Redeia Corporación, S.A. (RED) Earnings Call Transcript & Summary

[Presentation] Good morning, ladies and gentlemen. I'd like to start this event by thanking all of you as shareholders for participating in this Annual General Meeting of Red Eléctrica Corporación SA, covering the business year 2019, which we are holding on second summons. I'd also like to group the -- greet the media and to thank all the professionals who've made it possible for us to transmit this event, also the interpreters both in sign language and in English, who are helping us. So along with me, I have the CEO, Roberto Garcia Merino; and the Board Secretary, Rafael Garcia de Diego. And we've also got the rest of the members Board of Directors who are attending remotely, duly authorized by the Board and in line with the legislation, which I'll be referring to later. That means that we have online with us the following directors: Carmen Gómez de Barreda; María José García Beato; Socorro Fernandez Larrea; Antonio Gomez Ciria; Arsenio Fernandez de Mesa; Alberto Carbajo Josa; Mercedes Real Rodrigalvarez; Maria Teresa Costa Campi; Antonio Gomez Exposito and Jose Juan Ruiz Gomez. So thank you to all of you for making this a special effort to have -- to attend remotely. And in order to minute the proceedings of everything that goes on today and to look at the votes and to report the results, we have the notary from Madrid, Eduardo Martin Alcalde. And we'd also like to thank him for being with us here today. So I hand over to the Secretary.

Good morning. Good morning, ladies and gentlemen, shareholders. As you know, with the legal declaration of the state of alarm on March 14, 2020, in Royal Decree, [ 463/2020 ], which has been extended several times, and which is still enforced today, there are legal limitations for the free movement of people around the Spanish territory in order to try and reduce and control the contagion of COVID-19. For this reason, and in order to protect general interest and the health of everyone involved in the organization and protect the rights of shareholders and other stakeholders, the Board of Directors and its meeting on March 31, 2020, agreed to hold this general shareholders' meeting in our headquarters and with exclusively remote attendance, that is without shareholders or the representatives being present in person, with no one attending those general shareholders' meeting, except those essential for its organization. And so members of the Board, the only people who are actually present in this room, the Chairwoman, our CEO and myself as Secretary of the Board. All other directors are attending the session remotely, as our Chairwoman has just pointed out. And all of this in accordance with the provisions of the Royal Decree above and the complementary legislation regulating the state of alarm and its various extensions as well as in the joint statement by the CNMV and the corresponding agreements of the Board of Directors in the meeting held on March 31. In order to take part in this general shareholders' meeting, the company has offered shareholders the possibility of using the ordinary procedures for proxy voting and remote information, allowing them to also vote remotely and to participate in the general shareholders' meeting following the procedures that have been defined and posted on the corporate website. Of course, the peculiarities of a general shareholders' meeting that is attended only remotely, we will follow every other part of this general shareholders' meeting in accordance with the other general provisions established in the regulations for our ordinary general Shareholders' meeting. As usual, you may follow this general shareholders' meeting live by streaming or on our website once it's concluded. There will be simultaneous translation into English as well as translation into sign language for people with hearing disabilities.

[Foreign Language] The proposed resolutions that were made available to all of you in the website and through the shareholder help desk, we have also provided the full text to everyone who's requested it. They extend documentation. And so we've been them to have been fully read insofar as it's necessary in order to run this meeting. I'd like to inform you that as in previous years, we're carrying out an external audit into the procedures of the -- and the actions of the general meeting in order to make it more reliable and transparent, and that will include the accounting of votes and proxies in the general meeting, and the preliminary results will be published from the audit immediately the general meeting finishes. They'll be on the website. And also, once we've fully finished it, we will publish the full results. In order to guarantee the shareholders can exercise their rights, if you wish, you can ask for certification of your vote, which will be sent to you with due verification from the external auditor of the general meeting. Without further ado, I'll hand over to the Secretary to report on the constitution of the general meeting.

Well, first of all, I'd like to point out that as defined in our company bylaws and the regulations of the general shareholders' meeting, this general shareholders' meeting will be chaired by Mrs. Beatriz Corredo Sierra, Chairwoman of the Board, and I will act as Secretary since I am the Secretary of the Board of Directors. This general shareholders' meeting of Red Eléctrica Corporation has been called by the Board of Directors through an announcement published on the website of the CNMV and on the company's website on April 3, 2020, and in the newspapers, EL PAIS and Expansion, on April 4, 2020. This general shareholders' meeting is going to be held on second call, since on first call, we did not achieve sufficient legal quorum. As stated in the call, this general shareholders' meeting can be attended by all shareholders that have demonstrated their status by certifying the registry of their shares in 5 days in advance to the date of this general shareholders' meeting. I'd like to remind you that those shareholders that have opted to vote remotely early as well as those who have decided to follow this general shareholders' meeting remotely and vote when the time comes will be considered, to all intents and purposes, as shareholders present in this general shareholders' meeting, according to the legal provisions and the regulations of the general shareholders' meeting and in the specific procedure approved by the Board for remote attendance of this general shareholders' meeting. To exercise your voting rights, we have taken into account limitations on shareholding established for the electricity sector and in our bylaws. If any of the shareholders or their representatives would like to have their votes against or their abstention on any of the matters presented for your approval, you may state it notifying the notary remotely and establishing your identity and justifying the number of shares that you own or hold by proxy as well as the direction of your vote as shareholder and/or proxy and the direction of that vote.

And now the Secretary will inform you on the attendance list of this general shareholders' meeting.

Final list of participants stand as follows. Present, 166 shareholders owning 118,103,114 shares and represented 1,154 shareholders owning 215,633,808 shares. In total, present and represented in this general shareholders' meeting by proxy or advanced voting or following the streaming, we have 1,320 shareholders owning 333,736,922 shares or 61.68% of the company's share capital. After applying the legal limitations I referred to above, the company's shares with voting rights are 538,724,576. Therefore, to exercise voting rights of the 118,103,114 shares held by shareholders present, 115,747,690 shares voting rights and of the 215,633,808 shares held by shareholders represented, all of them have voting rights. In total, we have present and represented 331,381,498 shares with voting rights, which is 61.512% of the aforementioned 538,724,576 shares with voting rights. I'd like to point out that the company's treasury stock amounting to 2,355,424 shares have been included in the calculation of percentages necessary for valid quorum, although they have not been included in the counting of shares with voting rights, as defined by the legislation currently enforced. Mr. Notary? The notary has the floor. Yes. So we have a quorum. We, therefore, have the quorum required for holding this meeting on second summons to deal with all the business on the agenda, taking that into account. And so I'd like to inform the shareholders that the list has been recorded duly and will be posted to the website so that everybody will see it with the approval of the chairperson. And now I'm going to give the floor to the notary in order to give you due legal advice regarding the attendance list.

I'd just like to say that any people attending who have any reservations or challenges regarding the number of shareholders attending and the capital present and represented, they can please tell me so now.

And I now give the floor to the Secretary again in order to read the proposed resolutions filed by the Board of Directors on the business in the agenda.

