Among the big challenges we face at Iberdrola is to strengthen our finances, with the need to aim even higher in coming years. Our 2012-2014 Outlook, presented recently to the financial community in London, sets the goal of preparing the company for a new growth phase that will emerge once the present economic crisis is over.
I want to give a first-hand account of how we see the group’s current situation and where we need to go to maximize its strengths at a delicate moment for the world economy. Iberdrola has taken a giant step in the past decade with spectacular growth, multiplying its assets by five to nearly 100 billion euros and transforming itself from a major Spanish power company into a top-flight global group.
The figures bear witness to the result of our expansion strategy. International business accounted for 75% of total profits at the close of the third quarter of 2012, mainly from the UK, US, Brazil and Mexico, against only 1% in 2000.
So what is our strategy going to be from now on? Having achieved what was unimaginable just a few years ago, our goal now is to consolidate. We will strengthen our finances still further and we have set some significant goals in order to achieve this.
Firstly, we are going to moderate investments, reducing them by 30% from the 2009-2011 period to 12.3 billion euros, focusing in geographical areas and businesses that offer the most predictability and regulatory stability – in particular the networks and renewable businesses with the UK and Brazil the main destinations for investments and accounting for 70% of the total.
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We will continue with key projects such as smart grids, major distribution and transmission infrastructure connecting England and Scotland, and also the state of Maine with Canada, as well as completing our first offshore wind farm at West of Duddon Sands in the Irish Sea.
At the same time, over the three year period we will divest in assets and markets considered non-strategic, amounting to 2 billion euros, and reduce operating costs by more than 400 million.
As a result, we are looking to strengthen our balance sheet with a 6 billion euro reduction in debt which will lower gearing to around 40%, and thereby continue improving financial ratios which already give us the highest rating among top Spanish companies.
With these measures, we hope to overcome the crisis with consistent financial results, as well as maintaining the dividend we pay our 520,000 shareholders.
We have planned according to the times, and with the support of our magnificent employees we are confident of achieving the general objectives set for 2012-2014. This will enable us to continue with our sustainable growth business model and build the Iberdrola of the future.
