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Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today. We are pleased you are able to be with us for the presentation of our 2018 fiscal year results. The presentation will follow our traditional format. Firstly, we will begin with an overview of the results and the main developments during the period given by the top management that usually we have with us, our Chairman and CEO, Mr. Ignacio Galán; Mr. Francisco Martínez Córcoles, Business CEO; and finally the CFO, Mr. José Sainz.
Afterwards, we will move on to the Q&A session. We also like to point out that we are only going to take questions submitted via the web, so please ask your question only through our webpage, www.iberdrola.com. Last but not least, we would like remind you that next week on February 26, we will celebrate in London our 2019 Capital Markets Day, in which we will deal with all major matters for the period ending by 2022. Therefore, please keep any question you may have related to future years seized until that day. The event invitation has been already been sent and we hope to meet you there. Thank you very much for your understanding.
Additionally, we expect that today's event does not last more than 45 minutes. Hoping that this presentation will be useful and informative for all of you.
Now without further ado, I will hand over to our Chairman and CEO, Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.
So thank you very much, Ignacio. Good morning, everyone, and thank you very much for your participation in today's conference call. 2018 results confirm the trends we had been reporting over the year. In the last three months, growth in operating profit continued to accelerate, as it was already predicted, to reach a total €9,349 million, a 27.7% increase compared to last year. This performance was driven by an incremental contribution of investment, which reached €5.3 billion in the period, as well a 10% improvement in operating efficiency thanks to the measures put in place in all countries. Operating cash flow is also up by 13.1% to €7.328 million. The strong performance of business activities together with the control of financial expenses has allowed us to reach a historic net profit record of more than €3 billion, 7.5% up from 2017, in line with the outlook we provided a few months ago to all of you.
Following our commitments to increase shareholder remuneration in line with results, the Board of Directors will propose - we agreed yesterday to propose to the Annual General Meeting a shareholder remuneration of €0.351 per share, an increase of 7.7% compared to last year. The evolution of results have been positive in all businesses, in all geographies, registering a double digit growth in operating profit. Net gross EBITDA increased over 16% with a strong result in all geographies, notably in Brazil, where distribution and tariff increased by 60% on average and cost savings and synergies had continued to perform better than anticipated.
In USA, the positive impact of new rate cases and efficiency allowed AVANGRID to offset the negative effect of unprecedented minor storms. Renewables' EBITDA was up 39% due to the normalization of hydro and wind condition in Spain, which led to a 33% rise in output. In the USA - in the U.K., offshore wind production was 10% higher thanks to the capacity added in the last month and the better wind results, especially in the U.K. Offshore wind generation doubled thanks to the contribution of our offshore wind farm Wikinger of - 350 megawatt wind farm in Germany, fully operational since April. Operational result in generation and supply increased by 39% as Spain benefited from higher demand and strong retail activity and market condition normalized in U.K. In addition, EBITDA in Mexico increased in line with the new capacity installed, as you know, over 1 gigawatt. All in all, group EBITDA rose by almost 28%, even absorbing the negative foreign exchange impact of €365 million mostly connected with the Brazilian real and dollar.
Net investment reached, as I mentioned before, €5.3 billion during the year. Close to 80% of total investment was allocated to the networks and renewable businesses. Investment in networks asset, driven by the long term framework in place in all countries, increased by 16% in Brazil and 7% in United States and U.K. in local currency. In generation, the group has commissioned more than 2.7 gigawatt capacity since the beginning of 2018. We will have a positive impact on result this year. On top of that, we also have 7.3 gigawatt under construction or committed. Meaning in total we will have 10 gigawatt of new capacity by 2022 at least.
The ongoing implementation of efficiency measures along the year reaching €250 million has allowed the group to maintain flat net operating expenses, while increasing gross margin by 15.5%. As a consequence, our efficiency ratio has continued accelerating to improve by 429 basis points year-on-year. Operating cash flow increased by 13.1% to €7.3 billion, exceeding investment by over €2 billion. All businesses generated positive net cash flow. All the above together with the control of financial expenses has led to a 7.5% growth in net profit, exceeding €3 billion, as we have projected in our outlook for the year.