As has been pointed out by the Chairwoman, the full text of the matters for approval and for information is in the documentation that has been made available to all of you. So we will take that as read, and I will just summarize the content of the essential elements in each item. First, examination and approval, if applicable, of the annual accounts, statement -- financial position income statements, they may have changed in equity for Red Eléctrica 2019. Second, examination and approval of the consolidated annual accounts and the management report of Red Eléctrica Corporación for the year 2019. Third, examination and approval, if applicable, of the proposed allocation of profit of Red Eléctrica Corporación formulated by the Board of Directors and therefore, the payout of the dividend for the year ended December 31, 2019. Fourth, examination of approval, if applicable, of the report for nonfinancial information of the consolidated group of Red Eléctrica Corporación for the 2019 financial year. Fifth, examination and approval, if applicable, of the management and performance of the Board of Directors of Red Eléctrica Corporación during that year. Sixth, appointment of directors of the company. And here, we have 3 different matters. First, ratification of appointment as director within the category of other external and Mrs. Beatriz Corredo Sierra agreed by the Board in its session of February 25, 2020 for a term of 4 years, as defined by the company bylaws. 6.2, ratification of appointment as Executive Director, Mr. Roberto Garcia Merino, agreed by the Board of Directors in its session on May 27, 2019, and therefore, his appointment as such for a term of 4 years as defined by the company bylaws. Three, reelection as Independent Director of Mrs. Carmen Gómez de Barreda Tous de Monsalve, proposed by the Appointments and Remuneration Committee for a term of 4 years, as defined by the company bylaws. Seventh delegation in favor of the Board of Directors for a 5-year term, power to increase the capital stock at any time once or several times, up to a maximum of [ EUR 135,270,000 ], equivalent to half the current share capital and the amount and issue rate decided by the Board of Directors in each case. Is delegation in favor of the Board of Directors for a 5-year term and with an overall limit of EUR 5 billion of the power to issue one or several times directly or through companies of the Red Eléctrica Group debentures, bonds and other fixed income debt instruments of a similar nature, whether ordinary or convertible or exchangeable for shares of the company or other companies of the Eléctrica Group or other companies that are not related to it, so that the company can guarantee the issue of new convertible or exchangeable paper. And 9 are the authorizations to be given to the Board of Directors for the derivative acquisition of treasury stock and the approval of a share remuneration scheme for employees, members of management and executive directors. Matters for approval are 3 within this point and 1 authorization for the derivative acquisition of treasury shares by the company or by companies in the Red Eléctrica Group as well as direct award to employees, members of management and executive directors of the company and companies as remuneration, as defined by the company's bylaw. All of this for all the companies of Red Eléctrica Group in Spain. 9.2 approval of a remuneration scheme also for a 5-year term, and employees, executive directors and members of the management of the company and of the companies belonging to the Red Eléctrica Group in Spain. And finally, the third matter is the revocation of previous authorizations by this general shareholders' meeting in the annual meetings of 2015 and '16 for the derivative purchase of treasury stock and the remuneration scheme in the amount not authorized yet. Item 10, approval of the remuneration of the Board of Directors of Red Eléctrica Corporación SA. There are, in fact, 2 items within this 10th item, approval first of the annual report on remuneration of the directors of Red Eléctrica Corporación already approved by the Board of Directors; and 10.2, approval of the remuneration proposal for the Board of Directors of Red Eléctrica Corporación for the 2020 financial year. There is a report of the appointments and remuneration committee, and the proposal is the same quantities and concepts as for the year 2019 and proceeding. 11th, reappointment of the statutory auditor of the parent company and of the consolidated group. Propose that KPMG Auditores [indiscernible] be reelected as statutory auditor of the parent company of the consolidated group for a period of 1 year for financial year 2020, as defined by the Capital Companies Act. 12 refers to the delegation for full implementation of resolutions adopted at the general meeting of shareholders upon the Chairwoman and the Board of Directors until they are registered in the appropriate registries.

Having concluded the reading of the proposed resolutions, the Secretary will now briefly report on the agenda items for information purposes.

That's correct. Item 15 is the annual corporate governance report of Red Eléctrica Corporación, approved by the Board of Directors and included as an annex to the company's annual financial statements. The report follows the same structure as the 2018 report after analyzing the best international practices of similar companies, both with respect to its format and its contents, including summaries, graphs and links to the corporate website in order to facilitate its reading and with direct access to documents of interest. As usual, the report includes the most significant practices followed by the company in 2019 in the area of corporate governance. It also contains information about the self-assessment of the Board of Directors and future activities in corporate governance that will be carried out by the company. The annual corporate governance report is available in English and Spanish on the company's website. Also all the documentation of this general shareholders' meeting that has made available to all of you is on that website. Item 14 is the report of general meeting on the amendment of the Board of Directors' regulations. The Board of Directors has approved 2 amendments of its regulations since the last general shareholders' meeting was held in March 2019. First, in the session of April 30, 2019, in order to strengthen the role of the Board as supervisory and guarantor of the independence of the operator of the electrical system, which is legally attributed to the Red Eléctrica España subsidiary. And then on March 31, 2020, an amendment to incorporate some adaptations to Law 11/2018 on nonfinancial information and diversity, updating the scope for the Board and its committees on sustainability, reinforcing the supervision of the Board on activities carried out by the group and companies and to incorporate the concept of corporate reputation amongst the principles and inspire the activities of the Board of Directors of the company. In compliance with the Spanish code of good governance for listed companies, which recommends that shareholders be informed in the general shareholders' meeting on whether any of the recommendations of the code are not being complied with, I will inform you that Red Eléctrica in 2019 have once again complied with all recommendations with a single exception, recommendation number 48, which suggests that high market cap companies like Red Eléctrica should have a separate appointments and remuneration committees. As we've explained in the annual corporate governance report, the Board did not deem it advisable to separate into 2 committees because of the small size of the Board in comparison with other high cap companies, and because these committees would not have sufficient scope for their activities in the year to justify the existence of 2 separate committees.

