Acciona, S.A. (ANE) Earnings Call Transcript

Thank you very much for attending the results presentation of 2019, which you have probably been seeing in our release this morning and last night with the results. Let me start by reviewing our performance relative to the financial targets we set ourselves a year ago. I am pleased to announce that we have met or exceeded our own guidance. As you can see, reported EBITDA was up 9%, better than the flat to mid-single-digit growth outlook. On a like-for-like basis, our EBITDA grew by 13%, exceeding our single -- high single-digit growth guidance. Regarding the ordinary profit, we said double-digit growth. The real -- the result was 60% growth. We normally do not interpret 60% as double digit, but it's within the guidance -- that is guidance, anyway. For dividends, the Board has proposed -- that was ordinary, I must clarify. Everyone is aware of that ordinary profit. As for dividends, the Board has proposed a dividend of EUR 3.85, which implies a 10% growth, in line with our guidance of double-digit growth. Regarding CapEx, we have invested a total of EUR 1.2 billion relative to our target of EUR 1 billion, taking advantage of some additional attractive opportunities and setting the pace for future growth in the coming years. Finally, we have maintained our net debt-to-EBITDA ratio below 4 as we guided, which we believe to be a prudent leverage given our long-dated visible cash flows that derive from our large asset fleet and our portfolio of O&M contracts. I always like to remind that this debt level includes a significant portion of investment that is not yet operative work in progress, which gives us an additional buffer in terms of what the ratio -- in terms of ratio, should we consider only the performing or the operating assets -- operating investments. Now I'd like to highlight some of the key events of last year. From my view, on the Energy side, the acceleration of the Spanish renewable energy sector brings significant investment opportunities that contribute to our 13 gigawatt global pipeline, I will develop on that later, while our total installed renewable energy capacity broke through the 10 gigawatt mark. In Infrastructures, 2019 was a successful year as we executed most of our large energy -- EPC contracts. As you may remember, we have 5 major contracts, 4 of which have been -- are close to completion. We also achieved record backlog levels, and I think it's worth mentioning that we consolidated our leadership position in reverse osmosis in the Water sector. In Australia, we acquired, I would say somewhat opportunistically, a portfolio of projects from Lendlease Engineering, which will allow us to accelerate our plan in the region, and which becomes -- the region becoming the largest -- ACCIONA's largest international market for construction and other infrastructures. I'd say, all in all, I would say it will become our largest international market. With respect to ATLL -- on ATLL, whole ATLL -- and the early -- we've been discussing that for like, 4 years now, the early termination of the concession. We've managed to monetize our litigation while retaining significant upside. In the real estate activity, we continue to see very attractive opportunities, particularly in partnerships with global financial investors, who often lack the footprint, the local footprint or the greenfield skills and the execution capabilities, and to whom we are a very useful partner as we help them develop their own investment objectives. In Bestinver, we reinforced our position as the leading independent financial firm -- services firm in Spain, with the goal to continue to widen our range of products and expand our client base. But above all, I would like to mention the consolidation of the SMART infrastructure sector, infrastructure in the wide sense of the word, so including all sorts of infrastructure, naturally, energy also. So when I say SMART, I'm using it as an acronym for the infrastructures which contribute to sustainability, mitigation, adaptation, resilience and transformation. SMART infrastructures will enable the transition to a low-carbon economy and will contribute hopefully to solve some of humanity's most daunting challenges: waste, mobility, water, housing, social infrastructure and all other needs of society. This trend is increasingly resonating with investors who growingly see ESG, which would be a proxy not only as a defensive strategy but also, probably more even so, as a growth opportunity. We are in a unique position for grasping these opportunities as -- possibly as being -- as a sign of the evolution of our stock lately. And by all means, our record CapEx this year of EUR 1.2 billion, 10 gigawatts of installed capacity and an EPC backlog of EUR 8 billion. That is all, I think, signs of a healthy moment for our strategy. Our backlog of EUR 8 billion, we'll see later, will go up to EUR 11.1 billion, I think, if very advanced. Contracts. Finally crystallized, such as the Line 6 in São Paulo and the finalization of the Lendlease acquisition. Taking a closer look at growth potential embedded in ACCIONA's businesses. It is worth mentioning that we are expecting as a step change in the rate at which we add new renewable energy capacity. I believe we are entering a new phase within the energy transition in substitution markets as well as in addition markets. You all are aware the substitution market will be those who have most of their generation necessities covered and the addition market would be those who need to add new energy, new capacity to cover demand. The treatment of the 2 types of market is entirely different as one probably entails -- the first one mostly entails retirement of legacy generation capacity and the other one is -- can take the leapfrog and jump on to third-generation generation in a faster pace. The energy transition is moved -- is being moved among other reasons by sheer competitiveness of wind and solar and, of course, by policy efforts to curve climate change. This translates into a major window of opportunity of, I'd say, at least 10 years, for which we are in a very privileged position. We have significant advantages, such as geographical reach, agility, experience, technical capacity, operating excellence and broadly recognized commitment to decarbonization and social progress of the places where we are lucky to work in. We will continue to focus on less-crowded, non-commoditized segments of the market. In this context, we expect to double the pace of capacity additions, so over the next 5 years, to around 1 gigawatt per annum. Say, to be on the safe side, 0.8 gigawatts to 1 gigawatt per annum. This translates into a projection of about 5 gigawatts of incremental capacity by 2024, split 50-50 