The last quarter of 2018 contributed more than €900 million to net profit. Driven in the first year of implementing of our 2018-2022 plan, a growth in net profit well above the average of the last five years, as you see in this slide, was an average of 6.7%. Moving on to our Brazilian subsidiary Neoenergia. In the first full year after the merger with Elektro, net profit reached BRL 1.5 billion, almost 3x higher than 2018. On top of the positive tariff reviews in networks, as previously mentioned, synergies and efficiency measures have led to savings to over BRL 300 million. The company also benefited from a decrease in financial cost, driven by lower interest rate and better financial structure.
In 2018, Neoenergia has also made significant progress in the implementation of its investment plan. The company was awarded four lots in the transmission auction held in December, the third one by Neoenergia in the last two years. This auction constituted a magnificent opportunity to organic growth in the country. Total committed investment in transmission and distribution to 2022 is on the range of BRL 22 billion. This will drive Neoenergia to more than double its current regulated network assets by then reaching over BRL 36 billion. Also in renewables, the company will install 550 megawatt of hydro capacity in 2019 and has another 840 megawatt of hydro and onshore wind capacity under construction.
In the United States, AVANGRID's adjusted net profit reached $684 million in the U.S. GAAP. The company continued to execute its long term investment plan with $1.7 billion mostly allocated to growing initiatives. The New England Clean Energy Connect project which will link Canada and Massachusetts is on track for commissioning in 2022. As you remember, it's an investment of $950 million. The company also executed 594 megawatt of solar and onshore wind long term contracts as there are almost 1.3 gigawatts of onshore capacity in construction, out of which 1 gigawatt will be in operation during 2019 and the other 260 in 2020. Additionally, the Vineyard wind offshore project in Massachusetts progresses at schedule, with the commissioning estimated between 2021 and 2022 - we are trying to push to 2021 as much as we can.
On the regulatory front, AVANGRID reached settlement for the rate case of Connecticut Natural Gas and Berkshire Gas Company in Massachusetts. This is a three years and effective from January. The company also filed a new rate case for Central Maine Power, which is under negotiation now. Finally, executing of AVANGRID's commitment to raise dividend in 2018, the company Board of Directors approved a quarterly dividend of $0.44 per share payable in April.
In light of the result presented today, the Iberdrola Board of Directors will propose to the company's Annual General Meeting, which is going to be held on the 29 of March, a supplementary dividend of €0.2 per share to be paid in July. Once added to the interim dividend of 0.151 per share already paid in January, this almost leads to a shareholder remuneration of €0.351 per share, increasing by 7.7% and slightly above net profit.
Will now hand over to CFO, Pepe Sainz, who will present the group financial result in more detail. Thank you.
Good morning to everybody. As the Chairman has explained, 2018 operating results have been strong, with double digit growth in all businesses. Our reported net profit grew 7.5%, with €110 million negative impact from currency devaluation: the dollar at 5.7%; the real, 19.5%; and the pound around 1%. From the end of August, perimeter with NEO is homogeneous as the full consolidation started in September 2017. Revenues increased 12.2% to €35.075 billion and procurement group 9.7% to €19.6 billion. As a consequence, gross margin rose by 15.5% to €15.4 billion. The Neoenergia global consolidation for the full year more than compensated the FX negative impact.
Net operating expenses fell 0.4% to €4.1 billion, positively affected by around €200 million provisions or efficiency plans accounted for in the fourth quarter of 2017. And there is also an around €200 million positive impact from FX and the IFRS 15. Thus compensating the increase related to the NEO consolidation of around €400 million. Levies increased by 3% to €1.9 billion, mainly affected by a €68 million increase in Spanish taxes on generation due to higher prices and higher output, €49 million of nonrecurring reversals of regional taxes, and higher U.S. network levies; partially compensated by positive FX impact and other, mainly the cancellation of the 7% tax on Spanish generation in the last quarter of the year.