This year, in compliance with the rules approved for the holding of this general meeting online, should any shareholder wish to ask a question on the business included in the AGM, they can do so in writing over the touch points that have been set up for this and which are explained in detail on the call to the meeting. And if you wish what you say to be minuted verbatim, you can ask for that in writing, sending your information to the notary over the touch points I've said. So we can now declare that this meeting, this general -- annual general meeting of shareholders of Red Eléctrica Corporación SA quorate, covering the results of 2019 and can deal with, and vote on, the business on the agenda. Having constituted this general meeting, I'd like to talk briefly about some of the strategic aspects of the activity of the company in the group in 2019 and about how we're being affected and how we're dealing with the COVID-19 crisis. And then the CEO will also speak and go into far more detail about some of these matters that I'll be talking about. So first of all, I'd like to mention what a great honor it is for me to take charge today for the first time of a general shareholders' meeting in Red Eléctrica. I'd like to express my excitement, enthusiasm and responsibility at leading this major corporation as its non-executive chairwoman and to lead this exceptional human team that it comprises. I'd like to thank the Board of Directors for the trust that they've placed in me and, above all, for the support of all of you as shareholders should you consider it appropriate to confirm my appointment at this general meeting. I'd also like to take this opportunity to dedicate a few words to my predecessor in this position, Jordi Sevilla, who made a significant contribution to the group through his support for telecommunications, internationalization and innovation, and for reinforcing the TSO to face the important energy transition that we're currently working on. Our meeting today cannot take the form we prefer and which we're used to, so we are holding it online rather than face-to-face as we used to. But the COVID-19 pandemic has forced us into a situation we couldn't have imagined in the past. The main and most dramatic consequence of this crisis is the loss of so many lives, so many loved ones to whose families we express our most sincere condolences. This crisis has also led Red Eléctrica to an explored terrain despite the fact that we were able to make preparations sufficiently in advance to deal with its consequences. In February, we started by creating monitoring groups to observe the COVID-19 situation, which enabled us to apply a strict contingency plan that, among other measures, and to guarantee even more redundancy, set up a third control center capable of assuming full control of the system should it be necessary, although this is a highly unlikely situation. Nonetheless, we wanted to take all possible precautions. So we've now got 3 fully equipped control centers. This has enabled us to ensure the provision of the essential services that we offer society at all times. The supply of electricity and connection to the telecommunications network, which are operating with full normality. We could also rely on the digital transformation of the company. This is something that we've been preparing for some time to enable us to work remotely. And above all, we have had what I define as the soul of Red Eléctrica, the people, its employees who have once again shown how great their commitment and professionalism are. And I'd like to thank all of you for the way that you have worked for us and repeat that we have tried to make all means available to you to work safely. And I'd also like to take a moment to honor the memory of José Folgado, who was Chairman of Red Eléctrica from 2012 to 2018, who passed away unfortunately, in March last year. The company achieved several important milestones during his time in charge, and he will be remembered for his humanity and dedication to his work and above all, to people. He was a real gentleman. I'd also like to remember Santiago Lanzuela, who was a member of the Board of Directors at Red Eléctrica from 2014 and 2018, who passed away last April. I'd like to send my sincere condolences to their families and to all of those who have lost a loved one to this illness. Obviously, there's nothing we can say to alleviate your pain, but we shan't forget them. Protecting the health of our employees and securing the correct operation of the national electricity system and the communications and satellite networks have been the principal concerns of Red Eléctrica during the pandemic, and especially during the application of the state of alert that was declared last 14th of March. If ensuring the electricity supply is essential for the country at any time, it's even more important during these troubled times. This was mentioned during the visit of the King and Queen of Spain when they came to the control center, operations center here in May. They acknowledged the critical value of the infrastructures run by Red Eléctrica. And I thank them personally for their visit on behalf of the whole company and its Board of Directors' gratitude that I can here share in public. A critical situation like the present also underlines the values of a company such as ours as an essential part of the society in which we carry out our business. The values of community, sustainability, social awareness and environmental sustainability are vital, and that is why Red Eléctrica has joined many and diverse social campaigns in support of the people and families who are suffering greatly in this crisis, and initiatives, which aim to promote business activity through innovation, placing emphasis on measures that will enable a recovery that ensures the conservation of the environment and the well-being of all of us. We wanted to show our commitment in these dire circumstances with actions that have the greatest impact on the most immediate environment of our citizens. Among the charitable activities that we've taken part in to help those who are experiencing the most difficulties in a pandemic, we've got a brief list. We joined the [indiscernible] Red Cross program to help provide food and company for 25,000 vulnerable people during the last 2 months. We've also provided financial support for the production of medical materials, mainly through our participation in the open ventilator project, an artificial respiratory mechanism approved by the health department and organized by the Celera Foundation. Red Eléctrica has supported the rural environment through a number of initiatives shared with organizations we've already worked with before to help maintain small farms as normal channels of distribution have broken down. In some cases, we help them to sell their produce. And in others, we've donated fresh produce to institutions such as [ Mensaheros de la Paz Caritas ] or food banks that help families and vulnerable people at risk of exclusion. A fourth type of collaboration that we've put in through our technology subsidiary is programs to support start-ups to develop projects that can appear in the short-term to help ease the economic and social impacts of this crisis. We assure you that we shall continue to work and express our social commitment in the coming months and years, cooperating as part of our corporate social responsibility to drive the return to the normal life that we all desire. We'll help with our activities to revive the industrial fabric of Spain. We're aware of the difficulties that one of our main stakeholders are going through, namely our suppliers, always putting the safety of our workers first and implementing safety protocols adapted to every case. As I was saying, and as you saw in the video earlier on, Red Eléctrica is now celebrating its 35th year of operations. Throughout this time, the company has assumed its responsibility to develop a business model that's capable of converting challenges into opportunities. And good news, we've had a lot of challenges. Also relying on foundations of excellence, innovation, integrity, honesty, and combining business activities with care for the environment and the creation of shared value with society. So today, like 30 years ago, our call is clear, to be of service the society as a global operator of strategic infrastructures. With this as our base, our company runs its business and contributes sufficiently to the decarbonization of the economy and the energy transition by integrating renewable generation favoring territorial unity and social inclusion by extending connectivity. These are challenges and commitments that we accept. We want to play a leading role using sustainability as a prime force as we advance, especially when it comes to working and generating a truly positive and effective value for society. We find ourselves in a time of global transformation in which business is an active driver of change, and that change is speeding up as the pandemic rolls out. We have to be alert to the challenges of the global economy. And more than ever, we must move forward day by day, but always thinking of the future and what it means to us. We know what we want to do in Red Eléctrica Group. We want to be at the heart of the global transformation as the main operator of strategic infrastructures in Spain, both in the electricity sector and in telecommunications. We manage one of the biggest electricity transmission infrastructures in South America, and we're one of the largest satellite telecommunications operators in the world, following the purchase of Hispasat last October. And this is the first general shareholders' meeting under this configuration of the group in which we have the satellite operator within our perimeter. We're also a company that looks to technological innovation as the tool for change, a way of generating new business. And we also rely on our most important asset, the talent and commitment of more than 2,000 employees that comprise this business group. 35 years after Red Eléctrica was founded as the first company in the world exclusively set up for electricity transmission and running the electricity grid, the Red Eléctrica Group has become a business group that is more diversified in key sectors of the economy, stronger, more robust and with more capitalized activities. We're larger with more investment, and we're more stable through the diversification of our business in the electricity and telecommunication sectors, in fiber optics and satellites, expanding our market with a presence in Peru, Chile and Brazil, limiting risks whilst, at the same time, ensuring the independence of the electricity system operator. In 2019, this has taken the form of a major investment effort in line with our strategy plan and diversification program. This year, it's had a total outlay of EUR 1.87 billion, which is 3.4x the amount invested in the previous year, of which EUR 396.4 million has been invested in electricity transmission in Spain, EUR 226 million in international investment and EUR 1.21 billion in the telecommunications business. But this has also led us to becoming a business group that's more committed to sustainable development, more necessary to achieve energy transition, more socially useful and more valuable to our stakeholders. To show this with examples, I'd like to mention some figures from 2019. As regards to our fundamental mission, we've maintained the electricity supply for 99.99% of the time in Spain and our installations in Peru and Chile have achieved availability of more than 99.5%. And in Hispasat, we've maintained 100% availability of the working power of the satellites. We've made it possible for energy produced from renewable sources to amount to 37.5% of all the electricity generated in the Spanish electricity system. We're, therefore, progressing towards our 2030 sustainability pledge, which was to integrate 100% of renewable energy available to the electricity system safely, minimizing waste and speeding up compliance with the targets for energy transition. Thanks to our activity, we've prevented the emission of over 26.6 million tonnes of CO2. Our direct investment in the transmission grid in Spain resulted in an estimated EUR 641 million of production for the business sectors involved, which accounts for more than 4,727 jobs. We've contributed to stability and quality in employment with a rate of 97% permanent jobs in our group. We've acted as an engine of the economy, promoting business and industrial development and job creation throughout our supply chain, to which today comprises over 1,000 suppliers, 91% of whom are based in Spain. We've contributed to society with an overall tax contribution of EUR 732 million. We can say that 44% of the value generated by our company, therefore, comes back to society through our tax. So the central proposal made by the Red Eléctrica Group is to play a leading role in energy transition. The electricity sector has not stopped transforming, innovating and improving its service to society over the last 35 years. And we're now at a crucial moment. We have to tackle the climate crisis by changing the way in which we generate, distribute and consume electricity, making the decarbonization of the economy possible through electrification, energy efficiency, digitalization and the central role of the consumer. One of the 4 essential pillars of our strategy plan for 2018 to 2022 is to reinforce the TSO to enable an energy transition to take place. The fundamental elements for this transition to move forward are the continued investment in technology for developing a robust, smart and ever more interconnected transmission grid, reinforcing its links and the optimization of an increasingly complex electricity system. Progress in demand management and measurement with new applications. The addition of storage system and new elements, such as electric vehicles. There must also be innovation in smart networks, digitalization and data hubs and the emergence of new services to make it possible for different agents to coordinate. Red Eléctrica accepts its responsibility for this energy transition and the fight against climate change by supporting the change towards emission-free energy vectors in all sectors of the economy and promoting greater energy efficiency in a more technology-based scenario, which society as a whole will benefit from. The Spanish National Integrated Energy and climate plan for 2021 to 2030 contains even more ambitious goals than those set by the European Union because it establishes a target almost tripling the installed capacity for wind power and solar power. 