it's 3 stories, but first is, Galán, to thank you for the 20 years that you've been in the company, but in particular, for the 15 years that you've been Chairman and CEO, and we've seen the best for Armando. And what -- I've been a shareholder for Iberdrola for 20 years. And in the name, in my personal name, in the name of my shareholders, and including the Qataris, I want to thank for the work that you've done. And I was just making some calculations, including dividend. You delivered, over these 15 years, a return of compound 8%, which is twice the market. So not many people can say that. And I do remember that at the time when you took over, Iberdrola was not even on the top 5 companies in Spain. And now it’s the second in this just EUR 10 billion from the first, and you are catching up quickly. But my question, probably 3 stories to ask 3 questions. I remember once many years ago, I went to your office, and you promised -- I'm going to send you a cartoon from Financial Times. You certainly remember, I mean, for the younger people that the -- it's was a cartoon that the Financial Times -- it was an aquarium, and there was, like, small and big fishes. And the big fishes were eating the small fishes and each fish was a European utility. And in the end, and correct me if I'm wrong, there was just left, EDF and E.ON, wasn't it? And all the fishes were going to be eaten. And you sent me then by mail, you see this one. So my first question is this, I mean, imagine and ask the guys from -- you just had an interview with Financial Times, if we're doing now an aquarium that was a world aquarium, right, and we had, like, a big fish called NextEra and then a smaller one called Duke and another one called Southern and then Iberdrola, the 4 largest utilities in Europe, what this aquarium will look like in 5 years' time? I mean, if I ask you to draw the cartoon for the Financial Times this time, how will this aquarium look like? I mean, my second story is -- also with a question is this. I mean, not many Chairmans and CEOs can tell this story. I remember in 2007, I mean, for the younger people that I -- it was the hype of the market. And the bankers, that some of them convince you to sell Iberdrola renewables. At that time, actually, I remember when you came to my office, the pitch was EUR 7. You end up -- the bank has ended up selling for EUR 5.3. And at that time, there is a lot of analysis what was value was the future pipeline. So what you're going to build in 10 years' time, and then they would do a very nice ECF. I mean -- and, you, did what I consider a class act. The music was there at the time, and you served very well us, Iberdrola’s shareholders. You sold it for EUR 5.3. And then 5 years later, you bought it back for 3 years because the music was a different one. And in this journey, you generated EUR 2 billion of capital gains for us shareholders, so thank you so much for that. So my second question with the second story is, what's next? I mean, when I look of your businesses where I can see that you can generate significant value, and I -- what's missing, really? I mean, I'm very excited about the media business that you have in Australia. I think that you can build there an amazing business. And to what extent that would pass also to have a listing there in Australia that allow you to grow faster? Of course, I'm very concerned, I mean, it were expected on the U.S. on Avangrid that is finally, we, shareholders, are going to see value. And also, I'm pressing, mark certain things when I saw Total certain having a great move in India and said, "Where is Iberdrola? Why Iberdrola is not there?" And I have -- I mean no doubt that you and Total will be -- if we include the fishes outside, that will be the 2 European leaders in this journey. So my question to you, I mean, not me, but another guy in 10 years' time when it wants to tell the story, what will be the new Iberdrola renewables that you can cash for us, EUR 2 billion of capital gains? And the last story, I mean, it's -- I was very happy when you answered the first question, dividends, dividends, dividends. And you remember this story. Once, I went to your office in Madrid, and for those that haven't been there, he has nice paintings on the wall. And then it was 2015 and on the end of the meeting, you kind of hint -- let -- well, maybe the dividend. And I remember, I turned it back and you were, like, saying -- and I told, look, if you cut the dividend, I'm going to come back here and I take that painting off the wall. I mean, we're profitable at that time. My compliance department didn't allow me to come to your office to take the painting, but you did cut the dividend in 2016. But why I'm telling this story is that -- I mean -- and since then has been sacrosanct and thank you so much. And I think a lot of these return comes from debt discipline is that. I mean, someone was suggesting script and all that kind of c***. No, keep the share count flat. And as your CFO or your great CFO was saying, if there is something that creates value, we are here to give you money like we did in 2006 when you bought ScottishPower and even Energy East so keep -- but my question to you is that is it possible, because my mother is 92. She is also a shareholder of Iberdrola and she likes to keep your purchasing power, to keep this growth at least with inflation and whatever inflation and don't pay us more when you have a great year, but save for the -- for those years. And if you can keep that discipline, I'm sure that in that aquarium with the 4, you'll be 1 of the 2 left. So again, thank you so much, I mean, in everyone's name, including the Qataris because they promise if Portugal goes to the World Cup final with Spain, we'll be there, the 2 of us and only 1 will be happy. But the Qataris certainly know. They thank you also for these amazing returns.

Thank you from me. It's very glad, we know since a long time. I think he's seen the 2001, when I joined the company as CEO of the company. And afterwards, as you mentioned, 2015, which I became Chairman and CEO, how many things has already evolved in this period. But I think I would like to -- I have mentioned to you before, I think you were the first one that 2015 or 2016 or 2014, around those years, when we were already the company mark capitalization in '19 or '20 worldwide and EUR 6 or EUR 7 or whatever in Europe, and we were already in this, let's say, bought already with another fishes, to predict that we are going to become the largest of Europe. And we are going to become 1 of the largest worldwide. I thank you very much for that one, but I was not convinced that can already happen. But that's already happened. I think we are, today, the largest European company, almost 50% more than the next second one. We are 1 of the 4 largest worldwide. And the reason that 1 apart of your convincement and that is like that is because we have been very current with our strategy, very current with our delivery and we never lie. And we have to say something, black is black. If we have to say, sorry, I'm wrong, we said we are wrong. But I think we've been very current. And I think that is what we are already trying to keep in maintaining our strategy. Currency. Now it's this year now, as you mentioned before, let's present a wonderful plan. It’s always -- so no, we have presented you a plan saying, no, we would like to be -- the first priority is financial solidity. And that means that we have potentially sacrificed on other things. Potentially, the 1 can already run more than us on that one. Ingram was doing that 22 years ago and disappeared. Many of those were in the pot has already in a different position because it has not already have probably this already current and stable and predictable strategy across the time. So -- and that is what is our aim is to be able to give already those investors at your model who you mentioned. And another one of that one, then when we have our shareholders meeting in Bilbao, unfortunately now less with -- because of the pandemia with 3,000, 4,000 people attending with most of them already pensioners. So I would like them as [ day ] is mine. It’s mine in terms, one is because we are doing something because they are giving their money in our hands to provide them something for their lives. And I think that is our aim. I think to put in all our things this social part of our responsibility, including our shareholders as part of the social responsibility, because we took such a responsibility in many things, shareholders shares social responsibility as well. So that's why who is going to -- why we are -- what is the -- why we are not in India? I knew India very well. I know India since the '70s. I have been in 2 factories for batteries in India in Gujarat in the 70s. So I know India very well, very good friends in India. But I think at the end, you have to look, again, alternatives. They have better places to put our money instead of India. So it looks -- we see then Australia is offering better things for us than in India or United States of Germany. So -- and not saying that India is going to offer opportunities, but I think we have to make a choice on that one. So on that point, I think what is going to be if we made this spot in the future. Certainly, we would like to be one of those. So no doubt. I don't know how many, but we would like to remind in this spot, so -- and we are doing our best by making that happen. So that's clear. Okay. And thank you, [ Firmino ], for your words. I feel you are a good friend of the company. You've been always a good friend of myself as well. We have already an opportunity of sharing a good wine. I discovered new Portuguese wine, which is the new grade, which is the -- let me -- I have notes here is -- I don’t remember, but which is in the north part of Portugal in [ Ribeira De Pena ], which we can already do any time. So thank you. Any more questions?

No more questions, you can close in this and move in the event.

So thank you very much. Thank you very much for attending this meeting. I hope that the plan is already -- we are convinced about the good positive things of this plan. And I now ensure that those wanted to deliver, they will deliver and has already delivered the previous one. So thank you very much to all of you. Thank you.

As you know, we have, after the lunch, some presentation regarding the, as I mentioned before, regarding the ESG topic. So I invite you to go to the next room to enjoy this served lunch. Thank you. [Break]

Good afternoon, everybody. I hope you are enjoying this day full of positive perspectives. Now we're going to start our first ESG Day with the following sessions. First, our ESG Director; Roberto Fernández Albendea, will announce our new ESG objectives for 2025 and 2030. Then our Head of Innovation and Sustainability, Augustin Delgado, will tell us about how we create value through sustainability. He will be followed by our Head of Human Resources, our Corporate Security José Ángel Marra, who will talk about how our people drive our success. Then our Chief Compliance Officer, Dolores Herrera, will share with you our solid compliance and corporate governance systems. And last but not least, our global cybersecurity Director, Rosa Kariger, will explain how the group faces this increasing risk by reinforcing procedures, systems and resources. After these 5 speeches, we will move on to the Q&A session, and we expect to finish our ESG Day by 3 p.m. I really hope you find it as useful and entertaining as I do. And now I pass the floor to my colleague, Roberto.