Analyzing the results of the different businesses and starting with networks, it's EBITDA was up 16.2% to €4.9 billion, with positive evolution in all geographies. As you can see in the slide, Spain contributed 35%, the U.S. 27%, Brazil and the U.K. 19%. In Spain, EBITDA grew 12.5% to €1.7 billion, thanks to the positive settlement from previous years and the positive court rulings on assets given by customers, of which €53 million is a one-off already accounted in June. In the U.S., EBITDA was 4.5% up to USD 1.6 billion due to growth in the rate plans and positive IFRS impacts, which have been partially compensated by storm costs that were $23 million higher than last year.
AVANGRID has had also the negative impact from tariff adjustments accounted from the third quarter onwards due to the tax reform, but this, as you know, has no impact at net profit level. In Brazil, EBITDA grew BRL 2.3 billion to BRL 4.1 billion, driven by the NEO consolidation and the strong tariff revisions in 56% of its rate base from May 2018 as well as higher demand, 2.8%, and efficiencies. It's worth mentioning also that in August Elektro tariffs were increased 5.85%, fully contributing to the fourth quarter results.
Finally, in the U.K., EBITDA grew 4.7% to £813 million, with higher revenues both in transmission and distribution. Renewables' EBITDA rose 39.3% to €2.4 billion, with a strong growth in all markets. Output increased by 21.7% to 61,754 gigawatt hours, with a 3.8 percentage points higher load factor mainly thanks to Spain, Mexico and the rest of the world. Installed capacity reach 29,177 megawatts. Spain is now the main contributor to the renewables' EBITDA, with a 38% stake; followed by the U.S., 23%; and the U.K., 21%. In Spain, EBITDA reached €918 million, 49% higher than last year, mainly driven by a 33% higher hydro output. In the U.S., EBITDA grew 13.2% to $677 million, thanks to a 9.7% higher output linked to the 7.9% rise in average installed capacity and higher load factor.
In the U.K., EBITDA was up 33.4% to £450 million, with higher load factor and 6% higher average operating capacity in onshore, together with better prices and payments for curtailments. In Brazil, EBITDA grew BRL 319 million to BRL 557 million due to NEO consolidation and efficiencies. In Mexico, EBITDA rose by 30% to $77.3 million as a consequence of the 14% higher output due to a higher load factor. Finally, in the rest of the world, EBITDA reached €241 million due to the entry of Wikinger during the first half, which is now fully in operation. Generation and supply EBITDA grew 39% to more than €2 billion, with a strong improvement from the first nine months growth. As you can see in the slide, Spain accounts for 49% of EBITDA; Mexico, 31%; the U.K., 15%; and Brazil, 5%.
In Spain, EBITDA grew by 28% to €1 billion thanks to the 12% higher sales, better margins as well as increasing the retail activity, including products and services. Net operating expenses also improved driven by the provisions for efficiency plans accounted for in the last quarter of 2017 and the IFRS 15 positive impact at the EBITDA level. Levies also fell slightly. In the U.K., EBITDA grew £177 million to reach £272 million, thanks to margin and operating cost normalization, smart metering and capacity payments. Net operating expenses also improved, driven by the lower impact - or the impact of lower cost due to the IFRS 15.
In Mexico, EBITDA grew 27% to USD 754 million, accelerating from the 10% growth of September, driven by higher availability and new installed capacity. At the end of the last quarter, Iberdrola commissioned 878 megawatts, which will contribute fully to the EBITDA in 2019 onwards. And Brazil added BRL 396 million to EBITDA as a consequence of the NEO consolidation. EBIT doubled to €5.4 billion due to the EBITDA growth. And the 15% fall in depreciation and provisions as a consequence of the €1.2 billion nonrecurring provisions accounted for in the fourth quarter of 2017 more than compensated increase in due to Brazil consolidation, higher asset base, IFRS 15 and some other provisions that we have accounted for in this quarter.