53% of the investments in Red Eléctrica's strategy plan 2018 to 2022 are dedicated to making this possible. The safe integration of renewable energy is one of the major challenges facing the running of the electricity system and one of the obvious goals of our company. This integration involves major challenges, an increasing complexity for our system. The work of Red Eléctrica to integrate renewables is shown in our day-to-day activities through the efficient operation of the control center for renewable energies, which we call [indiscernible]. This technology tool, the first of its kind in the world, enables us to face the challenge of including renewable energy in our electricity systems, above all, wind power and solar power, which are highly variable and difficult to predict their supply, and they have less capacity to adapt to demand, depending as they do on weather conditions. Another significant aspect of energy transition is the move towards electric mobility. Smart recharging of electric vehicles would make a more efficient electricity system possible. With better integration of renewable energy in this context, we're advancing towards this scenario by tracking and monitoring electricity demand for the smart recharging of electric vehicles. There are 4 mobility operators in our electric vehicle monitoring system at the end of 2019 with nearly 2,000 charging points under our control, more than 70% of which were for private use and the others for public use in public spaces. Meanwhile, information about the smart charging infrastructure of mobility operators became more important in 2019 with the issue of the national map of public smart charging points for electric vehicles with geographical references of the location of the public charging points belonging to all the operators. The publication of this map returned the firm resolution of the Red Eléctrica Group for a transition towards more electrical mobility as part of its objectives for 2030 to empower 100% of society to take an active role in this process of energy transition. We see the citizen as central to this change, and smart recharging a tool to encourage their integration in the electricity system as part of an energy mix that's predominantly renewable. From this perspective, 2019 has seen us working hard to formalize a number of agreements and deals related to electric mobility and demand management with different participants in this sector. Red Eléctrica de España signed a collaboration agreement with the Federación Española de Municipios y Provincias to provide technical support for electrical mobility, working with all the municipalities throughout Spain. And as part of the [indiscernible] initiative, Red Eléctrica de España has carried out actions to strengthen its actions with customers, generators, consumers, distributors, sellers, promoters, associations, et cetera, to reinforce context and guidance for customers on of the company, adopting a dynamic, flexible and digital approach that takes active listening to the needs and expectations of our stakeholders as our central tenet. These include adapting the implementation of the European Standards, the Spanish electricity system and advancing towards setting up an internal energy market, working with other important participants in the sector to define the road map for preparing the balancing markets to be managed by the system operator. There can be no doubt that playing a leading role in energy transition using all the drivers I've mentioned is our main response in the fight against the climate crisis. Since 2011, Red Eléctrica Group has shown its committed dedication to the fight against climate change, which has taken the form of the climate change action plan 2015, 2020, 2030. And we have a key objective of reducing our greenhouse gas emissions by 40% for each megawatt hour transported in 2030. A goal that was considered by the international body science-based target as ambitious enough to be considered a significant contribution to international commitments to climate change. Only 9 companies in Spain, including Red Eléctrica and 361 companies worldwide, have achieved this international validation of their targets for emission reduction. Besides that, in 2019, the company has signed up to the initiative business ambition for 1.5 degrees centigrade, stemming from the United Nations Global Compact and its local networks. That means a commitment to work to define a new, even more ambitious objective. I'd also like to mention that in 2019, Red Eléctrica completed an ambitious project to adapt its model of risk management to the recommendations of the task force on climate-related financial disclosures. The company has analyzed the risks and opportunities associated with the modification of climate variables, what we call the physical risk, and the modifications of the regulations, technological advances and changes in the markets stemming from the adoption of measures to fight against climate change. We've identified a total of 45 potential risks that altogether could either affect our facilities physically or the reliability of the system or other aspects related to the electricity business in Spain. These risks have been assessed in line with the criteria for exposure, sensitivity and capacity to respond. We've defined and ranked the most significant risks to monetize those which have been identified as having the most financial impact. The important risks derived from climate change with impacts within the timescale of 1 year have been added to the map of corporate risks and will therefore be overseen directly by the Board of Directors through its Audit Committee and Sustainability Committee. The fight to stop climate change implies a major transition within the energy model. One key aspect of this transition will affect the electricity sector. The changes derived from the new model also represent a series of opportunities for the Red Eléctrica Group, which must intensify its activity to strengthen its position at the heart of the electricity system. These transition opportunities for the Red Eléctrica Group from the changes to regulations technology, the market and reputations that are involved in the fight against climate change will be important given the main activity of our company, aspects that are related with energy policy established in the context of the European Union and especially those in the draft version of the Spanish National Integrated Energy and Climate Plan, which we call [indiscernible], are particularly important. And these scenarios have been used as reference points for all analysis. The electricity transmission group has been given an essential role in the context defined by these European and domestic policies as it provides critical services to secure the supply that makes it even more important in the system with very high penetration of renewables. These aspects are, therefore, a clear call for new investment in the transmission grid and also a new opportunity for business group for the company. In this context, one of our challenges for the near future is to make the plan for the electricity transmission grid for the period 2021 to 2026. However, making the new role of renewable energy, the new elements of the system and the new technologies, digitalization, distributed generation, self-sufficiency, safety and quality all compatible will only be possible if Red Eléctrica de España assumes new responsibilities and functions in a new less centralized scenario, requiring more coordination from all the agents involved. In this case, the company has identified opportunities linked to the development of new functions and services like the development of storage and other technology challenges that will form part of the energy transition process. Finally, the group's improved performance with respect to mitigating and adapting to climate change could have a positive effect on its reputation, leading to better financing opportunities and higher stock prices. We can see that the time for statements has passed, it's now time to act, act with greater responsibility than ever. With this in mind, the Red Eléctrica Group has embarked on specific actions to generate value and contribute to economic, social and environmental progress by adopting the 2030 agenda to contribute to sustainable development goals. We have a firm strategic commitment to sustainability, which we call our commitment 2030 across our business sector, guided directly by the Board of Directors through the Sustainability Committee, and we've confirmed it as an essential feature of our business strategy. Through sustainability, the company has consolidated a business model that can respond to the challenges of the future based on criteria of excellence, innovation, integrity and honesty to ensure that the group's business is compatible with the care for the environment and shared value generation through partnerships with our communities. The Red Eléctrica Group has made firm progress in 2019 towards acquiring long-term commitments by passing Red Eléctrica's 11 sustainability goals 2030, which constitute our road map and reflect our ambition to contribute with solutions for today's world. These targets are set out in the strategy plan 2018 to 2022 and enable us to define specific actions to guide the company's efforts to comply with the commitments accepted, create value directly for different stakeholders, to be an active agent of change to generate positive effects on society as a whole and to tackle the major global challenges that make progress towards a more sustainable world possible. I've already mentioned some of the targets of feature in our sustainability commitment, such as the reduction of greenhouse gas emissions, increasing the active participation of all of society in the process of energy transition, then safely integrate 100% of the renewable energy available to the grid. But I'd now briefly like to move on and discuss some other aspects I haven't yet mentioned. We want to be a benchmark company for gender equality and diversity by including groups at risk of social and employment exclusion, with the goal of achieving parity in the management team by 2030. The Red Eléctrica Group expresses its commitment to diversity, inclusion and nondiscrimination in its diversity plan 2018 to 2022, which is intended to inspire and to be a reference point within the group and in its social, working and personal environment for activating diversity of talent, social inclusion and employment, nondiscrimination, challenging stereotypes and overcoming cultural barriers. Gender quality is one of the vectors of this plan and is based on the principles of equal opportunities in employment, promotion of women to positions of responsibility, equal pay for men and women, promotion of shared family responsibilities, prevention of moral, sexual and gender based harassment and prevention of gender violence. The percentage of women in the Red Eléctrica workforce in 2019 was 25.9%. The number of women in management roles has increased again this year, reaching 31.8% in 2019. It was 28.8% in 2018. What's really important, too, is the presence of women on the Executive Committee, where they represent 55.6% of its members. And on the 31st of December, 41.7% of the members of the Board of Directors were women, and we're now 50% of the members of the Board of Directors. Now these figures mean that we are above average for the companies listed on IBEX 35. Their average is only 27.3%. And also above the 30% target recommended by the code of good governance for 2020, and even the revised figure of 40% proposed by the CNMV, the stock exchange commission. We're also promoting feminine stem talented companies through programs and agreements to encourage the presence of women in these areas of knowledge and training. There can be no doubt that training our young people is the key to ensuring we have the talent we need to face the future and to consolidate our commitment to the progress of our society, creating opportunities for qualified professionals to enter the labor market. In view of this, the Red Eléctrica Group has reinforced its twofold vocational training qualification for advanced power station technicians. The goals of this course, which covers both theory and practice, are to train professionals for immediate induction to specialist maintenance positions; to provide the sector with trained professionals with the know-how of Red Eléctrica de España and to endow young people skills they need to find employment and form part of the domestic industry. Our first group