“IBERDROLA COMMITTED TO ROLE AS LOCOMOTIVE FOR ECONOMIC ACTIVITY”, Iberdrola
Release Date: 2009-03-23
Chairman Ignacio Galán tells Shareholders Meeting in Bilbao.
The Board of Directors won overwhelming support from shareholders who voted around 98% in favour of agenda items, and with a record high quorum of 78%
• “Electricity groups have a crucial role in overcoming the crisis, acting as engines for growth across the economy with major investments that create jobs and provide an
essential link to productive activity,” said Galán
• Galán saw IBERDROLA group results last year as “fruit of a long-term sustainable growth strategy, made reality through investments of €50 billion in the past eight years”
“In the current situation, IBERDROLA stands by its commitment to be locomotive for the economy, at the same time lending continuity to
the strategic vision initiated eight years ago,” Chairman Ignacio Galán said during an address today to the General Shareholders Meeting
held at the Euskalduna Palace in Bilbao.
Galán said “electricity groups have a crucial role in overcoming the crisis, acting as engines for growth across the economy with major
investments that create jobs and by providing an essential link to productive activity,” he said.
He said it was “essential to support sectors with potential to drive the economy, such as those involved in transport, telecommunications
and energy infrastructure”. He urged structural reforms to improve productivity and economic growth potential over the long term.”
“Our country now faces a big opportunity to transform its economic model” with the goal of achieving “a more competitive, more open
and liberalised economy, more orientated towards innovation and foreign markets,” said Galán. “A model that creates value bottom up,
from the real economy, with long-term industrial projects and not founded on speculative operations that seek only short-term returns.”
For Galán, “only in this way will we have large business groups operating inside and outside Spain. In a country like ours, the eighth largest economy in the world, we must have large global companies that can drive our industrial framework and push it into international markets.”
BACKING FROM SHAREHOLDERS
Shareholders voted around 98% in favour of the agenda items for the Meeting, which registered a record high quorum of 78%. The IBERDROLA chairman told them that last year “saw significant and solid growth in profits, despite the
complex international economic panorama.
He said “this growth is fruit of a long-term strategic vision, made reality through
investments of €50 billion in the past eight years,” which have enabled IBERDROLA to close the year with more than 43,300 megawatts (MW) in installed capacity and 28 million customers.
“The sustainable growth strategy that we began in 2001 has enabled us to rise to be one of the world’s top five electricity companies from 19th place in the year 2000, and one of the top three companies on the IBEX 35 stock index by
market capitalization. Following the two stages relating to the 2001-2006 Strategic Plan and the 2007-2010 period, we now face a third phase in which we are cementing the foundations of IBERDROLA’s future,” he said.
He said this phase “will be based on new hydroelectric plants, continued growth
in wind power and the possible development of new nuclear plants.” The company, which has already initiated construction of 3,000 MW in new hydro projects in Spain, Brazil and Portugal, has more than 20,000 MW in wind projects in various stages of development in the United States and has closed an agreement with GDF-Suez and Scottish and Southern to participate in a new
nuclear build programme in the United Kingdom.
Galán said this focus responds to current global economic circumstances, as well as to political and social factors. “One the one hand, the economic crisis adds to the need to improve efficiency, and on the other, gas supply problems
in Europe, deriving from conflicts abroad, oblige us to reduce our external dependence. This is a task that should go hand in hand with the increasing social awareness surrounding sustainability and environmental protection.”
He emphasized the “significant impulse to renewable energy development throughout the world represented by two energy policy milestones in two markets where IBERDROLA operates: the Energy Bill and Stimulus Bill recently introduced in the United States by the Obama administration and approval of
the Green Package by the European Union.”
Galán said that “in the Spanish context, we expect a final solution soon of the structural problem caused by the tariff deficit, including a state guarantee for securitization of the deficits yet to be recovered. As a result of this, the current regulatory uncertainties will be largely resolved, and the government has committed to eliminating this burden on future generations.”
For the IBERDROLA chairman, “the strategy defined by our company, based on electricity production through more efficient and environmentally-friendly technology, puts us in excellent shape to continue growing in these markets.”
He said “the IBERDROLA model is very different to that of the rest of the European electricity sector. Our main competitors are characterised by a much more reduced weighting of regulated business, a very small presence in renewables and, in almost all cases, a lightly-diversified production mix. These factors undoubtedly give us an edge in the current economic situation and
stability to face the future.”