Net financial expenses reached €1,156 million, €219 million more than previous year, mainly due to the full consolidation of NEO financial expenses that accounted for €244 million in this year versus €86 million last year. There has been a €32 million increase in non-debt related cost due to lower FX gains and some other positive impacts in 2017. Debt related cost increased €27.9 million, of which €35 million comes from the accounting changes driven by the IFRS 9. Our average net financial cost was 3.4% as the higher Brazilian real weight increases the average cost of debt. Excluding NEO, our cost of debt fell to 2.97%.
Our credit metrics improved versus 2017. FFO over net debt was at 21.5%, up from the 21% of last year. Net debt to EBITDA was 3.65x versus 4x in last year. Retained cash flow/net debt reached 20%, up from 18.2% last year. And leverage ratio was mainly in line with last year. As you can see in the slide, year-on-year net debt grew by €1.3 billion to €34.1 billion, driven by investments and a one-off tax payment of €665 million that will be recovered in the following years. The appreciation of the currencies in the fourth quarter increased our 2018 net debt by €560 million versus the net debt that we showed at the end of the third quarter.
Reported net profit grew 7.5% to €3,014 million thanks to the strong performance of the group and despite €270 million of lower nonrecurring. Reported net profit excluding nonrecurring grew 19% to €3,005 million. Taxes increased by 2.4 - increased €2.4 billion as 2017 was affected by the U.S. tax reform that lowered taxes by €2 billion. 2018 effective tax rate is 22.3%. Thank you.
So to conclude, let me highlight then the set of result we are presenting today. Position: company almost one year ahead in the delivery of our 2018-2022 plan. This trend is expected to continue in 2019 through the acceleration of investment in regulated networks asset and the addition of almost 6,000 megawatt of renewable or contracted generation capacity, which has been already done between 2018 and 2019.
We expect to combine these growth initiatives with the implementation of new efficiency measures, leading to a mid-single digit growth at EBITDA and net profit level in 2019.
As you know, further details on the execution of the plan will be provided next Tuesday, as Ignacio mentioned, at our Capital Markets Day in London, where I hope to see all of you.
Thank you very much for your attention. And now we are ready to answer any question you may have regarding these results.
Thank you. Let's move on to the Q&A part. The first question comes from Carolina Dores, Morgan Stanley. Does the guidance of growth in 2019 include any benefits from the adjustment of IFRS 15 16? If so, how much do you expect EBITDA to increase due to this accounting changes?
Pepe, can you reply to the question?
Yes. Well, at level of the EBITDA, it will affect in around - IFRS 15, no, because we have already adjusted that for 2019 - 2018. IFRS 16 at the EBITDA level will increase around €60 million, but will also increase our debt in around €400 million. We will explain that more in detail next week. At net profit level obviously no, because it is an accounting change, just putting the results in one place or in another.
Second question comes Rui Diaz, UBS, and I assume that he is talking about 2019 guidance. His question is, are you assuming a normalized hydro year in Iberia, if so, aren't you concerned with the fact that current hydro output, rainfall and reserves are below normalized level?
So of course I think when we make our budget, always we make an average rainfall year, which I feel is normal. As far as I know, in this moment the reserves up to today is around 30% higher than they were already in previous year. So I think we are in the range of 5 terawatt hours already in our dams to, what, something 3.3 or 3.5 previous year. So it's 30% more than previous year already in this moment.
Third question comes again from Carolina Dores, Morgan Stanley. What is the average hedge price in Spain for 2019 and how that compares with 2018?
Paco, you mention that then.
Yes, we have already closed all the production expected for this year, for 2019, and the price is around €3 per megawatt hour higher than 2018.
Fourth question comes from Meike Becker, Bernstein. What do you expect the timeline to be in Spain to put the new rate of return for networks activity into the law?