qualified in November 2019, and 80% of the students joined the Res Eléctrica group before the end of the year. And there are other sustainable goals that we have such as wanting to be a company financed with social, environmental and good governance criteria in 2030. Red Eléctrica, as a promoter of energy transition in Spain, is one of the companies spearheading the push for green financing. In fact, in December 2017, we became the first company in the utilities sector to transform its syndicated loan of EUR 800 million into sustainable finance by adding ESG criteria to its interest rate. We signed new long-term financing deals in 2019 worth EUR 375 million and $30 million with sustainability parameters. Continuing this trend, the company made another step forward in October 2019 by presenting its green finance framework to create financial instruments who will be behind energy transition projects in Spain and to encourage greater care of our environment. Barely 3 months after it was passed. Red Eléctrica has made its first bond issue worth EUR 700 million to finance projects that are eligible under the green framework. These initiatives Show Red Eléctrica's strategic commitment to sustainability through its sensible and transparent economic and financial management. Alongside people, we see innovation and technology as key aspects of global transformation. That's why we want to take a leading role in technology driving at least 120 tech innovation initiatives by 2030, making the world more connected, more sustainable and smarter. Our strategy plan, 2018 to 2022, establishes acceleration and technological innovation among its basic elements and proclaims the setting up of a new company dedicated exclusively to promoting innovation and technology in the electricity and telecommunications sectors. This company was created in June 2019, and it drives our energy transition and accessibility of information. That's helping to address the current and future challenges phased in global management of strategic infrastructure. To achieve this it organizes its activities in 4 priority areas: technological innovation for development of energy transition and telecommunications, open innovation, acceleration and venture capital and sales. In 2019, the Red Eléctrica group has made financial stake worth EUR 10.6 million, including EUR 5 million committed to the venture Capital fund. We are already starting on some of the initiatives, which you would might find out more about on our website. We're also pursuing 2 environmental goals along with the reduction of emissions, we've already noted to generate a positive net impact on the natural capital in the areas around our facilities and to be an outstanding company in that circular economy by 2013 as regards to the first, in line with the directive from the natural capital protocol and in view of the mutual dependence of the group's business and society, the company has spent in 2019, working on a pilot project-based on an existing installation to design a sensible method and analysis to apply to natural capital. The development and application of this methodology will enable us to advance an impact assessment and therefore, our knowledge of the net balance of our impact on biodiversity offering a definition of the measures we take to offset them and how ambitious they are helping us to identify and boost any possible positive outcomes, which will enable us to advance towards the positive results we want and then the conservation of natural capital. I'd like to mention that Red Eléctrica Marine Forest, this R&D project on the use of seeds fragments of posidonia oceanica to revive damaged areas of its natural habitat was awarded the XII Cinco Días in 2019 for business innovation in the category of the most innovative business initiative in corporate social responsibility. Moreover, as part of our progress towards a sustainable energy model. The company is working to integrate the circular economy into all our business. In 2019, this commitment took the form of the creation of a circular economy road map, containing specific goals and actions aimed at improving in several areas: materials, zero waste, soils, water and the final cross disciplinary category, which includes a range of aspects that add the criteria of circularity to our activities. As part of our commitment to the areas where we have instilled, the electric group wants to continue with the creation of shared value, committing ourselves to the horizon of 2030 as the year by which we will have completely eliminated the digital divide, which will mean 100% of people living in areas near our facilities can be connected. Here the Red Eléctrica group has a social innovation plan that establishes an open collaborative model for third parties as a way of responding to the needs and challenges of society through innovative solutions with a long-term positive social impact. The Red Eléctrica group has adopted a commitment to making social innovation, a transversal access when it comes to accepting new investment projects in the transmission grid. And the goal of countering the abandonment of the rural environment. This is an integrated plan. It works end-to-end, extending our contribution to the growth of society from the reduction of the digital divide to the expansion of sustainability -- mobility, taking in our support for local innovation and raising awareness of energy transition. In 2019, the company contributed more than EUR 8 million to social initiatives. That's around 1.1% of our net profits to the development and promotion of a total of 545 initiatives this represents an increase of 25% over those carried out in the previous year. More than half of these were aimed at the social and economic development of rural areas with activities to generate wealth as a way of encouraging repopulation of the country side. But we don't want to limit ourselves to apply in the best sustainability practices in the Red Eléctrica, we also want to extend them along our entire value chain. And that's why we include them among the goals of our vision for 2030 to be a driver of change for our suppliers and vendors. In 2019, we completed the first stage of our collaboration program with suppliers to reduce our carbon footprint, with 23 of the organization's most important suppliers taking part and accounting for around 57% of the emissions from the supply chain. We've also completed a training program on the fight against corruption in collaboration with the Spanish network of the United Nations Global Compact in order to train our suppliers on this matter and thereby consolidate the ethical values of the Red Eléctrica group among our suppliers. Ethics and compliance are fundamental pillars for the proper operation of our group. Also we're in the final stages of our code of ethics, with the fundamental standards that establish the group's ethical principles and commitments, adapting it to the most demanding standards of business ethics, the changing demands of our stakeholders and the changes that are taking place in our own structure. As regards the company's compliance system, I'd like to underline the Board of Directors in March 2019, approved the global compliance policy for the Red Eléctrica group, which contains our organization's firm commitment to the prevention, detection and response to any conduct that may run contrary to our legal obligations and commitments in the company, which we have voluntarily accepted in line with the principles and guidelines for behavior laid down in our Code of Ethics, parallel to our progress in social and environmental sustainability. 2019 has also seen us continue our efforts to advance in the application of best practices and good governance. The highlights of the year would include the appointment through Co-option of the CEO, Roberto and myself as nonexecutive Chairwoman of this Board of Directors, whose confirmation as CEO and Board members coming under the heading of other externals, respectively, are being submitted to this meeting for your approval as shareholders. Likewise, the reelection of the lead independent Director, despite the separation of the roles of Chair of the Board and company CEO, this reelection aims to preserve the checks and balances in the Board of Directors in favor of independent members, among other reasons. And because it's a popular idea among shareholders and proxy advisers. The choice of independent board member is also being submitted to your approval today. The update -- the update of the contingency plans for succession of the Chair of the Board of Directors and the CEO. And also the orderly succession of the roles of CEO and chairperson under the company's current model of corporate governance, which has worked efficiently in one-off situations. The application and permanent update of the matrix of individual responsibilities for the Board of Directors. All these aspects we've mentioned show the Red Eléctrica group's commitment to sustainable development and also to excellence and best practices in all the activities in our value chain. In 2019, Red Eléctrica was named ambassador of European Excellence by Club Excelencia en Gestión. This is a title given to companies and entities, which have a current EFQM 500-plus European seal of Excellence. And when we got -- given that, we scored over 600 points in their assessment. We also received the national prize for excellent, innovative and sustainable management awarded by the Club Excelencia en Gestión for our track record. And we also have a maximum, AAA, rating from Morgan Stanley Capital international rating agency, which places in the First Place in its sector according to the ESG rating model. So to sum up, our company possesses the 3 assets that define the global paradigm shift, electricity, telecommunications and talent. The talent of the 2,056 people who comprise the Red Eléctrica group and who put ourselves at the service of the enormous tasks now facing us all. The reconstruction of an economy is severely damaged by the effects of the pandemic, the best way forward is to speed up along the path we've already started out on and to work for a green recovery placing the fight against the climate crisis at the core of the new economic model, relying on sustainable development and advancing in the decarbonization of the economy, with a drive for energy efficiency, the use of renewable energy sources for a fair and inclusive energy transition that best meets the needs of all citizens and protects the environment. This doesn't mean losing resources, quite the opposite. It's a powerful tool for the creation of employment and growth. What's more, there can be no growth without sustainable development. So the road map for our 2030 agenda signed by the United Nations in 2015 and the achievement of the sustainable development goals are still fully valid. We cannot turn back on this path, rather, we must move ahead with even more impetus, in accordance with the wishes of the dozen European governments, including Spain, that the recovery from this crisis doesn't come at the expense of the Green Deal. We're in the position to continue advancing, the European Commission's Green Deal includes the ambitious but necessary goal of reaching climate neutrality in 2050. A target, that's also one that the integrated energy and climate plan presented by Spain is working towards, we have technology development that enables us to achieve this goal at a much lower cost, thanks to the enormous progress made in recent times. And we can also rely on the backing of a society in Spain that's among the most aware the challenge that climate crisis represents in the world. We're not starting from scratch, either because we've already achieved a lot. Our company is a witness and a driver of change. There was a turning point in 2019 because for the first time ever, the renewable energy installed capacity in the Peninsula outperformed all the other technologies. It was also a record year for CO2 emissions derived from electricity generation, which fell by 23% against the previous year. That's a very encouraging sign. It's essential, however, that we consolidate this paradigm shift. We have to rethink the grounds for our behavior as a society and also as individuals because there's no aspect of our normal life that the consequences of this phenomenon will not affect. No citizen, no institution, corporation or business [ conceits ] their responsibility for this global response. And at Red Eléctrica, we are thus reaffirming our commitment to this new model with the following drivers: taking a leading role in energy transition, guaranteeing a safe, efficient and sustainable power supply for everyone with neutral management of the transmission grid. We want to continue being a benchmark operator of telecommunications infrastructure, a strategic element for society. And for future economic growth. The reduction of the digital divide, improving connectivity between people and easing access to information and communications technology; technological innovation to respond to present and future challenges; protecting and conserving the environment; looking for solutions that generate the least impact or at least offset what impact we do have where possible. And the contribution to community development through programs of social collaboration and innovation with a special focus on the rural environment. We've been committed to progress sustainable development and citizen welfare for 35 years. Our mission will continue at least for the next 35 years. Thank you very much. And I'll now hand over to our CEO, Roberto García Merino.