approximately between wind and solar, reaching by then 15 gigawatts of total capacity and entailing a CapEx of approximately EUR 4 billion. In terms of returns, we are targeting an excess of 200 basis points above the risk-adjusted weighted average cost of capital for each particular project. And we believe that is sustainable. This growth is supported by 13 gigawatts of pipeline, in which 9 gigawatts are in an advanced development stage and 4 at an early stage. Our improved visibility is driven by the acceleration of our development pipeline in the Australian market. Our success in PPAs in Latin America, Mexico and Chile, mostly, the Tenaska solar PV pipeline in the U.S., and actually the re-emergence of Spain as a growth market. Having said that, as has always been the case, our overriding priority will continue to be value creation together with prudent leverage and not capacity growth in itself. Hence, the actual level of capacity additions will depend on market dynamics, as always does in our core regions, naturally, the competitive environment return expectations and a competitive mechanism of capital allocation within ACCIONA. Turning to growth in the EPC business. I have already referred to the growing demand for SMART infrastructures: sustainable, mitigating, adaptive, resilient and transforming infrastructures and a long -- our strong positioning in this market. Greenfield development is the DNA of ACCIONA and has been a profitable skill for over 100 years of history. However, not only it is a profitable business when carefully managed, that is key, despite its undisputable volatility, believe us, we know that. It is also a unique tool for generation of investment opportunities in the infrastructure market, which, as you all know, is a very scarce capability, very demanded capability nowadays. The EPC market is undoubtedly very competitive. However, I sense positive signals of rebalancing of risks in the activity, given the lower number of players, the clients increasingly realizing that contract structure needs to improve in order to deliver satisfactory long-term outcomes for taxpayers and citizens. Our current construction and water EPC backlog stands at EUR 8 billion, close to peak levels. And most likely, we will see significant further growth with Line 6 projects in São Paulo and the Lendlease Engineering pipeline acquisition, once they fulfill their respective conditions presented. We have a large balanced and well-diversified portfolio of contracts, which give us excellent revenue visibility for the next 24 months, most likely 36 months if we personalize those 2 contracts that I mentioned. And I believe the nature -- the diversified nature of this portfolio, in most cases, the slightly less size of contract as the past, say, 5 years, give it a better risk profile. In the context of the acceleration of our growth for the next year, we are envisaging a total CapEx of about EUR 1.5 billion, of which 2/3 will be directed to growing our renewable energy business. Additionally, we will invest in Line 6 and other concessions, we will pay a portion of the deferred consideration for the Lendlease pipeline, and we will grow our shared mobility business. In real estate, we will continue to invest to deliver the current pipeline and aim to further development of our strategic partnerships with global financial investors and as a key local partner. In order to capture the growing flow of opportunities, at the same time maintain prudent leverage, we will accelerate capital recycling and aim to rotate EUR 500 million -- about EUR 500 million worth of mature yielding assets. I'd like now to draw your attention to the recently published Union -- European Union taxonomy on low carbon activities. The taxonomy will become a key driver for investment decisions and capital allocation. I think the market is already starting to wake up to it, and in fact, it is expected to become compulsory in the Union by 2022. In addition, there's a growing expectations that other countries in the economic regions outside the Union will link themselves to this taxonomy. As you are aware, the taxonomy is a classification of industrial activities that make significant or substantial, all contribution, at least, positive contribution, that is, to climate change mitigation and adaptation. The Union has designed it as a critical tool to help direct investment flows to sectors that are instrumental to achieving its environmental and climate targets. At ACCIONA, we are proud to lead the early adoption of the taxonomy by undertaking -- we have undertaken and completed an auditor-verified analysis of our own alignment to the taxonomy. As should be expected after decades of strategic focus on sustainability, the result of such analysis is that we are firmly placed at the core of the low carbon transition, with 83% of our EBITDA and 94% of our CapEx falling within the taxonomy standards. It is a clear signal to our clients, capital provided, and other ESG-conscious stakeholders that the majority of our activities contribute to the transformation of society towards a more sustainable model. These are activities poised for a strong growth and less exposed to transition disruption risk. The taxonomy underscores ACCIONA's sustainable solution business models. I believe our strategy is providing successful -- is proving, sorry, successful and the market after today -- I don't know what's going to happen today, but anyway -- increasingly recognizing our strengths and growth potential. And as you already probably know, our total shareholder return over the last 5 years stands at 18% compounded. And that is significant compared to the index to IBEX, which has a compounded growth of 2%. That would place us among the top 4, 5 total shareholder return in the index. Before handing over to Jose Angel Tejero, Group CFO, let me share our guidance for 2020, mostly what you came here for today. EBITDA on a like-for-like basis, we expect flat to single-digit growth, with energy growing and infrastructure reducing its contribution, mainly because of the nonrecurrence of the 2019 Sydney Light Rail settlement. We expect high single-digit growth in ordinary net profit, and we target moderate sustainable growth in the dividend. As I have already mentioned, total CapEx net -- as net of asset rotation is expected to be at around EUR 1 billion. And we naturally remain committed to the leverage ratio of below 4. As you can see, and assuming recent macroeconomic health [Foreign Language] don't derail these plans, we have what appears to be another strong year ahead of us while continuing to lay for the basis for solid growth in the future. Thank you for your attention. After José Angel's intervention, we will take questions. Thank you very much.