Well, I think we have already seen - last week was already approved. The return of powers of remuneration in regulated activities to the regulator, to the CNMC, which I think is - as you know, than these people has already - a long time has already decided that remuneration have to be already in line with the WACC instead of the long term bonds, which we already did previous time. So I think they will take some time on analyzing those things and fixing those ones. But for the time being, we are already in the situation. We are keeping our 6.5%, so which I think nothing has been changed. I think that is the situation at present. But I think it takes some time. But meantime, I think we continued with the same remuneration that we had already before.
Next question comes from again Rui Diaz, UBS, and it's related to regulation. Do you think a potential change in government could put a risk to the work that has been developed by the current government? Do you think there is a chance for a reverse of some of the measures, renewable targets, allowed returns, CNMC independency, et cetera?
Well, I think - I don't think so. I think today is going to be presented the energy and - the climate and energy plan had to be submitted to the European Union. We had two months delay. But as far as I know, the people that has been working on that one are almost the same people who has been working with the previous government. I think national planning is not something which had to be re-made without already an expert on that one. I think - I hope then the presentation which is going to be held today midday is already to be in line with what we have already been talking with different members of the administration for a long time, now and before, to make already Spain to benefit of the strong and good condition we have already in solar, in wind and even in storage with the hydroelectric power plant that we have in this moment. So I'm not expecting changes of that one. The fact I think the CNMC, withdraw of the powers, has already been supported by everybody and even the Partido Popular has not already opposed to that one.
Next question comes from Javier Suarez, Mediobanca. He's asking about, the dividend for 2018 has been increased quite materially. Can you explain us the rationale behind this significant increase when leverage is still relatively high?
So I think it's still current with our policy. We've been saying for the last 20 years that dividend will increase in line with benefit, with profits, keeping already a payout in the range between 65 and 75. That is precisely what we are doing. I think we are increasing in line. I think the profit was 7.5% up. This is 7.7%, but finished to round numbers. I think I'm not seeing - then we will put already in July - instead of €0.2, we can already make €0.199. So I think we decide upon €0.2, which is much easier to be explained. But I think that is exactly maintaining our dividend policy, which has been already the same one for many years. So increasing the dividend line with profits and maintaining a payout between 65 and 75. So I think that is precisely what we have already done.
Next question comes from Meike Becker, Bernstein, and Jorge Guimaraes, Haitong. And these are three questions related to Brazil. The first one is, you mentioned the progress in Brazil. Would you mind elaborating what has gone well and what the next steps are? The second one is, can you elaborate on the Brazilian impacts in financial results, namely if any restructuring changes has been included in financial cost in the fourth quarter of 2018? And finally, the Brazilian regulatory, Aneel, has stopped the distribution of dividends to a regulated company in Brazil called Goiás. Does this increase the regulatory risk in Brazil given that there is a new government?
So what has already gone well in Brazil? I would like to say everything. I think it's rate cases - the remuneration of regulated activities in two of the largest distribution company has increased. The efficiency measures taken has already generated almost BRL 300 million savings. The third one is, we changed the financial structure, which allow ourselves to diminish drastically the cost of the rate - the cost of our debt. And fourth, I think we have already succeed in gaining certain auction. We've get already just a very high award in the last few years, as I mentioned. Then with the existing committed investment, the RAP of the regulatory asset base of our regulated activities almost will double, which I think that is something reaching something like - I don't remember, but the number is BRL 36 billion by 2022. And finally, I think we have already make extremely good work already in terms of quality of service, which precisely doesn't allow us to happen, which has already allowed - happened to our competitor.
So our competitor has not been able to succeed in achieving the targets. Then Aneel is already fixing for each - in quality service for each of the distribution companies and they are already - the regulator is allowed to penalize even - they have even allowed to withdraw the concession if they are not really reaching the terms already agreed with the regulator. That is not happening at all. The fact we are not in the plans what is already the special provision where they are making with the regulator, we are not - I don't know if that one is still there, but I think we are not -– there is no one of our distribution companies at this time, because the efficiency measure and the investment made and the quality of service provide is far for what is already the risky area that's already happened to some of our competitors.