Good morning, everybody. It is a pleasure to be here back in London again after some years and to see so many familiar faces. We have this afternoon, some very interesting presentations from ESG Strategy of Iberdrola. And I will start with a brief introduction to frame all those contents by sharing you the principles that guide our actions and will also provide an overall overview on the main targets for the next few years. As the Chairman stated this morning, ESG is fully embedded in our strategy and operations. Therefore, it is a lot about long-term planning and needs to be treated as such. So let's start by the beginning. ESG has been a foundation of our model well before the acronym of ESG became popular. Why can we state that? Well, basically, because Iberdrola commitment with sustainable development, social dividend, share value and the overall of our stakeholders is rooted in its bylaws and corporate policies since many years. As Dolores will explain later, those foundational documents propose an integrated approach that needs to take into account industrial, financial and easy factors for designing the corporate long-term strategy. And in the following minutes, you will listen how we do that. The group activities generate enormous wealth and some very easy macro figures prove it. Iberdrola impacts on GDP for an amount larger than EUR 33 billion annually. Our investments in operations generate more than 400,000 jobs worldwide, and we have a tax contribution of close to EUR 8 billion annually. It is very important for me to recognize these contributions, because they also defined a company which is a socially efficient vehicle to create and distribute wealth amongst all the shareholders and stakeholders, too. But in addition to that, Iberdrola also generates value through the way we run our operations and through the commitment that we have with our stakeholders, pursuing to maximize positive impacts while avoiding or mitigating negative ones. The ESG of the site -- the ESG site of the business is structured and set taking into consideration 3 elements. All that we are presenting to you today is basically rooted in those 3 elements. First, and I said before, the company positioning, which, as I said -- which is said by the corporate purpose. We are here to provide healthy and accessible energy, which means sustainable, clean, green and affordable electricity. This proves to be a deep drive engine in background to our operations. Secondly, we look around our stakeholders to know what their legitimate expectations are and to detect material topics based on potential positive or negative impacts. Of course, we are applying a double materiality approach to analyze mutual impacts from the company to the stakeholders and from the stakeholders of the company to assure that we are able to respond in time and appropriately. And finally, we closed the loop by looking at you at the capital markets, expectations which we presume are summarized by the content of the requirements of the ESG rating and indexes, the large investors, institutional investors’ voting policies and institutional investors alliances. We listen to you all and from those learnings, we inform our actions and the targets that we are presenting here today. As you know, the ESG universe is very wide and especially for a company like Iberdrola, which we are worldwide operating in 5 main countries, 3 businesses, especially wide. Our approach needs to be comprehensive. But of course, then we need to take chances to make choices and to prioritize which aspects of the ESG we need to focus. The result of all that analysis taken into consideration the 3 elements, it's the market stakeholders and our governance system. The result is summarized in this page and in the following 3. Main areas of interest, as you may imagine, are decarbonization, water, circular economy, biodiversity, innovation, diversity and inclusion, health and safety, products and services, stakeholders' engagement, contribution to local communities and respect of human rights. Of course, then we have the governance side. The interest on a robust corporate governance model is always present. It is very transversal for the company. And today, Dolores will speak about that. And of course, our ESG financial strategy, ESG+F is, of course, of great interest for the financial community. But not also (sic) [ only ] for you, the institutional investors and the fixed income market, it is also relevant for regulators and public institutions like the European Union who are trying to find ways to facilitate the allocation of funds to those activities that contribute more to a sustainable world to a change in the way we operate. So please remind me here that Iberdrola has been for 6 years in a row, the largest corporate private issuer of green bonds in the world, as Pepe said this morning. Now we have 3 pages with the charts, 40 targets. I want to stop in every row this afternoon. But I will stop because -- mainly because many of those targets will be explained by the next speakers. Agustín will cover most of this slide. Those are environmental targets. Let me remark our net zero target for earlier than 2040, which drives also our targets on NOx decrease and water consumption decrease. We also have targets on customers. This morning, Mr. Armando Martinez, the new CEO, already explained targets on smart solutions and green hydrogen and energy storage. I would like to stress this is a very comprehensive, relevant and ambitious set of targets that prove that Iberdrola is taking the transition to a more decarbonized economy while protecting biodiversity very seriously. On the social chapter, José Ángel will get into details about relevant diversity, health and safety and training targets. We also have plans to reinforce quality of service, as explained also by Mr. Martin this morning. We are planning to improve quality of service around 10% in 3 years. You need to take into consideration that today, historically, we have much better quality of service and distribution than our peers. And still, we want it to improve. And also, we have relevant targets about the smart grids development, electric vehicle chargers, et cetera. The supply chain is a focus, an increasing focus of attention. You know that for many reasons, but also because it is subject to future European and national regulations related to due diligence on human rights that aspire to cover not only the company, but the full value chain. And for the reasons, we put these 2 targets. First, a target of 80% of local suppliers, which is a historical commitment of the company with the local communities when we are operating. And the second one, an 85% of sustainable procurement -- procurer-suppliers in our value chain. Of course, we're also committed to keeping a state-of-the-art human rights due diligence systems and a stakeholder engagement processes and models. Let me remind you that this year, we got the maximum score in Dow Jones Sustainability Index, 100 points for both, for stakeholders’ engagement and for human rights. And we also ranked, for 2 years, the only 2 years this index existed, in the ranking published by BHR of human rights in the renewable sector, 2 years in a row, leading that ranking. Of course, on cybersecurity, Rosa will elaborate on how we continue to strengthen our training and internal control. Just to finalize on governance, we believe we have an already very advanced practice. So the challenge here is basically to keep that already well-performing structure. You see that basically, we're focusing on keeping a very strong board structure, both from the independence point of view but also from the diversity angle where our company operating in many countries. We are looking for diversity in nationalities, diversity in skills, in backgrounds, et cetera. On the financial side, we have been providing the market with a recurrent flow of sustainable instruments that we include in green loans, but also in loans, sustainable credit lines and commercial paper. Our intention, as Mr. Sainz said today, is to continue issuing a majority of the new financial instruments under green and sustainable principles with at least an 80% of the total amount of the period. So this work as an introduction. I'm happy to hand over to Agustín, who will get deeper into decarbonization.