Thank you, José Manuel. I would like to start reviewing the key financial metrics of the group. Revenues reached EUR 7.2 billion. Energy revenues are down almost 10% on lower EPC revenues for third parties as well as lower hydro output and the disposal of the thermal solar fleet in Spain. Infrastructure revenues were flattish, and the other business fell as a result of the sale of Trasmediterránea last year -- the year before, I'm sorry. When looking at EBITDA, the comparison with the previous year is affected by significant changes in perimeter and the first implementation of IFRS 16 decide an increasing EBITDA by EUR 93 million. The perimeter changes are related to the early termination of ATLL early in 2019 and the disposal during 2018 of the thermal solar business in Spain as well as Trasmediterránea and Rodovia do Aço concession in Brazil. All in all, reported EBITDA grew by 9%, while, on a like-for-like basis, growth rate is higher at 13.2%. Energy grew its EBITDA by 13% like-for-like, principally our high investment activity, partially offset by lower output in Spain. Infrastructure EBITDA grew 2.9%, and 18% on a like-for-like basis, thanks to the settlement of Sydney, accelerating water EPC activity, while the maturing big 5 construction contracts contributed to lower levels of production. Reported earnings before tax and net profit are up by 7%, reflected EBITDA growth, lower amortization and financial charges and better equity accounted results. And despite the significant capital gains in excess of EUR 100 million last year related to the disposals. In fact, excluding these capital gains, net income is up by 60%, which is, in my view, an excellent result. In terms of CapEx for the year, it amounted to EUR 1.2 billion relative to EUR 1 billion total investment last year. Asset disposals during year '19 were not significant in contrast to the last one. Net financial debt before IFRS adjustment grew to EUR 4.9 billion for -- from EUR 4.3 billion the year before. IFRS 16 adds EUR 402 million to the debt figure so that the reported net debt figure amounts to EUR 5.3 billion. Net debt to EBITDA, including IFRS adjustment, which is slightly detrimental to the ratio, stands at 3.92 and remains consistent with our leverage targets. Looking at ACCIONA's business terms of risk profile and capital intensity, you can see that the company's EBITDA and capital employed continued to be dominated by long-term cash flow generation assets with a very strong component of contracted revenues. In '19, the weight of long-term asset business at EBITDA level stood at close to 70% of the total. It fell relatively to '18, given the early termination of ATLL concession, but also the relative contribution of the greenfield development activities of ACCIONA, with a positive contribution of the settlement in Sydney. Capital employed, excluding equity accounted investment, reached EUR 8 billion, reflecting high investment in energy and concessions, in particular. And the long-term assets continue to represent more than 90% of the total. Looking at the detail of our investment for growth in '19, CapEx for new renewal energy capacity amounted to EUR 509 million. Energy CapEx corresponds to projects in Chile, U.S., Mexico and, to a lesser extent, Ukraine. As of December '19, we had 835 megawatts under construction relative to 685 megawatts as of September '19. In addition, we subscribed the Nordex capital increase for EUR 99 million. With regards to infrastructure, investment reached EUR 372 million, with the biggest item being the EUR 281 million for the Sydney concession, followed by the equipment in construction business and also the investment in our growing mobility business in Spain. Within concessions, we sold our stake in Spanish road concession for EUR 20 million. The net investment real estate business amounted to EUR 210 million, including the one-off landmark Mesena project in Madrid, which will be ACCIONA's future headquarters. In terms of cash flows and net debt evolution during the year, operating cash flow amounted to EUR 899 million relative to EUR 665 million in the previous year, thanks to the higher EBITDA, lower net debt interest paid and better working capital. Net investment of EUR 1.2 billion in '19 compares to a positive inflow in '18 of EUR 398 million, including treasury