Yes. And regarding the financial expenses, I think we have explained that this year they will account €244 million versus €86 million last year. So €158 million more. There has not been any special charge in Brazil, but we have to remind that there is an impact of €35 million that it has to do with the IFRS 9, which in the previous year we didn't have. And this has been a change in the accounting that at past something that was not impacting 2017 results. So we have an additional €35 million only due to an accounting change. Also you have to take into account that in terms of what we do normally, which is the hedge of currencies, last year we had very positive results as the dollar devaluated against the euro strongly and this year we have seen a recovery of the currencies, especially in the fourth quarter. So actually the derivative impacts that we are accounting in the financial expenses have been less positive than last year. And I think these two elements, the €35 million - or three elements: plus, the increasing in the financial expenses coming from Brazil and the impact or the less positive impact of FX derivatives explained the - and obviously the increase in the average net debt increase explain the increase in the net financial expenses despite the fact that our financial costs have been going down.
Next question is related to U.K. liberalize business and comes from Stefano Bezzato, Credit Suisse, and Carolina Dores, Morgan Stanley. Can you provide some more detail of the growth in EBITDA for the U.K. liberalize business? Does this include any capital gain from the disposal of the power generation asset to Drax? And finally, can you split the U.K. liberalized EBITDA in generation, supply and other services?
So I think the first question related to the capital gain, automatically I say to you, no, our policy that, if there are any, always will come already in the recurring result on the bottom line of the account. So it's not included at all any capital gain on that one. And related these two themes, I think perhaps you can already - Ingacio sent this information to them. Because I'm not by hand - but I think by memory, I know that traditionally - I don't know the numbers in my memory - traditionally, the results in power generation used to be not positive or very - or negative. That is the reason why we've been selling that one - or just little margin. And in terms of retail, I think the situation was normalized. The previous year we have a tremendous negative impact of several things. Among others, all our problems, we suffered with the changes of our billing system. And I think that is being normalized. But I not now in my head already the numbers. Ignacio, you can provide all this information. But I think no capital gain included at EBITDA; that I know by certain.
Our next question comes from Meike Becker from Bernstein. Could you give us the impact of the price cap in the U.K. on your Q1 2019 results?
I don't know in the first quarter, but I think in the whole year the numbers, which I know already in my head, is on the range of £100 million. So - but I'm not - the quarter-by-quarter not - but in the whole year it's around £100 million which is going to affect on this one.
Javier Suarez from Mediobanca ask about AVANGRID. And the question is, has revised - AVANGRID has revised downward its outlook for 2019. Can you explain us the reason behind and what managerial action if any can be taken to correct on the performance?
Well, I think the numbers they are providing is already - account something which - in some more realistic thing. I think in the terms - especially in renewables, I think we've been affected first by: certain of PPAs we had already in the state has already finished their life. I think PPAs we have been 14 years, or something else. They are ending. So we are forced to sell. The prices is going to go down in those PPAs which are already been finished the validity. And the second one I think is - the rest of the items is mainly that one. So is - and the wind, as well we've been the adjusting the wind. We've seen in the last few years that systematically the expectation of wind is already been - is less and less, which I think we are adjusting in our budget, so to average of the last few years to put the numbers in what is really already happening. So wind is another one. We are in the state - you see then the climatic change is affecting on those things and that is affecting as well to ourselves. The fact - I think last December was probably the less windy year in the state. So that being adjusted in our projection together with the prices of the PPAs which has already finished and that we are already just adjusting these two things. No, you come in...
Yes. The next question is related to the topic that Pepe was mentioning and is coming from Meike Becker from Bernstein. Would you mind reminding us how much amounted the storm cost and another one-offs in the U.S. in 2018.
The impact of storms in this year was $169 million. And obviously, as the Chairman was explaining, that has had a negative impact on the EPS of the company during 2018.
Jorge Guimaraes from Haitong is asking about how much costs related to efficiency improvement measures have been booked in the fourth quarter of 2018?