Good afternoon, everybody. Thank you. Today, if I should resume my intervention here, it will be our -- about our logo. Our logo that means that we want to create sustainable and exponential growth while getting greener and greener and be positive with nature. And this is the meaning of our logo and this is what I will try to explain today to you. So in Iberdrola, we have vision, and this vision, it is that we want to contribute to create an energy system that is positive with nature and also aligned with the human being. And we have been doing that for the last 20 years, but we acknowledge that there is a lot of way to do in the future. And there is, like, a triple environmental challenge today. Climate change today is the COP27 in Egypt. We are there. And we have been in leadership position in that for many years, but also the biodiversity crisis that is right in front of us, and we have to address it. And also the lack of resources or the need for resources for this energy transition. With this triple environmental challenge, we have also the opportunity to grow our business addressing them. And for that, we are -- I'm glad and proud to present 3 action plans addressing these challenges. That is the climate action plan, that is the biodiversity plan and it's the circular economy plan of the company with clear goals and objectives for 2030. And all of them linked also to innovation that will help us to address all this challenge and to take the opportunity of these channels. In all, we want to be positive with nature and taking this opportunity forward. So I will be explaining further these 3 plans. First one, the climate change plan. I want to talk about what we have already achieved. In 2010, we set up an objective for 2020, 150 CO2 grams per kilowatt hour. After 10 years, we achieved less than 100. So we have a track record of delivery. And we have delivered that, taking actions in many ways. Margin portfolio, improving our renewables, using technology and so forth. So we have been able to decrease our global CO2 footprint while really growing our business. And this is what we want to do in the next years. So we have set up, and it's been said today that we want to have, before 2040, being net zero for all scopes, including 3. And this target has been certified by science-based target initiative, the roadmap to achieve that. Meanwhile, we want to be neutral in emissions for Scope 1 and we have the aspiration of becoming neutral in Scope 1 and 2. And we were doing that with our green procurement. We need to get involved our supply chain. We are going -- as it has been said today, we are going to deploy massively renewables in this period of time, 100% renewables all -- in 2030, 100% intelligent networks that will allow this transformation to happen and for sure, delivering to our customers green energy for all the energy needs that they have. All of this is going to be done in alliance with companies, associations, NGOs with technology and decarbonization. And as I said, very important, this target has been verified by science-based targets. The second plan is about biodiversity. We want to become also leaders on the fight against the loss of biodiversity. And we have 2 clear objectives ahead. The medium -- short -- medium-term objective is 2025, no net deforestation. And the 2030 objectives is that. Thanks to Iberdrola, there will be more biodiversity in the world than less. And how are we going to achieve that? We're going first to measure, because it's very difficult to measure how do you affect or impact biodiversity and how your actions will improve biodiversity. So we are already creating a framework, and we are very confident that we will be able to really measure what is our impact in biodiversity, then act ensuring the application of Conservation Hierarchy from 2025 with all new developments having neutral positive biodiversity impact and deployment nature-based solutions, 3 programs, biodiversity projects and alliances with NGOs to help us to achieve this goal. And last, transform and lead, the things that we are doing globally in alliance with our partners and with NGOs to really create the acknowledge and the concern about this big problem that we want to address. Third challenge, third plan is the circular economy plan. So we are not a company that really produce equipment and products. But we have a supply chain that produce equipment and products for us. So we want to engage our supply chain to deliver these green products and green supplies to our projects. So we have some examples of commitment in steel that we have already done, like the First Movers Coalition or the SteelZero from The Climate Group and we will improve that along the years to achieve the goal. We are also going to reuse or recycle our blades and our PV models because we believe, we strongly believe that this energy transition cannot happen if we don't recycle and reuse all the products that we are using for them. And then -- what's happening? Okay. I don’t think so. No. Okay. So -- I thought it was my cellphone, it’s not. And now also with the customers. Our customers need to reduce their global footprint, and we will help them through the use of more energy efficiency through electrification, transportation, heat or green hydrogen. So 3 challenges, 3 plans and 3 clear goals to achieve those plans. And now how are we going to focus this opportunity, thanks to innovation? How are we going to deliver on this while creating value? This is the energy mix in the world today. Only 20% is being served with electricity. The rest is fossil fuels. According to International Energy Agency, there will be exponential growth for electricity in the coming years. And we expect that around 2050, near 60% of electricity will be used in the world. In the past, our company, a company like us had a small set of assets and products. This is the look-like of our company or a company like us in 2020. If we come to 2022, the range of products and assets that we have has increased enormously. We have seen that in the last 10 years, renewables became competitive. And in this decade, there will be massive deployed. And now we are seeing the same trend in the demand side technologies. Demand side technologies are somehow lagging, like, 10 years compared to renewables, but they are in the same trend. They're following the same trend. So we expect, in this decade, to have technological development of these demand-side technologies, while in 2030, become a massive deployment of them. So the picture for these new products and services for a company like us in 2030 could look like this. So this 20% of electricity that we are saving today to the whole energy system, maybe it will be much higher, up to 60%, but more diverse with more opportunities and markets for companies like us in the future. So we have the opportunity through the conversation to address these markets. How do we do that in the company? We assess what are those opportunities with technology and markets analyses, with our own models, with our business expertise, with the collaboration with our suppliers that provide us with the latest R&D programs, with university and research centers. And then we figured out what things could be done in the short, medium and long term. And if needed, we do demonstration projects as we have done in Puertollano project in the hydrogen plant. And if needed, we build and create new business units to address the challenge. So it's a well-established process. That keeps us really informed and at the edge of what can be done both in the technology side, but also in the business side. If we go to renewables, we have been talking about renewables and the opportunity that they will bring to us in the future. In the left-hand side, we can see that technology development rule is not over, but the opposite. We have more technology to be developed in the coming decade that will bring down the cost of the technology despite inflection or the peak in prices of raw materials that could happen and will increase the efficiency of the load factors of the different technologies. With this, we can be confident that post 2030 existing renewable technology, and they want to come, will become even cheaper and capacity additions will explode. So the International Energy Agency and our own model shows that photovoltaics will more than triple; onshore wind, more than double; offshore wind, more than 6x; and all in all, 50% of the world energy consumption, of world electricity consumption will come from renewables in 8 years' time. This is worldwide, and it's quite impressive. But in some geographies like Spain, this figure will be close to 75%. So there is no doubt that electricity will become -- will come from renewables in the coming years. This is no doubt about that. Besides, we have learned that renewables can be converted into electricity very easily. And this will be the key for electricity to be converted into the other fronts of energy in the coming future. We have been talking about networks. So it's true that this energy transition will need huge amount of investment in networks, right? The point it is that according to a study made by the University of [ Comilla ], the impact in the bills of the consumers, because of these huge investments, will be, in terms of the energy they pay, around EUR 1 to EUR 3 per megawatt hour, very limited and much less than the competitive advantage that the renewable technology has compared to the fossil fuels. So this means that there's a big opportunity for companies like us to address the huge investments in networks, while the impact in the electricity consumption, because of the build, will be very limited. And the technology that we will imply on this will be smart grids, high-voltage direct current, high grounded grounding and flexibility, resilience adaptation to climate change and so forth. So there's huge amount of technology to be implemented in this new infrastructure that is needed. And as I said, it will have a limited impact in the customers. And last, I would like to talk -- we have been talking about generation network, but one of the things that we have not done in the past as companies, it is to really address the demand and really to encourage the demand to use our energy product. And now I think we have the opportunity to really increase our market share on the different energy product that our customers consume -- that the world consumes. And some of them, like industry has been, like, far from our reach until today. If we take a look to this market, it's 40% of the final energy demand and 28% of the global emission. And some people say it's very difficult to -- these are hard-to-reach sectors, and it's not true. Some of them are hard-to-reach sectors, but some of them are easy-to-reach sectors like paper and pulp, like food, like steel. Those uses -- those industries uses low temperature heat. And now we are decarbonizing them using heat pumps and other processes. So there is a low-hanging fruit that we can address right now. But it's true that there are some hard to reach sectors. And for them, we think that we can use hydrogen. We have been talking about hydrogen today in the presentation. So first may refer to hydrogen as a material, a raw material that is being used today in the industry, 90 million tons, right? So current users of hydrogen, like ammonia, like methanol or refinery will bring us a lot of opportunities if we decarbonize them. So let's use hydrogen first to decarbonize the gray hydrogen. For every kilogram of hydrogen, we are producing 10 kilograms of CO2. Let's remove that, and this is a huge opportunity for the short to medium term. But then we have the long term. And the long term could be using this molecule combined with some others to -- for the margin transportation, for the energy transportation or for high-temperature industries, and we will see them later on. But what I don't think we'll be using hydrogen, it is for those uses which can be easily electrified. And I'm showing here 2 of them. First is passenger vehicles. If we go through the electricity route, the efficiency from the kilowatt hour that we produce in the PV panel or an offshore or wind farm, it's 70% that is converted into actual kilometers run by an electric vehicle. If we use the hydrogen route, we have to produce the hydrogen. We have to compress it. We have to use it in a fuel cell. Then it goes only to 25%. So looking at the physics, I strongly believe that light-duty vehicles will be electric because of that. For domestic heating, even -- the story is even clearer. If we use a heat pump, thanks to the heat that they can extract from the outside, we can get efficiencies of 360%. While if we go through the hydrogen route and using hydrogen in our boilers, then we are having only 48%. So it is, like, more than 7x less if we use hydrogen. So I'm really confident that has not going to be used for those uses that can be easily electrified. But it's true that there will be some uses that can be -- benefit from the hydrogen technology. Still it is an industry that consumes huge amounts of energy and it's needed for this energy transition and for the world. We have seen that there are many technological routes that can decarbonize still. First is direct reduction of iron using hydrogen. But we have seen also companies that uses direct electrolysis, like the one we are using with alumina. And we are seeing even companies that are proposing some other innovations like low temperature iron reduction through the cellulite of iron. So the world is focused on decarbonization and many technologies in many places are progressing forward to reduce their carbon footprint. And for sure, the increase in recycling rate, that also consumes a lot of electricity. With all this, we can expect that in a year's time, like 300 -- more than 300 watts per year, it will be used for steel -- but from that time, the exponential growth will give us like 2.4 -- 2,400 gigawatts per year. So it's a huge opportunity for us, and we are setting the foundation for this. For the ammonia same story, we have the technology. We have presented that already to produce ammonia with hydrogen. And there's also the new uses for hydrogen and ammonia in the -- as an energy carrier -- liquid energy carrier. So as you see the graph, in 2030, we will still having a small amount of green ammonia for fertilizers as one, but probably the growth will be exponential if the shipping industry adopt ammonia as the fuel for the industry. And what are we doing? We are setting the foundations. We are starting getting our hands on these technologies. So we learn and create a pipeline and a technology awareness in our company to address. We have our first -- the biggest as it's been said, hydrogen -- green hydrogen plant in Spain. We have our project for green methanol that we hope to have in place 2 years' time, and we are exploring opportunities on green ammonia and green steel already. Second sector, transportation, we have been covering industry transportation. Transportation is a sector that only 1% users electricity. The rest is fossil fuels. So the point it is that the bar innovations will decrease the cost of batteries enormously. I know that today, the cost of battery increased slightly in the last year, but the technology trend is telling us that there is a threshold of $100 per kilowatt hour battery that will be reached around 2025, 2026, -- that will give us a total cost operation of electric vehicle cheaper than internal combustion engine. At that moment, the adoption of electric vehicle will increase dramatically. And we expect in Europe that before 2030, it will be cheaper to buy an electric vehicle than to buy an internal combustion engine. After that, this exponential growth for electric vehicle will be a must. So we can expect to have in 2030 like 170 million -- 70 million or 200 million electric vehicles and from that exponential growth of sector. The change in what we are following, we are installing today 350-kilowatt charger at charge your electric vehicle of 400 kilometers day of autonomy in the time of a coffee, and the rent is also -- and the model is expanding very much. So we have one center in these times and is that the electric vehicle will be the preferred mean of transportation in the coming years. I think it's already happening. This is Norway. Norway, electric vehicles are cheaper than telecom busting engines, thanks to the subsidies and grants. And you can see that close to 80% the sales year-to-date were electric vehicles. People buy them because they are cheaper to use. Oslo will become the first capital city in 2023 to have all electric public transportation. Iberdrola is already serving more than 300 buses in Spain, electricity for the movement. And we have already set up a business unit to address all this opportunity, both residential business and for sure, with public charging. And lastly, residential, the third sector, residential. Residential is a sector that I strongly believe that will change dramatically also with years. Thanks to the technology of the heat pumps. You have been heard about heat pumps many years, but now the technology is really expanding with better refigures economies of scale, thermal storage to make a better use of the space in the in the buildings and efficiency from 300 to 500. The other day, I was in a meeting with Daikin, one of the heat pump suppliers in the world. They say that they were going to span the capacity in Europe 3x. And the bad news is that this is not enough for the capacity that's going to be needed in Europe to change all our system. And the point is that they are so efficient that with small increases in energy consumption will increase dramatically the use of fossil fuels to hit our homes. And this is already happening. You may say no, but it's not possible in places in Europe is where it's too cold. In Sweden, half of the residential heat has been provided by electricity. And district heating is also taking -- being served by electricity also on biomass. So if it can be done in student, it can be done in the U.K., it can be done in the northeast of U.S. and the other coal places, and for sure, in places with mother clients. And we have created also the Smart Klima unit, and we are also creating business for district it. So we have been covering the 3 sectors and how opportunities through technology will come to our company. But we also have, as I said, 3 plan. The climate change plan the visit plan and the sequel economic plan. In the biodiversity plan, we want to address the challenge of having been positive in nature, also with a business perspective. If we look at the market of voluntary credits. We see that this market is going to grow from EUR 1 billion to EUR 10 billion to EUR 50 billion, depending on the source. So it's becoming also a business to create current credits to serve the demand that is expected in the coming years. And do that with nature-based solutions that will help to address the visit crisis, right? And we have reforestation conservation technologies and blue carbon technology and land buyer shares and other technologies. What we are going to do -- it is -- we are going to try to create a business, we have call it, current in nature with ever expanding targets that we have not presented today, but hopefully, in the future to capture 61 million tons of CO2, 130 million trees planted and 100,000 XR-refresed. I'm doing it with a business perspective and trying to create a business out of that as others are doing. And the last, the recycling business -- we need to recycle. And as I said, we have set up our goal to recycle 100% of our blades and 100% of our modules. And we are going to do also with the business, there is a trend in which the volume of wind turbine blends will reach the end of their useful life will increase rapidly. And we need to bring an answer from the business. So we have created a company called Energy loop that is creating the technology and the assets that we'll be able to address this challenge and to recycle the blades that we will be disposed in Spain. So we have previous experience, as I said before, as many other technologies with some R&D projects, and now we are in the position of setting up this kind of business. As a summary, addressing the trickle environmental challenges crucial and at the same time, a very big opportunity for value creation. This massive opportunities ahead to the carbonized economy are based on new technology development, but also -- and this is very important on technology that exists today, so we can capture this low-hanging fruit. And Iberdrola early positioned to create value in the transition to this sustainable economy. Thank you very much.