[Interpreted]. Thank you very much, Chairwoman. Ladies and gentlemen, shareholders, it's a real pleasure to be able to address you for the first time as Chief Executive Officer of this great group. The Red Eléctrica group, which I joined over 16 years ago. It's a great honor for me to take on this responsibility. And I would first like to thank the members of the Board of Directors for their trust in me and especially you, the shareholders for ratifying my appointment in this general meeting should you consider it appropriate. I will devote all my energy, effort and commitment to not disappointing you. I'd also like to thank Juan Lasala, First Chief Executive officer at Red Eléctrica, for his over 18 years of commitment to this project, enabling Red Eléctrica group to become one of the top managers of electrical and telecommunications infrastructures in the world. Thank you very much for everything, Juan. Finally, allow me to also address a few words of gratitude to those who make all of this possible every day. A team of people that make up Red Eléctrica Group. I'd like to highlight their professionalism and their dedication, which enables us to successfully achieve the objectives we have set for ourselves. Before analyzing the year 2019 from the management perspective, I'll briefly reflect on our company's crucial mission, ensuring that supplies that are essential to our society, such as electricity and telecommunications are always available to everyone under all circumstances, including those that result from the current COVID-19 pandemic. In times, as complex as these is one we are truly tested and these are also the times when we are most needed. Our ability to respond to adapt to these unusual circumstances for society, and therefore, for the electricity system and for telecommunications infrastructure was and continues to be extraordinary. We've succeeded at managing normally an absolutely exceptional situation, working with the same intensity, operating the system, managing the grid, providing telecommunications services and giving the necessary support from all corporate areas to make everything work. And most importantly, without any relevant incidents to report and whilst maintaining the same quality standards. This emergency situation has tested the resilience of the outcome of years of work and effort. At Red Eléctrica, we've been developing action plans for over a decade and implementing the technical and human resources needed to react to any scenario. That is what we have done in phase with COVID-19, a contingency plan which has focused primarily on the following aspects: implementation of health and safety measures to protect our employees implementation in record time of a third electricity control center in Spain. Operating like the other 2 with independent and isolated teams, the availability of staff groups to intervene in the event of any fault or unforeseen event in the gin and the management and all of our group's employees working from home, whose presence in the workplace was not strictly necessary, both in Spain and in South America. We'll continue to do their work, absolutely with business as usual. In these circumstances, when the electricity supply and access telecommunication services, it's more essential than ever, I must proudly point out that Red Eléctrica is fulfilling its duties and responsibilities, and for this reason, I would like to once again highlight the great professionalism and dedication of our teams, both in Spain, Peru, Chile and now also in Brazil. Thank you all for your great effort to make this possible. I will now share basic data on the evolution of electricity demand given lockdown in Spain because, as you know, the electricity system is perhaps the most objective metric of the impact of this exceptional event on society. In the first weeks, after the declaration of the state of emergency on March 14, overall demand fell by between 8% the first week and 10% in the second week compared with obviously the same period previous year. In the 2 weeks that followed, when stricter lockdown measures were in place with only essential activities allowed, fall in demand intensified to an average of 20%. Once this hibernation state was reached, demand partially recovered with falls in consumption of around 15% with respect to comparable dates in the previous year. We now start analyzing our management of 2019 by making a brief reference to the highlights of the year, which I will then look at in more detail, together with the results of the year and the progress achieved so far in our strategic plan 2018, 2022. 2019 was a year in which the company had to take on major challenges as transmission agent and operator of the Spanish electricity system. Most notably, those undertaken to drive the energy transition, of which I would like to highlight a few. First, in 2019, we've designed the road map for energy transition. The presentation of the draft of the Spanish National Integrated Energy and Climate Plan 2021, 2030 or PNIEC, Spanish acronym. Special relevance for the achievement of Europe's energy targets by 2030. After designing the road map, the electricity transmission grid infrastructure planning process was launched; enabling us to identify the investments needed to address the significant changes that will take place in the electricity sector. In addition, in 2019, the new methodology for the remuneration of electricity transmission for the period 2020, 2025 was approved as well as the methodology for the remuneration of the electricity system operator, providing the necessary regulatory stability to carry out our activities in the electricity system long term. In addition, we've made progress in the electricity infrastructure business internationally, laying the foundations to start-up our activity in Brazil, a very relevant milestone was reached with the consolidation of our telecommunication business, the acquisition of Hispasat, which has positioned the Red Eléctrica group as a global operator of essential infrastructures, both in electricity and telecommunications in Spain and internationally, making it possible to guarantee access to basic services for our welfare state, such as electricity supply and access to telecommunications. Finally, in order to achieving the paradigm of energy transition and telecommunications development, we've founded a new company just over -- just under a year ago, with the purpose being the driver to accelerate all of our innovation and technological development capabilities in the group. Speaking about the development of one of the most relevant elements of our strategic plan in 2018 and 2022, which is driving the energy transition in Spain, the Red Eléctrica Group is working to efficiently contribute to decarbonizing the economy and connecting citizens through technical innovation and the sustainable extension of electrification and telecommunications, thereby guaranteeing connectivity and access to the new generation of renewable energies. In this context, the progress towards a more sustainable and decarbonized economy, the current COVID-19 pandemic is having a significant impact on the world's economy and particularly on the European economy. And for this reason, several European countries, including Spain, signed a manifesto on April 9, calling on the European Commission to use the European Green Deal as a road map for Europe's economic recovery post COVID-19 with an approach that, at the same time, we'll address the climate crisis or emergency. As I mentioned before, in February 2019, the ministry for environmental transition published the Spanish National Integrated Energy and Climate Plan 2021, 2030, guaranteeing the [ security ] electricity supply with the energy mix designed for the 2030 horizon. One of the main targets of the plan is by 2030 to have 74% of all electricity generated from renewable sources, which is consistent with the path towards a 100% renewable electricity sector by 2050. Red Eléctrica is already working tirelessly to achieve the targets that have been set in order to move forward in our energy transition. On one hand, the company responsible for the procedures for access and connection to the grid, we have made available to agents a remote management platform to perform these requests, simplifying and speeding up the process. As a result of this effort, in 2019, we have granted access permission to 102 gigawatts of wind and solar PV generation capacity. On the other hand, we've also been able to provide an effective response to a record number of renewables indicated in the electricity system by bringing 6,456 megawatts of new renewable generation capacity to the grid in 2019, 6,186 megawatts more than the previous year. This increase. Currently, 50% of the installed electricity generation capacity in Spain comes from renewable sources. And at the same time, in fact, the work carried out from our control center for renewable energies are [indiscernible] we've contributed to the fact that in 2019, energy generation from renewable sources represented 37.5% of all energy generated in the Spanish electricity system. All of this has contributed to a reduction in CO2 emissions reaching a rate of approximately 60% emission-free electricity generation for the second year running. As well as all of these efforts, in 2019, we've continued to make progress in the sustainable development for national transmission grid with an investment of EUR 396 million. Which has enabled us to commission 198 kilometers of electricity line and 168 substations that are now in service as well as increasing our transformer capacity by 1,335 MVAs bringing the total of the transmission grid, owned and operated by the group at the end of the year to 44,372 kilometers of electricity lines. These investments meet the need to prepare the grid for an accelerated incorporation of renewable energy without compromising the security of supply, which will be achieved basically by solving technical restrictions, improving the meshing of the grid and strengthening international and inter Island submarine interconnections. In addition, in 2019, and thanks to the implementation of sustainable efficient and safe maintenance policies, the transmission grid facilities have registered optimum reliability and service quality indicators. Reaching an availability index of 97.94%. In the Continental transmission grid and 96.87% and 98.91% in the Balearic and Canary Island grids, respectively. In order to make progress in our energy transition and achieve a target of decarbonizing the system. An efficiently functioning European electricity market is crucial. And to do that, we must have sufficient physical interconnection capacity with neighboring countries. That is why the European Union set recommendation for all these member states to achieve 10% interconnection ratio by 2020, a target which was subsequently raised to 15% by 2030. Currently, the interconnection ratio of our country with the European electricity system from which we can obtain our main support, if needed, is 2.8 of our total installed power capacity, still far from the targets. In order to come closer to these targets Red Eléctrica is working on the submarine interconnection with France with the Bay of Biscay, which will increase our electricity exchange capacity with France to 5,000 megawatts. In this context, the PNIEC incorporates in its scenarios and interconnection level of 8,000 megawatts of France, including not just this interconnection through the Bay of Biscay, but also 2 additional projects for the Pyrenees. Recognized as projects of common interest for the European Union. In addition to these projects, I would also point out the agreement that was signed in February 2019 between Spain and Morocco for the development of a third interconnection between the 2 countries. Over the next few years, we will also have to make progress in the decarbonization of our Island systems, particularly the isolated systems, where we will have to encourage an increase in energy storage capacity and a tool to be used by the system operator to prevent the waste of clean energy in off-peak periods and to provide greater security in supply to the electricity system. This is the goal of the Chira-Soria pumped-storage hydroelectric power station in Gran Canaria, which is currently in the environmental assessment phase. Thinking about the near future, one of the most relevant challenges for the company in the coming years will be the development of the planning of the electricity transmission grid for the period 2021 2026, a plan, which as you all know, is binding for Red Eléctrica. The proposal for the development of the transmission grid is key in order to achieve the targets defined by PNIEC for the electricity system in terms of decarbonization, efficiency, interconnections and sustainability. This proposal has to take into account key elements such as the security of supply and maximizing renewable generation, optimizing the use of the existing grid and making its