Iberdrola S.A (IBDRY) Q1 2026 Earnings Call Transcript
Bullish Diversified Utilities 146.15B Spain
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Iberdrola delivered solid 2025 results with double-digit net profit growth, a stronger networks backbone, and reinforced guidance for 2026–2028 supported by continued network investment and asset rotations.
⭐ Key Highlights
2025 net profit
Reported net profit rose 12% to €6,285 million; adjusted net profit rose 10.3% to €6,231 million, beating guidance.
EBITDA and networks
Adjusted EBITDA totaled €15.684 billion, up 3%, with networks delivering a 21% EBITDA rise driven by regulated asset base expansion.
Cash generation and leverage
Operating cash flow rose 8.2% to €12.811 billion; adjusted net debt fell €1.5 billion to €50.2 billion, improving FFO and leverage metrics (FFO/adjusted net debt 25.5%, net debt/EBITDA 3.0x).
Dividends and capital allocation
Board proposed total dividend of €0.68 per share for 2025; total dividend up 12% supported by asset rotation and capital increase.
Guidance and growth trajectory
2026 adjusted net profit guidance >€6.6 billion; 2028 guidance >€7.6 billion, underpinned by ongoing networks investment, transmission growth, and electrification trends.
✔Positive Signals
- Adjusted net profit grew 10.3% YoY and beating guidance.
- Net debt reduced by €1.5 billion, with improved FFO/adjusted net debt ratio (25.5%).
- Networks EBITDA up 21% driven by regulated asset base expansion and new tariffs/inflows.
- Capital discipline with modest opex growth and strong cash generation supporting dividend and deleveraging.
- Guidance raised for 2026 and 2028, reflecting confidence in networks and electrification opportunities.
✖Negative Signals
- Renewable power and customer EBITDA fell 10% due to lower market prices and reinforced operation in Spain, partially offset by capacity additions.
- Regulatory headwinds in Spain and some European regions require adaptation of CapEx and OpEx plans.
- Noncash charges and capital gains adjustments created some dispersion between reported and adjusted metrics.
📊Financial Results
- Reported net profit €6,285 million, up 12% YoY.
- Adjusted net profit €6,231 million, up 10.3% YoY and above guidance.
- Adjusted EBITDA €15.684 billion, up 3%; Networks EBITDA €7.794 billion, up 21%; Iberia EBITDA €3.921 billion, down 16.8% owing to margin and ancillary costs.
- Operating cash flow €12.811 billion, up 8.2%; net debt €50.2 billion, down €1.5 billion YoY.
- RAB increased to €51 billion, +12% YoY; adjusted net debt/EBITDA 3.0x; FFO/adjusted net debt 25.5%.
🔮Future Guidance
- 2026 adjusted net profit guidance >€6.6 billion, implying ~€1 billion of additional net profit over the next two years.
- 2028 adjusted net profit target >€7.6 billion, with plan to accelerate electrification and transmission investments across key markets (UK, US, Australia, Brazil).
- Capital allocation remains oriented toward networks growth and asset rotation; continued ability to raise financing under favorable terms and maintain BBB+/Baa1 rating.
💡Interesting Insights
- 81% of group EBITDA now comes from A-rate countries, underscoring geographic diversification and exposure to regulated networks.
- Transmission is emerging as a major growth vector, with RIIO-T3 in the UK potentially quadrupling transmission capex over the next five years.
- Data centers are a growing driver via PPAs, with Iberdrola already delivering over 12 TWh/year in PPAs and 150 GWh signed in the current cycle.
Detailed Analysis
AI-generated summary of Iberdrola S.A earnings call transcript.
Iberdrola posted 2025 results highlighting a resilient earnings profile driven by networks with a 21% EBITDA gain and an 8.2% rise in operating cash flow, enabling a €1.5 billion reduction in net debt and a stronger balance sheet. Adjusted net profit rose about 10%, while reported net profit climbed 12%, aided by favorable FX and strategic adjustments. The company expanded its regulated asset base to around €51 billion (+12% year over year) and advanced its growth through 2.7 GW of new capacity in operation and 4.7 GW under construction, with a robust pipeline for 2028. Management reaffirmed a capital-light approach to distributions yet committed to a €0.68 per-share dividend for 2025 and higher future payouts. The group signaled a multi-year growth trajectory anchored in networks, with RIIO-T3 in the UK and new interconnections in the US and Australia, while recognizing regulatory and market headwinds in Spain and other regions. Guidance was provided for >€6.6 billion in adjusted net profit for 2026 and >€7.6 billion for 2028, reflecting confidence in continued execution and the electrification cycle, though the pace of certain nonrecurring items and regulatory changes remains a key risk to watch.
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