shares, driven by the EUR 1.4 billion of divestments. The movement of net debt also reflects the payment of the dividend, which amounted to EUR 192 million relative to EUR 172 million the year before. All in all, operating cash flow cover around 60% of the combination of investment and dividends, and our net debt-to-EBITDA ratio stays below 4 as already mentioned. Note, however, that the net debt related to work in process not generating EBITDA has increased to just over EUR 900 million relative to around EUR 600 million the year ago. Excluding this work in process, net debt-to-EBITDA ratio would be at 3.3x. With respect to the individual components of net debt as of December '19, the structure is largely unchanged. Perhaps mention that residual project debt continues to fall in both relative and absolute terms. It represented 25% of gross debt in 2018 and now stands at 20%. I would like to note that those corporate debt and the cash position as of year-end are distorted by the requirement we had to set aside EUR 708 million cash deposit as part of the regulatory requirements to demonstrate certainty of funds in the context of the Nordex tender offer. This cash deposit was canceled in early January within the U.S. portion of our 1.44 backup-only trade facility. Moving on to the key indicators of our debt and liquidity position. We present here the figures adjusted to exclude the Nordex tender offer distorting effect. Here, I would like to draw your attention on our average cost of debt that continues to decline. We continuously strive to further strengthen also our funding structure to fit the needs of our international footprint, increasing our access to alternative pools of capital with more efficient cash management and lower borrowing costs and a more resilient model overall. For this year in 2019, over and above of our permitting activity in the commercial paper, ENT and bilateral loan markets, we have closed 1.3 worth of adopt refinancing transactions, including AUD 400 million, EUR 677 million ASA-linked syndicated loan, and 155 initial [indiscernible] in the German market, among others. The average terms of this transaction has been 5 years. 2020 is a year of limited -- is a year with a limited underlying debt maturities under our constant rolling of commercial paper, bilateral bank loans and credit lines and the annual maturities of the project debt there ourselves with project cash flows. We will continue to take advantage of our very strong ESG credential and expect to continue to move between 60% to 70% range of the term in terms of floating versus fixed in terms of our total exposure. Turning now to the performance of each of the individual businesses in more detail. Let me start with the Energy division -- Energy business. Revenues fell by 9.5%, mostly due to the fact that last year, we had significant EPC revenues related to Puerto Libertad PV plan in Mexico, of which we own 50%, as well as the sale of the Spanish thermal solar portfolio and lower hydro output. EBITDA grew to close -- by close to 14% to EUR 845 million and by 13% on a like-for-like basis. The CSP sale in the earlier part of '18 impacted the comparison by a negative EUR 29 million, while the adoption of IFRS 16 added EUR 39 million. The acceleration in the rate of new capacity installation also has allowed for the absorption of the development costs. The Spanish Generation business fell by close to 2% in EBITDA terms to EUR 433 million, with the sale of CSP and lower output as the largest drivers. Spanish Generation output fell by 5% relative to the previous year and came almost 3.5% below what we consider to be a normal year. Hydro output, in particular, was 17% lower than the 2.1 terawatts-hour average year, and following a very good year in 2018, where we generated almost 2.6 terawatts-hour. In terms of power prices in Spain during '19, the average spot price fell by 17% in respect to 2019, down to 47.7 megawatts-hour, which were -- I'm sorry, this is the decline in market prices, did not have a major impact in ACCIONA. We were fully hedged in 2019 that did not allow us to capture the sudden upward revision in power prices from Espino was driven by carbon prices. However, on the contrary, in '19, we hedged close to 2 terawatts-hour, equivalent to 40% of our nonregulated volumes, at prices close to EUR 