development compatible with environmental constraints. In addition, the plan must cover other needs of the system. Including international interconnections as well as those between the Island systems or the investments needed to support the electrification of railway deployments. Recently, the second phase has been completed the study phase in which Red Eléctrica as system operator and after a technical analysis of the feasibility of all the proposals for new projects and system needs presented by the autonomous communities and other actors in the sector the initial proposal for development of the transmission grid, the ministry for environmental transition on December 3. We're now in the allegations and consolidation phase, the different proposals before the definitive authorization process can begin. Another highlight of 2019 was the approval of a new methodology for electricity transmission remuneration for the period 2020, 2025, methodology that contains incentives for availability and efficiency. In order to define the financial remuneration rate, a methodology has been established in line with best regulatory practices in the European Union, specifically the weighted average cost of capital, WACC. This is one of the new features of the new remuneration system, which we think is a step forward, guaranteeing transparency and predictability of future rates. The financial rate applied is 5.58 nominal before taxes. And as defined by the regulations, the variations in the financial remuneration rate cannot exceed 50 basis points annually. So the rate to be applied during the year 2020 will be 6.003%. And during the rest of the period, 5.58%. With regards to useful life extensions, a positive change has been made with respect to the previous model, increasing the annual maintenance fee for assets that have reached the end of the useful life of 30%. This remuneration is a recognition of the effort made by the company to keep maintaining those installations that have exceeded their useful life, but which are still in operation and serving the system. Furthermore, possibility of renewing facilities that have exceeded or about to exceed their useful life is being considered, depending on their date of commissioning, which is an additional element that we did not have before to manage those assets that have reached the end of their useful life, thus increasing the company's asset base. As for remuneration for the electricity system operator, it's important to emphasize that this is the first time and our methodology has been defined for the remuneration of this activity. And we consider it a significant step forward to create a context of legal certainty in our activities system operator. The regulatory parameters have been defined for a period of 3 years. The first regulatory period is 2020, 2022. Speaking now about our international activities. In 2019, the company has taken a first step forward with its entry into Brazil, a country with one of the largest development plans in the electricity transmission sector in Latin America. The agreement reached with the Bogotá Energy Group to jointly acquire 100% of the shares of the Brazilian company Argo Energía, which works in the management of high-voltage transmission grades. This grid, 1460 kilometers of electricity lines in Brazil is added to the 1,729 kilometers we managed in Chile and the 1,686 kilometers that Red Eléctrica manages in Peru, which have been extended this last year with the acquisition of 100% of the Carhuaquero Moyobamba line in Peru. Moving on to telecommunications. In 2019, after the acquisition of a stake of 89.68% of Hispasat's share capital, Red Eléctrica is now positioned in a very dynamic market, but satellite, which is a growth path for the group, enabling it also to consolidate its position as global operator of strategic infrastructures, managing electricity transmission and the communications networks. After the completion of the Hispasat acquisition, we are working define a new strategic plan for the company, which will strengthen and expand its current business and include the new connectivity and mobility service demands. In the fiber optic business, Reintel, for the fifth consecutive year, has grown its customer portfolio is now the largest neutral dark fibre operator in Spain, with a network of over 50,000 kilometers of dark fibre optic. Also Reintel is a driver the digitization of our society. And finally, with the aim of boosting technological innovation, generating competitive advantages and new business opportunities through the new subsidiary that was founded last year, will take advantage of the potential of the main technologies in our area in order to facilitate the energy transition and the development of telecommunications by defining, incubating and accelerating innovative initiatives with a technological base. Let me now review the main metrics of our income -- of our P&L in 2019. We've obtained very solid results. And have seen a significant strengthening of our main capital ratios. Turnover was of EUR 2.007 billion, up 3% with respect to the previous year. I should note that without the incorporation of Hispasat, growth would have been only 0.8%. This number includes the remuneration of the electricity transmission business in Spain and the regulated income related to the operation of the system. Telecommunications business, which earned EUR 175.4 million, including for the first time that linked to the satellite business during the last 3 months of the year and the income derived from our international activities, which were EUR 59.2 million. Gross operating profit, or EBITDA was EUR 1.582 billion. That's 2.8% higher than the previous year and has included EUR 33 million from Hispasat from October 3. Turn to net profit rose to EUR 718 million. That's 1.9% higher than the previous year. The effective corporate tax rate was 24.3%, in line with last year's figure. As regards our investment efforts in 2019, our investments were of EUR 1.87 billion, of which EUR 396.4 million were for the investments in the transmission activity in Spain, to EUR 126 million investments internationally and EUR 1.2 billion in telecommunications. Finally, the Board of Directors has proposed for the approval by this General Shareholders meeting, a gross dividend of EUR 1.05 per share, that's up 7% with respect to the dividend paid out in the previous year, in line with the provisions of the 2018-2022 strategic plan. As for debt, I should note that our net financial debt at December 31 was EUR 6.026 billion with optimum solvency ratios. In this regard, the net debt-to-EBITDA coverage ratio was 3.8x. And the operating funds to debt ratio was 20.8%. These ratios would have been around 3.6x and 22.4% and if we had annualized the cash flows from Hispasat. Focusing now on our financial structure, the average life of our debt is 5.2 years. And the liquidity at the end of last year was EUR 2.097 billion. With which we are able to face all maturities of debt, in the coming 3 years. If we look at the debt structure by instrument, we can state that we have what diversified debt structure with 78% of it fixed rate to maturity and with Europe dominating over other currencies. Should be noted that at the end of the year, the Standard & Poor's and Fitch credit rating agencies following the closure of the TSL regulation in Spain, confirmed the long-term rating for Red Eléctrica Corporación A- a with a stable outlook. In addition, I wish note that during 2019, we have launched many initiatives that demonstrate the company's strategic commitment with sustainability. Following the presentation of the Green Framework, Red Eléctrica made its first green bond issue for an amount of EUR 700 million to finance projects eligible under this Green Framework. A deal which has already been followed by others in 2020 was very well received by the market. Let me now spend a few minutes analyzing the performance of the strategic Plan 2014, 2019, which we announced 5 years ago, and which we're happy to say, we have now successfully completed fulfilling all the commitments that we had made with our shareholders. In this regard, we have achieved an investment level that exceeds our commitment to the market with a figure for EUR 4.8 billion. In terms of efficiency, we have made significant gains after reviewing our operation and maintenance policies and our supply and construction criteria. These achievements have been made whilst maintaining an average net debt-to-EBITDA ratio of around 3.4x, allowing us to maintain a credit rating of sovereign which is key for a company whose remuneration is linked to the cost of capital. Additionally, earnings per share in the period have grown by an average of 5.2% in this period. And we have kept our promise to the market to pay out a dividend per share which has grown 7% yearly during the same period, as previously mentioned. We have, therefore, successfully completed the strategic plan 2014, 2019 with an excellent performance and being confident of having fulfilled the commitments we made 5 years ago and with the responsibility to do so again with strategic plan 2018, 2022. Let me now move on to the keys of the strategic Plan 2018, 2022, which we presented in February last year. After 2 years into the plan, we have achieved 46% of the investment target as followed. Nationally, until 2019, investments in transmission grid in Spain reached EUR 775 million. In our international activity, we should highlight the agreement with the Energía Bogotá group to jointly acquire an equal share of 100% of the shares of the Brazilian company Argo Energía. Progress has also been made in Peru with an investment of EUR 219 million in the last 2 years. And in Chile, our investments have amounted to EUR 145 million in this period '18 '19. And finally, in the telecommunications sector, we've closed 2019 with the acquisition of 89.68% of Hispasat with an investment of EUR 933 million. These actions demonstrate that our strategic plan is being implemented around 3 strategic lines: promoting energy transition, enhancing our key strengths through international investment and becoming a benchmark operator of telecommunications infrastructure. Furthermore, all this is being done whilst maintaining operational efficiency and our financial discipline. As stated in the presentation of our 2018-2022 strategic plan, we believe that the telecommunications business is going to be key in the coming years in which the demand for reliable, flexible and quality telecommunications networks and services is going to grow exponentially. In recent years, our group has gradually positioned itself as a solar telecommunications infrastructure operator, thanks to the consolidation of our fibre optic network business and our entry into the satellite business with the acquisition of Hispasat. We are aware that the combination of these activities generate significant synergies and are an opportunity to offer and develop connectivity projects to our citizens, which will promote and energize the fight against the population and the digital divide in Spain, supporting deployment of new technologies such as 5G. With respect to the current situation and the outlook for the future, we're clearly in an extraordinary situation. And the effect that this pandemic is going to have on the world is still uncertain. Although the nature of the activities carried out by Red Eléctrica Group leads us to assume that the impact it could have on the group should not be too significant. That's allowing us, therefore, to maintain guidance and the commitments of the 2018-2022 strategic plan. As for our strategic targets, we have a target average EBITDA margin of over 76% for the period based on an efficiency policy, which will partially offset the revision of the financial remuneration rate and the capture of efficiencies in maintenance activities through the optimization and automation of processes and a gradual reduction in external operating expenses. In addition, we will consolidate our financial discipline, maintaining an average net debt-to-EBITDA ratio on average of around 4x in the period. Focusing on maintaining a credit rating level in line with our activities. As for our commitment with the sustainability of our net profit, we can say that we are on the right track, showing net profit growth of over 3% in the compound annual rate for the period of 2018, 2019. We're also committed to distributing a dividend of at least EUR 1 per share in the period 2020, 2022. Our payout policy and our shareholder remuneration policy has led to an increase in the average dividend during the 2014, 2019 strategic plan, of EUR 0.89 per share compared to the average dividend of EUR 1.01 per share in this new 2018, 2022 strategic plan. To sum up. In the coming years, we will continue to work to achieve the targets of our strategic plan. And we will continue to fulfill our mission, providing essential services to society based on criteria of safety, efficiency and sustainability. Thank you very much.