Well, good afternoon, everybody, and thank you for being here this afternoon. Well, as the Chairman comment this morning, our ESG factors are fully integrating our strategy operations. With -- regarding the S, he mentioned several things. He mentioned the job and economic activities, the demerge exclusion, training and communities. I'm going to talk about this about our people. The people start going to make possible the execution of this plan. Let me start by sharing some very general ideas. Okay? The first is that in an environment that is much more competitive than it used to be just a couple of years ago, we are managing the life cycle of our professional base on 3 fundamental principles. The first is that the employment we generate must be sustainable and fair. The second is that it has to be based on equal opportunities. And at the end, our challenge is that our employees finding Iberdrola a place to develop their skills and also their professional aspirations in a health environment and aligned with a life model. This is that are going to be dedicated in the next few minutes to explain each of them. Remember, just to remind you, the 3 things: employment, equal opportunities and the challenge to incorporate the right people in our organization. Okay. Regarding employment, that is the first point, Iberdrola is an important driver of just creation. We maintain a hiring rate of between 4,000 and 5,000 employees per year since 2015 with high value-added jobs. Nearly 100% of this employment is permanent. And at the same time, also indirectly, we are creating employment in the communities in which we operate, thanks to the large number of suppliers and of goods and services that work with our company. But also the employment we offer is of high quality with competitive remuneration where the minimum entry wage is with our exceptions always higher than the minimum wage in all countries in which we operate. With social benefits and welfare programs like, for example, the pension plans or the medical insurance. And with many flexible programs, some of them we launched in 2010. So this is not new for us. that allow us to reconcile professional and family life. The second point is that this employment is -- this fair and quality employment is complemented by equal opportunities without distinction of any kind. Iberdrola's main Human Resources policy is the diversity, equality and inclusion policy, which is part of the company's culture and on which the training and assessment of our leaders and the development of internal talent is focused. We are a diversified company in the broad sense of the world. with employees of 79 nationalities and 4 generations working together on a daily basis, and we pay special attention to 3 main things. The first is gender diversity with a 20% increase of women in strategic positions and 47% in position of responsibility in the last 5 years. But our goal is that 30% of the management positions and 35% of the procedures responsibility at Iberdrola will be held by women by 2025, reaching 35% and 36%, respectively, by 2030, as you can see in the screen. The second is equality, understood as equal pay and equal opportunities. We want to go much further than the legal requirements. And by 2025, our goal is that 100% of Iberdrola employees will be under an equal salary and gender neutral certification. And the third point is inclusion with numerous initiatives on different fronts, such as the promotion of equality and inclusion through sports, the participation of our employees in volunteering practices and inclusive practice for employees and supplies with a sharp increase in the hiring of people with disabilities. And that is reflected in some of the numbers and the figures that you can see in the slides. In this chapter of inclusion, let me highlight the school of electricians for women in Brazil. which has been recognized by the United Nations as a model of women's empowerment. And finally, the third point is a place to work. I mean we need to generate a place to work. With this human capital management model of sustainability, quality, fairness and guaranty of equal opportunities and inclusion that they have just shared with you. We have to face the important challenge for our sector like generational changes or increasing competition for talent. The only way to go with this is to attract the best talent obviously, to retain needs. And to do this, we have to ensure that our employees find Iberdrola a suitable place to develop their skills and professional aspirations. This is exactly what we are dedicating all of our efforts to. The first point of this process is to generate employability that is for Iberdrola to be considered the first or at least one of the first options among the most talented professionals. To this, we are present in -- we are pressing all the states prior to the professional life of young professionals. Through the youth plan that I mentioned here in the slides, we have access to more than 9,000 students in schools, more than 900 young people participate annually in inter ship programs, which allow us to meet and follow the best professionals. We have activities with more than 15,000 students per year in university training and agreements with some of the best universities in the world. Some of them, you can see here an MIT, [indiscernible] Imperial College of London or [indiscernible] , for example. We have an international grad rate program in place through which we hire between 150 to 200 people university students per year, with plans and specific trainings and who will work for the first year, a few years in different companies of the group in an international level. Finally, we have awarded a total of 1,000 scholarships in recent years, to receive post university training in different fields, and most of these professionals will eventually join Iberdrola. Once we attract them, this highest potential professional. We focus our efforts in retaining them. We have 3 main drivers for this. The first is training, obviously, we will dedicate more than 50 hours of training per employee per year with innovative methodologies and a framework aligned with current and future business needs. This places us among the companies with the highest level of training in Europe being almost 5x above the average. The second is talent management. One of the fundamental tasks of the management team is to identify the group of the greatest talent and potential in order to accelerate the developing their development and ensure successions at all relevant positions of the company. And the third is rotation and international mobility. Our geographical expansion requires a global platform of capabilities and resources. Just in 2021, we implemented more than 300 international movements among our employees as a tool to generate international careers. And these measures around the 3 points of our model have allowed us to have a company of qualified, trained and committed professionals that declare in an international survey, we launched every year. Among other things, they declare that they trust the company and its strategy. They feel part of this strategy, and they have the necessary resources to develop their work. This is a very relevant survey because as you can see here in this slide, 80% of our employees participate every year in the survey. These ratios are well above those of our European -- other European utilities and levels more similar to those of technology and high-performance company. And for 90% of our Iberdrola's employees, safety has to be a priority. And as my last point, let me comment about safety. This is also a priority for Iberdrola, having a safety policy with the strategic plans, objectives, in cooperation with suppliers, customers and administrations. Safety has been one of the top 3 priority issues in the group's materiality study for years, and we have set ourselves several objectives for the coming years, affecting both our own personnel and that of our suppliers. The most important of this objective is the TIRR. The TIRR is an accident rate that measures accidents versus number of working hours of our person. We want to reduce this rate as we commented this morning by 10% in 2025 compared to 2021 and by 21% by 2030 also compared to 2021. At the end of the day, as a summary, our ambition is to become [indiscernible] as the best company in occupational health and safety in the sector. Before finalizing my presentation, let me share with you a couple of real cases and result of this human resources policy. The first refers to Brazil. where we have incorporated almost 4,000 employees in the last 3 years in geographical areas where we generate quality employment and with a clear focus on training and expertise. And in an exclusive way that has deserved the recognition I mentioned before, the United Nations as a model of women's empowerment. The second refers to offshore. Offshore for sure, is one of the most competitive areas in our industry. Offshore is where we have the most diversified team with 30 different nationalities in a group of slightly more than just 800 employers. Even in this difficult environment, we are able to maintain the attrition in very reasonable levels of around 6%. And we have been able to attract more than 700 new employees in the last 12 months that we need for our growth. Okay. And now a summary. A summary of how we're addressing. Let me finalize with a summary of how we're addressing the new industry challenges with the framework of our human resources policy I have been sharing with you. We are in a sector that will require a significant generational change in the coming years, to which we are responding with organized and the telecast plan in which managers are fully involved. It is a sector in which although is not very high, turnover has increased significantly -- very significantly in the last couple of years. We are responding to this as strengthening our attractiveness and our recruitment capacity with an attractive value offer in terms of salary and careers. In an environment of electrification of the economy and digital transformation, the skills also evolving rapidly to which we are responding by intensified training reskilling and cooperating with leading universities in our field. And finally, the international expansion of the group requires enhancing internal talent and international mobility of all our employees. Thank you very much for your attention.