58 megawatt-hour, significantly above the EUR 48 megawatt-hours average price, translating into a pickup in our average price release. All in all, and taking into account the regulatory incentives, our average price for the Spanish fleet has stayed flat at around EUR 73 megawatt hour if we exclude the distorting impact of the disposal of the thermal solar assets in Spain last year. Looking at the international generation assets, EBITDA increased by 14% to EUR 435 million, thanks to new capacity with EUR 32 million of incremental EBITDA. In terms of output for the existing international fleet, 2019 has been a year of low results, as was also the case in '18. Excluding the contribution of the new assets, international output was 9% below our expectations, with Mexico being particularly weak. In terms of 2020 expectations, as José Manuel mentioned, we expect growth in EBITDA in Energy business. This should be driven by the contribution from new assets, better output from existing assets, compensated in part by the impact of the periodic regulatory update in Spain. We could attract around EUR 50 million of the current proposed calculation -- or we could attract around EUR 50 million and lower prices in Spain. The pool price in Spain 2020 on the basis of actual performance is expected to be in the low-40s. In terms of our hedging position, we have, so far, have hedged around 1.7 terawatts per hour, equivalent to close 40% of our nonregulated exposures at prices of around EUR 53 megawatt-hour. In terms of new energy capacity, in addition to the 471 megawatts erected in 2019, as of December, we have 835 megawatts under construction. And there are another 301 megawatts of already approved projects that will start construction during the current financial year, giving us 1.1 gigawatts of absolute short-term visibility. The majority of these new assets correspond to our current big 4 markets of U.S., Mexico, Chile and Australia, and we will add our first 2 projects within the new wave of investment of the -- in the Spanish market. Moving briefly to infrastructure as most of the key developments have been already addressed, revenues were broadly flat and EBITDA grew by 2.9%. On a like-for-like basis, EBITDA growth was 18%, thanks to the Sydney settlement and accelerating water EPC activity, while the maturing big 5 construction contracts contributed lower levels of production. These big 5 projects represented between 40% to 45% of construction revenues for the period '17 and '18. As these projects mature, the weight in '19 was closer to 30% in terms of revenues. The water business was affected by the early termination of ATLL, which contributed EUR 94 million of EBITDA in 2018, and only EUR 9 million this year. Ex ATLL, the water business EBITDA grew from EUR 19 million to EUR 57 million. With respect to the infrastructure backlog, the total backlog stands at EUR 11.4 billion, out of which EUR 8 billion corresponds to construction and water EPC. New awards in '19 reached a record level of EUR 5.7 billion. Key projects being a waste-to-energy plant in the U.K. for almost EUR 500 million, a desalination plant in Saudi Arabia for EUR 400 million, a bridge replacement project in Canada for almost EUR 350 million and another rail project in Norway for another EUR 300 million. We generate anywhere between 100 and 200 and 50 contracts per year in construction alone that allows us to be well diversified in terms of contract size. Turning into other activities of the group. Property development EBITDA grew from EUR 9 million to EUR 20 million. We delivered more than 500 units this year. This activity remain net investment phase, although deliveries are gradually starting to pick up. The gross asset value stood at EUR 1.1 billion, the vast majority of it, which will be generating revenues over the next 5 years. And finally, Bestinver reported EBITDA of EUR 62 million, which is EUR 10 million lower than the previous year on a slightly lower average funds under management at different product mix. Funds at year-end increased from EU 5.5 billion to EUR 6.8 billion, mostly on performance, and also with the addition of Fidentiis funds under management following the completion of the transaction in Q4. And with that, we conclude the presentation. And José Manuel, if you would like, we are ready to start.