In the fourth quarter? So I don't know. You can already explain that one. You can send this information. I don't know the information in my mind, so...
Next question is from Jorge again, can all the EBITDA from Mexico in 2018 be considered as recurring?
Yes. And I think it's not any reason why it's not to be recurring. I think our expectation even is it's going to improve because we are already putting so more power in operation this year.
We have a question from Javier Suarez, Mediobanca, and Jorge Guimaraes, Haitong, is related to the Spanish regulation. And can you please update on the latest negotiation with the administration of the future of nuclear generation fleet in Spain? And we have another additional related that is from Rui Diaz, UBS. When should we expect the potential positive impact from the extension of the nuclear asset life in your accounts to take place and what would be the impact?
Well, let's see today what is going to be announced by the government. As far as I know from the media, is that the plan on the national energy plan is that nuclear power plant will be closed between 2025 and 2035. So I think it's a lot of comments and noises, but we will expect today what is going to be this data. But I think what it is already just trying to put is: Is what does the country need in terms of power and how this power can already been - already substitute for another alternatives? And that is what we will see today at midday what is going to be presented in the ministry. We will be delighted to be able to make all those comments next Tuesday when we meet in London.
Next question comes from Andrew Müller from Credit Suisse and it's related to Brexit. Around 20% of your EBITDA comes from the U.K. How are you protecting this in the event of a hard Brexit?
So as you know and I have repeated several times, we are not a company where we are exporting or importing goods. I think we are a company, but we are almost fully regulated, almost 90% regulated. We are already being paid in pounds. We are investing in pounds. Most of our suppliers are British, so almost 80% of all our investment are already produced locally. And only I'll remind something, which I think certain investment which are ongoing, mainly in East Anglia, with certain equipment which is 40% or something that is imported. But we have already all coverage for all those things. So I think the impact mostly should be the FX when we consolidate on our account, but economically I think it's not any effect. In the FX for this year - and perhaps too, Pepe, you can already explain that one - we have hedges already made for the whole year as we make with local currencies. So in this moment, 100% of our results - expected result in Britain are already hedges with - in the - for the FX.
The last question we have received is from my point of view is from Rebollo Juan, so please allow me to switch to Spanish. The Spanish government presented the Spanish climate and environment plan. What do you expect to be announced?
Well, a few days ago in Davos I made some comments because I received a very similar question. And I asked - I made some comments. I mentioned this to some of my colleagues. And I said that one of the things that we've been saying for a long time and that is that the struggle against climate change is not a problem, it's a major opportunity. And for Spain it's a major opportunity because we are a country that has all kinds of resources. So therefore, we have sun, we have wind and we also have reservoirs so that we can transform this into storage. And Iberdrola has been doing this for many years and we have lots of storage capability right now. So this offers major opportunities to produce cleaner power, cheaper power. And if the interconnections are developed with the rest of Europe, we'd even be able to export these resources we already have, because at Iberdrola we have some wind farms that we are building now where the power - where we have signed agreements with the Dutch companies that buy our energy. This is a fact. So therefore, I think that this is a positive issue. And let's wait and see what the government has to say for itself today. But I think that climate change and adequate energy planning that will allow us to offer the necessary safety that the country requires to make investments is undoubtedly a wonderful opportunity for the country. And I know that things will be done reasonably. And Iberdrola is along these lines. And we're now making very significant investments. We've implemented lots of wind farms and lots of issues that we'll be presenting next week in all detail.
To conclude this presentation.
So thank you very much for participating in this short conference call. I hope we will see all of you next Tuesday in our Capital Market Day, which we can already update you on our long-term plans which I announced to you, that we would like to accelerate all what we have been doing.
I think we said during the year we're going to reach certain result. The result is here. We are already ahead of schedule of our plan. And I think it's our plan for the next few years is going to continue this rate of acceleration of our investment and our results, but we will already have the opportunity of sharing with you all our thoughts next Tuesday. Thank you very much and see you next Tuesday in London. Thank you.