Good afternoon, everyone. In my presentation today, I'm going to describe the main aspects and elements of both the Iberdrola's Governance and Sustainability system and the compliance system, which is fully integrated in the former. We'll start with Iberdrola's governance model that we could define as how the companies of the group are structured and how the governing and decision-making processes are designed and defined within the group. So first of all, in this first slide, I would like to highlight some of the most relevant milestones. In the history of Iberdrola's governance and sustainability model, some of them have been already referred to in previous presentations. But just summarizing the first milestone -- relevant milestone in 2002 -- the Board of Directors of Iberdrola approved the first code of conduct that is now called Code of Ethics. In 2004, it issued the first sustainability report. In 2017, First, corporate policies were approved by the Board, some of them from the very beginning, focus on ESG matters as quality climate and sustainability. In 2009, the decentralization of the governance model was implemented, and we will go back to this matter in the next slide. In 2010, Iberdrola became the first Ives5-company, having a sustainable development committee, in 2016 and strict recognition of the [ SDGs ] was made in the governance system of the group. In 2017, the contract social dividend already mentioned was included in the bylaws. In 2019, the concept of corporate operate was integrated in the governance model. And in 2020, the governance and sustainability model was reformulated around the ESG principles. As you can see, Iberdrola governance and model has evolved and improved along the years to fit strategic requirements and context, transparency requirements and applicable loan and is at the forefront of the best international practices. This governance model has received a lot of awards and recognitions. You can see them in Exhibits 1 and 2 of this presentation. And all of them evidence that Iberdrola has a leadership position when talking about corporate governance. In this next slide, I will describe how Iberdrola's governance model looks like. This model is efficiently organized and coordinated seeking a balance between the centralized management and the expectation and taking advantage of synergies, of course. In this model, management and decision-making power are never centralized in a single management body but centralized and shared by the companies of the group as follows: on 1 side, Iberdrola, S.A. holding company is responsible for the overall strategy of the group, corporate policies, general guidelines, governance and supervision and is not involved in business operations. Below subholding companies located in the countries in which the group operates are responsible for supervising and coordinating the implementation of the strategy in each country. We have the specific case of the listed so holding companies in Brazil and the U.S., which operates under a strengthened autonomy regime. And below them, the head of business subsidiaries that are responsible for implementing the business strategy and run daily operations and effective management of those businesses. So upholding companies and head of business subsidiaries operating dependently with respect to the respective corporate autonomy. You can find also a chart with the structure of the group in Exhibit 3 of this presentation. Now we will go through the governing bodies of the companies of the group, and we will start by Iberdrola SA. As main features of the Iberdrola Board and many of them has been already mentioned, as I said before, but I would like to point out the following: there's a separation between Executive Chair and CEO roles. We have 71% of independent directors, a percentage that goes up to 79%, if we add to these strictly independent directors as per Spanish-listed companies regulation, as I say, if we add the other external so-called other external directors that are also nonexecutive directors, nonrelated directors to the company's or the management of the company. And independents are -- of course, the 2 by-chairman and the leading dependent directors are all of them independent. There is 43% of gender diversity. That's 6 out of the 14 members of the Board women. It is subject to continuous training and refreshing and has all the core skills represented, industry management, accounting, legal, financial expertise. The Board of the committees and the structure of the group. The corporate structure are externally evaluated by independent consultants. And only independent directors are present in the consultative committee, which conservative committees are remunerations, appointments, audits and risk and sustainable development, and all of them are chaired by independent members. All these advisory committees play a fundamental role going beyond legal requirements and ensure system of checks and balances with the Board that above the accumulation of powers. And now some details about the governing bodies of the top holding companies. All of them have both and an audit and compliance committee. These 2 functions, internal audit and compliance are independent divisions reporting and bound to the audit and conveyance city. We have the specific case of the 2 listed in Brazil and the U.S. with enjoy special framework for strengthen autonomy to protect minority shareholders. This listed [ Sapolings ] have a board with a high rate of independent directors over the national respective legal environment, have their own governance and sustainability system consistent with Iberdrola's 1 and have a special committee with no proprietary directors to consider and approve, if that's the case, any related party transaction with Iberdrola. And now let's move to Iberdrola's compliance system, which as I mentioned is fully integrated in its governance and sustainability system. Compliance is in Iberdrola independent function bound on reporting directly to one of the committees of the Board. In this case, the Sustainability Development Committee. And its main objectives are to promote that the company and its professionals act in accordance with applicable law and ethical principles and spread out the ethical culture throughout the organization and to prevent and mitigate the risk of regular behaviors of any kind. And when we talk about how we operate the Iberdrola's compliance system. We have to mention on one side, the compliance unit at Iberdrola SA level. The unit was incorporated by the Board of Directors and is a permanent internal body bound and reporting to the sustainable development committee of the Board. And it is independent from any other departments, function or manager of the company and has sole responsibility in compliance matters with its own staff on budget. You can see figures -- global figures below in the slide. On the other side, the compliance divisions in each subholding company and its Head of Business subsidiary. These converge divisions are bound and report to the audit and Competence Committee, if it exists in the relevant subsidiary, if not for the way to the Board of Directors. They are independent as the compliance unit have their own staff on budget and assume all responsibility in compliance matters. The relationships among them compliance unit are regulated in the coordination and information protocols. Now we will go through the compliance direct responsibility, which scope is defined by the Board of Directors. And we could classify these responsibilities in 4 categories. First, everything related to the goal of ethics and its content, which includes some examples conflict of interests, privacy, gifts, hospitalities, labor issues. The claim prevention programs that are implemented in each company and whose main purposes are to reinforce the commitment to fight against to corruption and any other crime and to set up the accurate controls to evidence that 1 sign measures to prevent crime risk have been adopted by the companies. Third, the market abuse regulations and requirements in the last acquisition separation of regulated and nonregulated activities rent. These are the direct responsibilities of the compliance function. And once these responsibilities tasks are defined, it is necessary to explain which are the elements of the compliance system, that is to say, what do we actually do in compliant daily. So in the following slide, we will talk about these elements and the first task that compliance has to face. And it is risk assessment and elaboration of the risk maps. Corporate and business managers are involved in this process, working together with compliance. There is a common methodology and risk categories the group. So the information reflected in the risk maps is consistent throughout the group. Compliance elaborate the risk map in each entity with the aim of identifying the areas of departments subject to each compliance risk. Here you have a breakdown of the most relevant categories of compliance risks, external examples, fraud and corruptions, international sanctions, competition, [ market have use ] is in the capital markets, labor matters, interrupted property, et cetera. Once we have the companies with map, second task is to manage that identify risks those it identify risks and approve the resin general regulation to mitigate and prevent them. You can see in the slide, the main compliance regulations separated in 2 levels, those approved by the Board of Directors, [indiscernible] ethics, policy or anticorruption and fraud policy among others. And the regulations approved either by the compliance units, of Iberdrola's SA level or by the relevant compliance division in the rest of the companies. Essentially, these regulations are related to third-party risks, sponsorship, donations, corporate transactions, the investments, competition and gifts and hospitalities as the most relevant ones. All these internal regulations establish the accurate processes, tools and controls with the aim of mitigating and preventing any and all compliance risks. What leads us to the question, which are these processes? And what does our activity in competence consist on actually. At this respect, we distribute here 2 different levels. First of all, the third-party risk assessment. Compliance evaluate and assess fraud corruption and any other companion risk of all suppliers and debtors. You can see in the slides some data about the third-party daily monitor in compliant databases and the specific due diligence work, compliant has carried out in this 2021. Convenience also assess the eventual compliance risks associated to investment and divestment projects, including corporate transactions. We also collaborate with the purchasing department to improve the sustainability and the compliance systems of Iberdrola's main suppliers. And finally, we have implemented strengthened and much more strict controls in the case of relationships with what we call restricted companies -- sorry, [ specific ] countries. And other countries we consider with a higher than normal risk level from a convince perspective. And secondly, compliance also manage risks related to professionals of the group, the companies of the group. We carry out background checks of the management team, we analyze eventual comfort with interest. In fact, the management team of Iberdrola signs an anal declaration of this respect, and we supervise gifts and hospitalities. Now we move on to the next element of the conveyance system that is training and communication. These activities are essential pillars of the compliance system as both make professional aware of the internal regulations they are subject to and also guide them on how to behave on the principles they have to follow in their day-to-day work and professional activity. In this slide, you can see the most important metrics related to training initiatives. In all the companies of the group with regards to compliance. As an example, an average of almost 2 hours training compliance per employee and more than 72,000 hours of training in 2021. And finally, last but not least, element, element of the compliance system that is monitoring and review of the system. How do we monitor the system. For this property, we have implemented more than 16 years ago with growing channels. As of today, ethical mailboxes are available for professional suppliers and shareholders. Needless to say that the communications can be anonymous and that all information received to them is treated as strictly confidential. The companies of the group and the management have an express undertaken not to engage in any direct or indirect retaliation against whistle towers. You can see in these slides some metrics about the communications received by the companies of the group in 2021, including without -- within the concept of communications, both claims and consultations. And of course, besides the ethical mailboxes, the combined system of Iberdrola and the sub-holding companies are both internally by the internal audit division and externally by consultants and compliance experts audited every year. In addition to that, the compliant system of Iberdrola and the sub-holding companies have been granted the most relevant certifications, recognitions and awards as you can see, in Exhibit 4 of this presentation, we will go to it right now. The previous exhibit -- the structured chart and recognition of awards. And as an example, I want to underline that Iberdrola has been included in the world, most ethical company's list issued by FCC Institute during the last and is the only Spanish company in that list has also been awarded the comparison with the verification and has been the IBEX 35 highest-rated company in the index of corporate transparency and integrity, compliance and human rights issued by international transparency among other recognitions. All these certifications and prices in light to the fact that if a rules contain system is robust and effective and that Iberdrola is at the forefront of compliance highest international standards. To finalize my presentation, I just would like to point out that the conveyance system transparency report related to 2021 has been recently and for the first time, approved by the compliance unit of Iberdrola, S.A. You can find its uploaded in Iberdrola's website, and it contains further information and metrics about the compliance function of Iberdrola and the companies of its group and their activities. It's all of my part, and thank you very much for your attention.