Yes. Let's take questions. We will start with the floor. Is that the case? Is there microphone, please? No microphone? Yes, coming. We could have 2 microphones. [Foreign Language] Please, I ask -- the floor is going to be easier. But when we get the questions on air, it is -- it becomes somewhat difficult to understand. So kindly, we try to be as clear and loud and as slow as possible, as reasonably as possible.

This is Isidoro from BBVA. I just have 3 questions. First, on the guidance for 2020. Just to clarify the base of the net ordinary profit, if it is EUR 352 million for the high single-digit growth? And then on the assumptions for power prices, we're clear on the hedging, but what are your real assumptions embedded for power prices in 2020, considering the regulatory business, considering 55 -- most of EUR 55 per megawatt hour for the regulated activities? Then on your Energy division, the 2020, '24 growth plans, how much of the 5 gigawatts you expect to install are based in Spain? And if so, how much of them would be through PPAs? What is your exposure to merchant? If you could clarify or give a little more visibility. And finally, on the asset rotation, the press has speculated on the possibility of selling a -- setting up facility services. I was just wondering whether your EUR 500 million of asset disposals, you would also consider potentially -- disposals at the Energy division. I mean, there seems to be huge interest, not only for installed capacity, but potentially for pipeline as other players are pursuing?

I would also like to ask to limit your number of questions to 3 because, I mean, it's not only -- it takes -- we will manage to address more questions, but also because it's difficult for us to retain answers for that. We will try to answer all of yours, however. And talking about -- starting from the last. No, the answer is no. We are conducting analysis on what -- how to -- what's the strategy in services. And that's all. Nothing firm to be explained yet. As for Spanish, Spain, 2024 expected contribution to the 5 gig.