[Interpreted] Thank you very much, Roberto. The CEO has given us an excellent explanation of the milestones in Red El'séctrica performance in 2019 and so now our team has said that there aren't any questions coming in from our shareholders, so we can start with the business on the agenda for this meeting. And so in line with what's established in the regulations for the AGM votes in favor of the proposals made by the Board will be considered to be those carried out by all those shares that are present with the exception of votes against or extensions that are expressly minuted in the attendance cards or in the proxies received. And I should also remind you that the shareholders who voted remotely prior to holding this general meeting in compliance with all the procedural requirements approved by the Board of Directors and also those shareholders who are voting over the procedure established for remote attendance at this AGM will be considered as present according to the Corporate Enterprises Act, the bylaws and the regulations, the AGM and the resolutions of the Board. And so now the secretary will go through the resolutions being proposed through this AGM.

[Interpreted] I will point out that we have submitted for your approval, each item separately. Following the items that I read out in the agenda a few minutes ago. Since most shareholders present have not raised any objections, we will take all these proposals as read in full.

[Interpreted] Thank you, Rafael. In view of the information given to me by the secretary on the votes from the shareholders. I can inform you that all the proposed resolutions have been approved with sufficient majorities regarding to the nature of each of the resolutions, which were separately put to your approval. And I'd like to indicate to you that today, we will be posting to the corporate website, all the percentages of the votes in favor, against and the extensions and the levels reached for each of the proposals that have just been adopted by the AGM. So having dealt with all the business on the agenda, the notary will proceed to authorize the minutes of this general meeting, which will be available to all of you in the next few years, if you so wish -- in the next few days, if you so wish. And so now it's simply a matter of reiterating my thanks and the thanks of all the Board for your participation in this AGM, which we had hold in this virtual format due to current circumstances. I also want to thank you for your trust in the Red Eléctrica group and to pass on our desire and our commitment to see you again at the next general meeting, when we hope to see you face-to-face, to greet you personally, as we always do because that will show that we've overcome this terrible pandemic triggered by COVID-19. So in the Red Eléctrica Group, we're going to definitely work towards that end in order to reconstruct the economy as we've contributed to the transformation of our country over the last 35 years, ever since we started up as the first company in the world devoted fully to the operation of the electricity transmission system. And we've done the same in this exceptional situation, guaranteeing essential public services and continuing to ensure that the electricity and telecommunication services were up and running. And for that, we've had a fantastic team of people helping us. And we've also seen the values of Red Eléctrica Excellence, innovation, integrity, transparency, sustainability and the care of the environment at part and parcel of our management. As always, we are here to help society so that we can come out of this crisis stronger still with an economic model that moves towards more sustainable development, fighting against climate change as something, which will mainstreamed in everything we do in order to move towards a more fair and inclusive energy transition for all citizens. And as we said in the original video, we are just starting on this road, but our mission continues, and I'd like to thank all of the shareholders who've taken part in this general meeting and I'd like to thank the media who have been following the event. And I'd like to thank the professionals in Red Eléctrica, who made it possible for us to transmit this, I'd like to the interpreters, both the English and the sign language interpreters and all the staff, the CEO, the secretary and everyone. And I hereby declare this AGM of Red Eléctrica Corporación as adjourned covering the performance of 2019. [Statements in English on this transcript were spoken by an interpreter present on the live call.]