Good afternoon, everyone. So we have now left this carry part for the last presentation. We're talking about cybersecurity. And why are we talking about cybersecurity is one of the key topics in ESG is because if we really want to face the challenges of the energy transition, as we have seen across the presentations today, we need more technology. We need to be more digital -- have smarter grades. And cybersecurity in this context could be a blocker if the society contemplates as risk that is not affordable. But the good news is that we can do it right. So we really have a responsibility of addressing cybersecurity in this new innovation, now that we are setting the foundations for the future energy model in this net 0 goals. So my presentation today will be about how we Iberdrola are addressing this challenge to ensure that we are doing things right with right cybersecurity approach within this accelerated digitization and innovation that we need. Of course, our goal is to ensure that in these increasingly complex technological ecosystem and threat landscape, we keep protecting our critical infrastructures. Our business and customer data and of course, the provision of an essential service to society as well as the group's reputation. We are seeing every day in the press how cyber attacks are compromising all kinds of sectors -- all kinds of companies, large and small, public and private, and increasingly, with ransomware or wiper type attacks that they're showing how cybersecurity is more than just about protecting data and information, the continuity of our business operations could be a stake. And to our own evolving technological environment and attack surface, we have to add the growing number of cyber-attacks that are being conducted through our supply chain, understanding all the interdependencies with third parties and the broader ecosystem is a growing challenge. In this sense, having sound cybersecurity standards supported by sound regulations, and ideally, certifications is a key lever. But unfortunately, these kinds of regulations are still largely under development and as a multinational company operating in several countries and regions with diverse and unfortunately, heterogeneous, regulations or regulatory approaches even makes it complicated for us to be able to deploy global standards, global rules, that for us are paramount to ensure protection of the group as a whole, taking into consideration the high interconnectivity of our networks and systems. So at Iberdrola, we are very conscious of all these challenges. All this important issues we have to address to support our businesses in achieving the goals. And already in 2015, our Board of Directors approved the cybersecurity risk policy, planting to promote a strong cybersecurity culture throughout the entire group, assigning clear roles of responsibilities to prevent, protect and respond to cyber-attacks or cybersecurity threats. So recognizing that 1 single organization cannot face this complex challenge alone, Iberdrola has established a global cybersecurity strategy based on embedding cybersecurity into all business decision-making processes and in daily operations. And let me give you an example. I know Armando was, this morning, commenting the storms and how our teams showing could ensure resilience even in these situations. And over the past 100 years, our engineers, our business experts have been perfectioning this business continuity and resilience mechanism in face of physical attacks, of natural events. So now that the new digital technologies are bringing in new cybersecurity threats, do we really want to have separate teams, IT experts, cyber experts, defining resilience mechanism, defining business continuity from scratch? It is our same business experts, the ones that have been 100 years [ Desano ] Brazilians, who have now to consider this new digital threat, this new cyber risk scenario within their existing plants to continue ensuring the protection of our most critical assets and goals. Therefore, our strategy is formed by 6 pillars being the 1 governance that I will address now across my presentation. From a governance perspective, Iberdrola adopts the 3 lines of defense model to assign clear roles and responsibilities for cyber risk management, ensuring a coordinated approach, as well as an appropriate segregation of duties. And as we commented, the first line of defense, which are the risk owners, our businesses, our corporate pensions, the ones that are doing innovation that our operation technology are the ones that are responsible for understanding the risk and implemented the right cybersecurity controls in their operations. In the second line of defense, corporate cybersecurity as an independent organization establishes routes to government models, assigns responsibilities and provides the necessary coordination and oversight mechanism to facilitate an adequate understanding and treatment of the cybersecurity risk across the group. Our role is also to act as a single point of contact to exchange threat intelligence and to coordinate key vulnerabilities, threats and incidents group-wide. A global cybersecurity committee, where all these professionals are represented from the businesses, from corporate security, but also other relevant functions like legal, our data protection officer ensures full coordination group-wide. The third line of defense, always internal audit, assesses the effectiveness of our control model and also conduct independent reviews based on risk. Of course, we're also subject to different external audits and have to demonstrate compliance with external regulations. In addition to this, and I will comment it further, we also have our own extended assurance system. The CISO, in my case, the global -- it's me. I will report periodically to the audit and risk supervision committee of the Board of Directors, and we have the same model in each of the sub-holdings. To deploy this model, business information security officers or BISOs, have been nominated within each business and corporate area. They are responsible for ensuring that within their business, the risks are properly understood, that there is a plan and that the plan is properly funded and prioritized based on risk. 2- to 3-year cybersecurity master plans are defined in each business to continuously enhance our cybersecurity capabilities, which are reviewed annually or upon any major incident or risk to adapt to the ever evolving risk and threat landscape. The BISOs report periodically to their senior management committees about any relevant cybersecurity risk and the progress and effectiveness of their plans. Of course, to get the right support, the right leadership support and resources to do this, to execute this plan. In addition to this, a global cybersecurity office provides technical guidance, overall monitoring of this plant, and of course, also ensures coordination and looks for efficiencies. Over the past 3 years, we have duplicated the overall cybersecurity budget and FTE dedicated to cyber. And this is just what we are able to quantify. And more and more, we are not able to clearly separate the cost for cybersecurity as it starts to be more and more embedded into operations. And it's like it was before with the cars. Before the cars had any security, we put -- quantify how much will it cost to implement an airbag or a seatbelt. Nowadays, security is just part of the price of the car. And more and more, we need to get, as a society, to these situations. What we can clearly separate is investment in specific cybersecurity detection and response capabilities, as well as an improvement of our overall incident coordination mechanism and global threat intelligence era. We have a global CISO, the global incident response team that is part of the forum of incident response and security teams, the first international, the first -- which we are currently evolving into a new cyber fusion center that will integrate monitoring and response, both in the IT and industrial environments globally. We also are investing or continue investing largely in acquiring the right cybersecurity knowledge and skills across our entire workforce and have multiplied by 5, the annual hours of cybersecurity training across the group to minimize our human attack surface and this is not including all the awareness efforts we do as training. Because it is essential to promote a strong cybersecurity culture across the group and to ensure that all employees at all levels of the organization have the adequate training and knowledge to minimize exposure to cyber risk, but also a proper understanding of the risk they're facing of the internal rules and of the tools that are available for them to allow for proper protection. Our cybersecurity training covers all the workforce from the Board of Directors, the senior manager, down to the last employee and includes annual training initiatives, monthly simulated phishing campaigns, ad hoc training for technical groups and also ad hoc training for those collective with a specific risk. And we also conduct reinforced assurance beyond our compliance obligations, because we know that despite all our efforts in implementing security by design, there will always be weaknesses that can be exploited to attack our company. Therefore, in order to anticipate our attackers, we have implemented a comprehensive assurance program to continuously challenge our cybersecurity control and detect and remediate weaknesses in our defenses before they attack us, too. These assurance initiatives are not just questionnaire-based assessments of the maturity of our capabilities. Proactive threat and vulnerability detection programs are also in place, including scheduled and regular vulnerability scanning activities, ad hoc security reviews, like pen testing, coat scanning, red team exercises, critical system audits, et cetera, allowing potential risk to be anticipated. This assurance program, as I said, complements all the external compliance obligations that the group has in the various countries in which it operates and also the correspondent external audits and verifications. And finally, our last but not least, pillar is collaboration. And collaboration is a strategic pillar because, as we commented, inside our company, internal collaboration between the business leaders, IT, cybersecurity is paramount, between the group and all these sub-holdings, but also external collaboration. We have intensive collaborations in all countries where we operate with law enforcement, government agencies and regulators, but also with our product and service providers, other companies and industry experts with whom we are exchanging valuable threat information, best practices and also starting ways for mutual aid in case of major incidents. Because we need to continuously reinforce and improve, not only our own cybersecurity capabilities, but also we have to contribute to enhancing the cyber resilience of the ecosystem as a whole. Because only by joining efforts we will be able to face the cybersecurity challenges introduced by the increasing digitization and hyper connectivity that is required to enable the digital transformation that will lead us to the path to net zero. Thank you very much.