25 for [indiscernible]

Put your speaker up, please.

I'm sorry. 25% of the growth should be in Spain. It will depend on the next auctions and the next rules, that we are preparing this approximately 25% in Spain, 3/4 of growth.

As for price, we believe it -- we cannot -- we do not disclose what our target price for budgeting is. However, we are now seeing somewhat lower prices as we are -- we are seeing lower prices. And the year, as you all know, is somewhat complex to budget among normal, among other reasons, which are more kind of normal reasons because we do not know what the effects of the virus will be in prices. I mean, they will have some effect, I suppose. I suppose, but I don't know. The first question was...

The base for the guidance. [indiscernible]

The base for the guidance? Yes. Yes, the answer is yes, the EUR 352 million, whatever it was. Yes, EUR 352 million. Next question, here, please.

This is a Juan Paolo from Mizuho. Well, first of all, congratulation for the results. And also, thank you for the presentation. I only have one question in regards the leverage ratio, I see that last fiscal year, you reached the guideline of 4x. But for the coming years, I would like to know if you'll bear in mind to go for alternative financing or you're going to keep continuing with the current sources?

The first part of your question was on leverage, on the EBITDA to...

Yes, on leverage. Guideline is 4x, and I would like to know [indiscernible].

Below 4x. Below 4x.

Yes, for the coming years to keep that level. If you are going -- you'll bear in mind to keep the current sources, or you go for -- you have in mind to go for alternative financing?

I suppose you would be referring to convertibles or equity, because all other sources would be the same -- would account for the same ratio and wouldn't change the ratio, not in the immediate -- nothing in planned as of today.

Fernando Garcia from Royal Bank of Canada. 3 questions as well. Could you provide a breakdown of IFRS 16 impacts in depreciation, financial expenses, et cetera? Second question, given the annual expectations of investments that you have, mainly in Energy, could you provide what is your expectation of weight of EBITDA in Energy and Concessions by 2024? Last question, you were talking already about 2020 hedge position. I would like to know a little bit more about your natural hedge ratio and your supply position, your subsidies in some markets. So how are you naturally hedged going forward?

Okay. Let me answer to what I cannot answer, which is our 2024 split, business split, because we do not provide guidance at -- in a 4-year span -- time span. As for NIF 16, [Foreign Language] Go ahead. Go ahead, you take it.

As for IFRS 16, the impact on an amortization has been minus EUR 76 million on the financial charges, minus EUR 22 million, compensated by an increase in EBITDA of EUR 23 million.

I'm not 100% sure I understand what you mean by natural hedge. We have all hedges in -- we have about 81% in total generation is covered by either regulatory coverage or other types of coverage, 81% of the total portfolio, 87% of the Spanish generating -- generation is covered. That is in -- we're talking revenues. If it be gigawatt-hours, it would be different. But in revenues, it's 87%, and that is a mixture of regulated assets and medium-term hedges contracts. I -- could you -- do you want to -- yes.

[indiscernible]

That is the question?

Yes. PPA [indiscernible]

I don't know if it's on.

And that percentage is going to stay at that level, 7% over time? Or...

We will -- well, you see, we would -- our aim is to maintain globally at least the maximum possible of 80% under hedged conditions or sort of contracted conditions. Now what happens is that often, we undertake the construction of the plant without a PPA, for example, or within a market, which is not regulated. And the PPA comes later. So there may be some variations in the level, which may not be always at the 80% level that is targeted. But in general, in the medium term, we will stay at that level. We will attempt to stay at that level. If we were to go beyond that level, then we would probably start reducing our execution are new capacity implementation if we were to go somewhat significantly below that level. Would you want to add something, Rafa?

Yes. Today, we have 80% of our revenues are secured by contracts of our regulation and the idea is to maintain this 80% of the revenues secured for the long term.