HISTORIC RESULTS
Galán said that 2008 results, the best in IBERDROLA’s history, reflect the positive development of company business, “excellent, because significant growth in new business has now added to that of traditional activities.”
IBERDROLA last year produced more than 141,000 GWh, a rise of 14% over the previous year, with energy distributed to its more than 28 million customers rising 13% to 182,000 GWh. Service quality improved notably, by 25% in
Spain, 11% in the United Kingdom, 6% in Latin America and 7% in the United States.
“I would like to highlight the quality of the company’s generation portfolio, characterised by low emission levels and a reduced variable cost,” he said.
Emission-free technology now represents 52% of generating capacity. A major factor in this has been the increase in wind power, which now makes up 21% of the total and has become the second most important technology in the group
after hydroelectricity, he added.
This increase in the principle operating magnitudes of the Group has been reflected in results, which improved significantly last year.
Gross operating profit rose 15.8% to more than €6.4 billion, “reflecting the growth and
diversification undertaken by the group in recent years.” Renewables and international business accounted for 57% of Ebitda and provided 99% of the growth in operating profit.
Galán pointed in particular to the importance both of the integration of U.S. company Energy East in the fourth quarter, thereby completing the planned non-organic growth, as well as the contribution of ScottishPower, which has
become one of the principle growth vectors in the group.
IBERDROLA INGENIERÍA, A TECHNOLOGY HUB
José Luis San Pedro, Operations Director Iberia and Latin America, emphasized the importance of Iberdrola Ingeniería y Construcción during remarks to the meeting. He said the subsidiary is the group’s technology hub, the force behind
the growth in renewable energy as well as of the construction of hydroelectric and thermal projects and network infrastructure.
He described this subsidiary as a spearhead for the group’s international expansion, with projects in more than 25 countries. “With its project portfolio of €2.3 billion, 81% of which is outside Spain, it is a good example of the Group’s
international expansion and its more than 2,500 employees of 48 nationalities are a major distinguishing factor for the Company.”
Last year’s net profit of €2.86 billion, a rise of 21.5%, and the 21.3% increase in earnings per share to €0.57, are the basis for shareholders approving a total dividend of €0.332 per share, a rise of 20%. This figure includes an interim
dividend of €0.143 paid last January, a final dividend of €0.184 to be paid in July and a premium for attending the AGM of €0.005.
Galán said that despite the stock market collapse that has affected everyone, the Company’s shares have performed better than its reference indices. Since 2001, IBERDROLA has doubled its share value compared to a rise of only 0.9%
for the IBEX 35, one of 19% for European electricity companies, and a drop of 49% for the Euro Stoxx 50.
Thanking the hard work, effort and dedication of IBERDROLA’s employees, “the true driving force behind this company and of its achievements”, the Chairman paid tribute to the current collective contract in place until 2010 which has
placed the company in the vanguard of reconciling family and work life, while
simultaneously improving productivity.
During the Shareholders Meeting, Galán outlined plans for this year. “With the integration of Energy East and ScottishPower now completed, we can focus on consolidating our position in the United States and the UK, with investments set
at a little over €4.2 billion, in line with internally generated resources, while continuing with efficiency and cost reduction programmes.”
He said IBERDROLA Renovables will continue to be the main driver of growth in the Group, with investments accounting for half of the total and with a priority allocation to Europe and the United States. He said network businesses are
expected to improve their contribution to results with the consolidation of Energy East in all of 2009 and regulatory improvements under way.
CORPORATE GOVERNANCE
Galán reviewed progress in corporate governance, an area in which he said
“IBERDROLA has been and continues to be an example, both for its commitment to best international practices, as well as to the principles of business ethics and transparency in all its activities.”
Last year, as well as early in 2009, the Group has continued to incorporate best practices with modification of the Board of Directors by-laws, the Company bylaws and those governing the General Shareholders Meeting.
Among other norms and internal policies to have been approved, Galán noted the Policy for Shareholder Relations, Code of Professional Conduct, Code of Incompatible Activities, Corporate Policy on Credit Risk, Fraud Policy, Knowledge Management Policy and the Policy on Conciliation and Equal Opportunities.
The Chairman also made special mention of the IBERDROLA Foundation, “which has recently strengthened its Trustees and organization, in line with more ambitious objectives that befit the company’s global dimension”.
| Type: | NORMAL |
| Company: | Iberdrola |
| Country: | Spain |
| Url: | http://www.iberdrola.es/webibd/gc/prod/en/comunicacion/notasprensa/090320_NP_01_JGA09_en.pdf |