Thank you. Thanks for the presentations. Now we go through the Q&A. If there's any question in the room. Thank you. Can you please introduce yourself. Please go ahead. You have a microphone, yes.

It's Mark Freshney from Credit Suisse. Just on the topic of cybersecurity, I mean, I'm guessing that you must have hundreds of different IT systems across Neoenergia, Avangrid. You've then got separate IT systems, which run some of the grids. I mean, presumably, there have been cyber-breaches of those. And can you talk through how they were dealt with, to the extent that you can, I guess, that some will be nonpublic or -- and can you also talk about classification? Because as I understand it, within companies, even the Board of Directors often don't have the classification to know about some of the items, for example, relating to smart meters, for instance. Can you just talk about some of the stuff surrounding that?

Yes. Okay. So we have and we will have security breaches. The important thing for us is the ability, first of all, to detect them quickly. And secondly, to prevent them to have any impact on operations. So what I can confirm is that so far, we have had no incident that has had any impact on our industrial operations in any -- none of the countries where we are present.

My name is Chris Moore for Carbon Tracker. If I can focus on the E of the ESG for this afternoon. I think you mentioned a couple of times your intention to get Scope 1 and 2 emissions to 0 by 2030 and Scope 3 by 2040. Can I just get some detail perhaps behind those headlines? I have 3 questions? One was, presumably you're talking about carbon intensity, so grams per kilowatt -- grams of CO2 per kilowatt hour rather than absolute 0 emissions by those dates for Scope 1 and 2? The second question was sort of relating to Mark's question. You're in different geographies, different regulations, different governments, different conditions, different business mixes. Could you maybe talk about how those targets map on to your different geographies in Brazil, U.S., U.K., Spain? Because presumably, what works in some of those geographies won't work in others and some will be ahead and some will be behind. So maybe give us a bit of flavor behind the group headlines. And the last question was, you haven't talked about it, but I just wonder whether there are any incentives for remuneration for senior management in terms of getting your carbon emissions down quicker.

Yes, I think that question is for Agustin. But first on the last of your 3 questions, yes, we do. On the long-term incentive plan, the CO2-specific emissions intensity is one of the KPS. This long-term incentive plan is going to finalize at the end of this year. Presumably, the next one, we will include somehow. It has been there for 6 years, the minimum we've seen on the views of the plan.

Yes. Yes, sir. Regarding your first question. Well, our main goal is to be net zero by 2040 in all 3 scopes. And we have this midterm, obviously for those emissions that are more in our control at our mission Scope 1 and Scope 2 to go to be neutral in 2030. So it is true that -- and this operative has been certified by science-based targets initially right? So it is true that we are -- we have a strong track record in carbon intensity, as you have mentioned, and we intend to keep that. But we are also very committed to lower our absolute emissions as much as possible. And we have a handful solutions for that. In some geographies, we have demonstrated that we are able to do that. In U.K., we have no positive fuel generation. In Brazil, we have very few, the same in the U.S. So we have some geographies where we have proved that it is possible. Some others like Spain, we are -- we have CCETs work impact our goal. It is that, for sure, we have to deliver quality of supply. So if they are needed in 2030, they will be operating not many hours, and we will be able to neutralize or compensate those emissions. So we are confident that we have a handful of tools to achieve that. And besides, we also have to recognize that for 2030, there is still 8 years, and probably, we will find, in our way, more tools to achieve our goals. I think that it's very important that our target is set from bottom to top because we have performed, and we have done it in the past. And from top to down, so the strategy of the company that has been presented today is fully aligned with this objective. And we are in a so better position than our peers because our emissions are, today, much lower. It has been steady today, but we are fully confident that we will achieve the goal.

And I think that also, as Agustin said this morning, we have a track record of anticipating target fulfillment. So very positive on that. Next one, over there. Yes. Please.

James Brand from Deutsche Bank. Two questions. The first thing is for Agustin. You talked about very high levels of renewable penetration in some markets. I was wondering whether you had a view on what the kind of max level of renewable and battery storage was that could be reached. Maybe it varies a bit based on different markets. So how much flexible generation you need to have? Back -- we've done some work on that at Deutsche Bank, but I'd be interested in your views. And then on cyber, second question for Rosa, you mentioned that as you digitize more, the cybersecurity risks rise. Is that something that you actually do a risk assessment of when you think about digitizing or automating a new process that you actually think about that -- what are the cyber risks involved in this? And I'm sure you think about the risk, but do you think what are the cyber-risks and should we actually be doing it? Or the answer is always digitize more and more and more?

Okay. Thank you for the question. Well, first thing, it is true that as long as penetration of renewable increases in a specific geography, you need to put in place different tools to ensure the capacity of the system in the base load. So first thing, it is to have a balanced mix. We have made a study, and 70% of the wind energy in Spain is being produced when there is no PV. So wind and solar really mix very well and they are complementary. If you complement that with hydro, you get to a nice combination of technologies that will provide you most of the hours of the day with clean energy. If you combine that with storage, as you mentioned, and I'll be talking about that. And with some technologies that can provide peak time with appropriate tools for the remuneration, I think you have the opportunity to achieve and to reach, like in Spain, 75% of your electricity mix with renewables without any problem. So the 2030 energy plan for Spain, I think, is going to be met with this and we also with storage. You were asking about the storage. So I really think that in the coming years, we will be seeing more and more batteries linked mostly to solar systems. Why? Because then, for our batteries, you can supply the night peak in many [ years ]. This is what is called the solar adder. And the additional cost for the customer to have this solar adder, it is capacity in place. It's around EUR 4, EUR 5 per megawatt hour. So again, it is the same case as in the networks. The competitiveness of the renewables can pay for that very easily and provide the security of supply. So we will be seeing more storage. We have some storage already in place in some of our renewable plans, and we'll be doing more and more. But I would say, first is the nice mix of technologies, wind and solar and hydro that will give you the most of the answer at no cost.

Yes, we have a question there. This side.

Okay. So for your cybersecurity question, yes, we do. The question is who does, and this is different approach in different companies. If you have the CECL making the decision and saying, no, why are you even doing smart grids? This is too dangerous. Let's go back to manual operations. You're basically closing the business. So cyber is not the only risk. And the one that has the relevant view and the relevant risk balance is the responsible of the business. So that's why our strategy is about having this responsible understanding and evaluating cybersecurity risk with all other risks to make these risk-based decisions and investments. And I'm sure there will no responsible that understanding the risk say, yes, just go ahead with energy digitization, no cybersecurity, no problem. Just take care of those that does not know it, because I don't care. It's not my business. No? So that's why this is our strategy. And this risk assessment needs to be done, of course, within the broader project assessment as one of the pieces. An important one for me.

Elchin Mammadov, MSCI. I have 3 quick questions, please. The first one is on supply chain. I mean, more than half of Iberdrola's plant capacity additions for renewables for the next 3 years is going to come from solar. And as you're aware, EU announced proposals to ban products made with forced labor. There was a pile up of solar panels in the U.S. when Uyghur Forced Labor Prevention Act came into force in August. What is Iberdrola doing to manage this risk of supply chain, particularly in solar? So that's question number one. Number 2 is, you mentioned that 90% of CapEx is aligned with EU taxonomy. What is 10% of that CapEx that is not aligned? Can you give us a couple of examples so that we can get a flavor of what are these things that are not in line? And finally, in terms of biodiversity, you had a really interesting verbena earlier this year where you decided to -- if I remember correctly, you said by the year-end, you're going to come up with some KPIs to measure diversity. It's a thankless thought. It's really hard to measure it. So have you come up with any KPIs that you can share today or maybe at your full year results?

Okay. I think I can take the first one on photovoltaic and supply chain. Yes, basically, I mean, you're referring to the -- specifically the polysilicon made in some regions in China where we have this -- there's a suspicion of forced labor. I can tell you, we work in steps. The first thing we did when we got to know that was to contact our suppliers and to ask them for sign-ment of an explicit commitment not to use force labor and not to use specifically polysilicon manufactured in those regions. And they agreed. They signed that agreement. That is in addition to all the Code of Ethics and the contractual general agreements that, of course, forbidden, but we wanted this explicit commitment from them. The third thing we are doing, and this is a problem that no company can solve alone. We are working together with the associations, trying to put in place traceability systems. But this is -- nothing is going to happen in 6 months' time. The implementation of a physical traceability mechanism needs to account with the collaboration of all the supply chain. And that is what we are trying to work here in Europe with Solar Power Europe Association, and in America through the solar association down there. And this is a step-in process. First is talking to suppliers. Second is working together with the associations, trying to look forward and to see how we can improve that. As of now, in Europe, there is no ban on imports. So we are absolutely working according with the law. And in America, we are -- according with the local regulation too. On biodiversity, I think Agustin, this is for you, too.

