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IBERDROLA: FY2019 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'19 vs. 4Q'18 Results
EBITDA: € 2.605 Bn (-0.9% vs. -4.0% BS(e) and -4.4% consensus);
EBIT: € 1.388 Bn (-13.4% vs. -5.7% BS(e) and -8.3% consensus);
Net Profit: € 889.6 M (-3.6% vs. -16.3% BS(e) and -11.0% consensus);
FY2019 vs. FY2018 Results
EBITDA: € 10.104 Bn (+8.1% vs. +7.2% BS(e) and +7.1% consensus);
EBIT: € 5.877 Bn (+8.0% vs. +10.3% BS(e) and +9.6% consensus);
Net Profit: € 3.406 Bn (+13.0% vs. +9.1% BS(e) and +10.7% consensus);

The 4Q’19 results came in above expectations in EBITDA (+3% on the quarter), partially thanks to the Others/Corporation headline (€ 68 M above expectations), below in EBIT due to higher amortisation levels and above in Net Profit, favoured by capital gains and a very low tax rate (2% vs. 24% as of 9M’19). IBE has registered € 3.25 Bn of Net Profit, which grew +8% vs. FY2018 vs. +13% growth in Net Profit.
By divisions: (i) Networks (53% EBITDA) in line, growing +7% in EBITDA, with Brazil standing out as expected (10% EBITDA/+24% growth); (ii) Generation/commercialisation below expectations (22% EBITDA / +21% growth) thanks mainly to Spain (11% / +56% vs. 60% expected) and (iii) Renewables slightly above (26% EBITDA / -2% drop vs. -6% expected) especially in Spain (10% EBITDA / -20% drop vs. -31% expected).
Record investment figure: € 8.15 Bn, +32% vs. FY2018, which means € 37.76 Bn of NFD (+6% vs. 9M’19), bringing debt to levels of 3.7x EBITDA.
IBE has proposed a DPS’19 of € 0.40/sh., in line with expectations (+13%; 3.7% yield).
For 2020, IBE expects high single-digit growth in Net Profit vs. our estimate of +8% and +7% consensus.
We expect a slightly positive market reception. There will be a conference call at 9:30 (CET). We do not expect the company to provide a guidance beyond 2020 until the CMD (to be held in May). BUY. Target Price: Under Revision.