Yes. That's true. As I said, we are -- I mean, it's not easy to measure biodiversity, as you know. But we are coming out with some KPIs. We'll give you some example. Specifically in endangered species, we have impacted, killed 60 individuals in Spain in 2021. We are doing the same assessment in the different geographies. And we are putting in place first, how to reduce this impact, in those endangered species. We have been doing that in the past for many years, but we are stressing, we are doing even further. And then we are also evaluating, and this is also a part that we are engaging with the university and the NGO community, how to create projects that will compensate those impacts that we are always going to have. So measuring the impacts in individuals. It's been done, and we have the data doing the analysis of the most important installations that we are doing. And trying to agree on which projects should be done to compensate to be positive in nature as we want to be. And we are very confident that we are going to achieve that. And we can give you more detailed examples afterwards if you wish. Also, some examples on online EU taxonomy. It's about retail and supply, investments and also corporate investments like IT, security and so forth. So these are the kind of things that are not aligned, but they are needed.

I think I can clarify that as well. Basically, on the European regulation, first step is you are eligible or not eligible. Only what is eligible can be then analyzed, whether it's aligned or not aligned. Let me put that way very positively. More or less 100% of our eligible CapEx is aligned. But only 90% of our CapEx is eligible because the rest is activities, which are not included in the European regulations, which IT, retail, these type of things. Yes.

I've got 2 questions. The first one is on the -- sorry, it's Sharon Vieten from Columbia Threadneedle. First one is on cybersecurity. Just in terms of, maybe not Iberdrola, but maybe you're looking at a modern utility operating profile. What is the most vulnerable point for utility? What is the most vulnerable asset that the utility has or the most softest entry point? And the second question was on Slide 55 of the presentation, and which is on governance, I was quite curious actually for a large company like this, why and how does decentralized governance work?

Okay. The utility part is easy. The most vulnerable is the one you don't know you have. Therefore, inventory, internal inventory, but also understanding relationship with broader ecosystem, third-party supply chain is the key challenge. Yes.

I'll take the one on corporate governance. I think the key for this success is that it is very clear who does what, okay? So the structure is based on 3 layers. Iberdrola stays as a holding company, and our responsibility is on setting the strategy and supervising operations and that is strategy implementation in addition to the corporate financing of the group of Iberdrola, I'd say. Then you have the second layer, which is the stockholding companies at country level. Those are responsible for taking that strategy down to the country. And then we have the so-called Head of Business Sub-holdings, which are actually the companies and the managers in charge of implementing strategy, investments, operations, customer relations, et cetera. So the model is very clear. And it has to do with allocating clear responsibilities in different places. I think that the company has a conviction, which is we need to be close where our customers are, where our regulators are. And this decentralized model has the advantage of providing consistent transversal strategy systems synergies, but with local operations. It has been working for 1, 2 decades. Any other question in the room?

Gonzalo Sánchez-Bordona from UBS. I have 1 question on -- you mentioned earlier that you're trying to talk to the industries to help them decarbonize. And I was wondering, there are the obvious ways of doing this by doing hydrogen projects together and transportation and so on. But on those industries that are harder to decarbonize, what does the dialogue look like from your side? What is -- what you're trying to achieve? And whether they listen to you or -- is basically, are you looking for collaboration? Are you looking for doing projects to them in, I guess, for doing more renewables? Or is it just, I mean, you should do this, you are trying to lobby for something more -- less specific, I would say?

Yes. Well, first, it is not -- many of them are coming to us, trying to figure out how to decarbonize their operations. There are low-hanging fruits, as I said at the beginning, like being supplied with renewable energies, put in place self-consumption activities and also decarbonizing [ loads ] on pressure hit. But there is also collaborate -- and we are energy partners for them. We have our set of engineers, helping them to reengineer their processes to decrease their energy cost and it's been quite successful so far. There are a way of collaboration. It is about new technologies. We are talking with the steel industry. We are talking with the cement industry. We are talking with the ammonia, we have been talking about that before. And figuring out how we can decarbonize those hard to reach sectors with new technologies. And we have our -- some different tools like our investment program we're pursuing in which we engage with start-ups that are dealing with this. It was 2 weeks ago, the MIT visited the companies dealing with cement, dealing with steel, dealing with batteries and so forth. So I think there is, like, I wouldn't say a hype, but a real interest on the companies to decarbonize. We have had meetings with cement industry that 1, 2 years ago, it was, like, crazy for us to have because they are interested, really interested on that, and we see that as a big opportunity.

Any other questions? Yes, Andrew.

Yes, It's Andrew Moulder, CreditSights. So I just got a couple of simple questions. One of the goals you talked about was increasing your storage capacity by about 50% by 2030. And I just wondered, does that include the 4.5 gigawatt pipeline that you have of hydro in the Iberian market? Or is it mostly battery storage? Could you just talk about where that's going? And secondly, I just wanted to ask you about the voluntary carbon market. I mean, I struggle a little bit with that because it just increases everyone's costs. So why would someone enter into a voluntary carbon market other than sort of altruistic reasons?

I'll take the one on storage, okay? Basically, the jump is from 81% at the closing of 2021. Then with the recent capacity additions, we reached 100%, which was mentioned by Armando this morning. And up to there, it depends on the pipeline that we have and whether that fulfills on what the conditions that Armando explained today, which is basically a stable regulation. But most of it is hydro-pumping. In the 121 gigawatts hour figure, I think that 4 batteries is roughly 3 out of 121. I mean, our giga-batteries are basically the hydro-pumping stations. And batteries play a different role, play a role in peaking capacity whenever the distribution network, for instance, cannot cope with it.

Well, regarding the carbon markets, I think that this energy transition will bring new energy products. So we don't really think about, for example, heat as an energy product. But it's synergy product and if we think about heat instead of about fossil fuel or electricity, then new opportunities appear like in storage heat or providing the heat to the industrial customers and so on. And CO2, from my point of view, from our point of view, is one of those products that comes with the energy transition. So CO2 is a product of the energy transition, the same as the kilowatt hour, the same as the heat, the same as hydrogen. So --because it's a product, there will be a market. There is a market, a small market of EUR 1 billion in 2021 that is growing, and we will see what is happening. But the point is that companies are willing to decarbonize. And at some point, they can't, and they are trying to look for mechanisms for -- this is the conversation. And the reasons could be altruistic as you mentioned, but could be because they want their customers to -- they want to offer to the customers a decarbonized product. Just as an example, if you want to have a beer that is being produced with decarbonized fertilizer, the cost of the beer increments between 2% to 3%. That's all. So maybe your customer will buy this decarbonized product, right? So we want to be ahead of that. We want to explore that, and that's why we have set up this business unit to see to what extent these carbon markets will have -- will be as big as it's going to be in the future or not. But we want to be prepared because CO2 is a product of this energy transition.

Any other question?

Yes. Can I just ask 1 more question, which is just about heat pumps, really. I mean, we've all got -- well, we hear about it in the U.K., but I know from looking at it, it's about GBP 10,000 to install a heat pump roughly in the U.K. as opposed GBP 1,500 for a boiler or something like that. And I just wonder, what's it like in your other markets in, say, Spain and in the U.S.? I mean, what's the relative cost? And do you really see that changing enough to incentive people to move much into the heat pump market or to use heat pumps for their homes?

Yes. This is a good question. So it's going to happen little by little. First, the new buildings. Regulation in Spain and in some other countries really force new buildings to have heat pumps. Air-to-air heat pumps, air-to-water heat pumps or whatever. So I would say new buildings, it's pretty clear, and it comes with the cost of the building and that's all. So retrofitting is the big part of the share of this battle for residential heat, let's say so. The ratio that you have mentioned is quite accurate in many geographies, because it's not only the heat pump, but it's the installation cost and it's becoming -- it's a real barrier for that. So 2 things that will help to overcome that. First, it's grants that we have in many countries. So recognizing that this is a barrier, most of the grants are the body for the energy transition at the residential level are being devoted to this retrofitting with heat pumps. Second is technology. I think there is a lot of room for the equipment, not installation, but the equipment of heat pumps to decrease the cost through the scaled manufacturing. Today, manufacturing heat pumps, it was said by one of the big manufacturers in a meeting we had, like, 1 year ago. It's really somehow handmade, not all handmade for sure, but it has a lot of room for improvement through automatization. So it will decrease the cost a lot. So it's a mesh -- it's a mix of political [ ambiguatory ] wheel and also technology advancement that will provide this change. And it's going to take time. I recognize that it's going to take time. But I show the Swedish example in which it's been done and it's successful.

Thank you. Any other final question? Okay, then 5 minutes earlier than the scheduled. I want to thank you all in the name of Iberdrola people. We came back. Thank you for your attendance. Thank you for connecting through the web line -- the website and see you soon. Goodbye.