Letter from the Chairman

José Manuel Entrecanales, Chairman of ACCIONA

ACCIONA's 2019 Integrated Report is being published in the midst of one of the most acute crises that humanity has faced in recent history.

This situation has created great uncertainty and severely tested the mechanisms that our society and its institutions have to resist and overcome adversity, however unexpected and unknown.

My thoughts are with everyone who has lost a loved one in recent months, particularly those who are part of our company. Hundreds of thousands of citizens all over the world have sadly been united by a common tragedy. They have the full sympathy and solidarity of ACCIONA.

This is no easy task, since our work in many geographies is linked to the delivery of essential services such as electricity and water, as well as operating in the front line in hospitals and ambulances, and providing facility cleaning services.

The conduct of our professionals in these critical situations is exemplary, and we are proud of their performance, especially during the toughest weeks of the crisis. I would like to pay tribute to them and also to the thousands of ACCIONA volunteers around the world who provided support and assistance where we were required. There are no borders in this crisis, no states, no north or south.

Infrastructures on which to base models of prosperity that are capable of realising the inalienable goal of economic growth and fairer social development in harmony with our planet, which we have been exploiting recklessly for decades.

Just months ago, it was common in business forums to talk about the need to promote changes in the role of companies in social design. Although the shortterm outlook has changed, the roadmap to a more inclusive and planet-friendly economy and the role that companies must play in this process—both in overcoming the crisis and in addressing the recovery— remain unchanged.

In fact, while engaging in the reconstruction, we must not forget that the crisis occurred just as we were beginning to lay the foundations for a transition towards a cleaner and more balanced and decarbonised economic model; also that, if we wish to complete the task, we must not deviate from that goal, so as to avoid irreversible negative consequences for our climate, for biodiversity and the environment, and for the health of people and our economies.

As a result, all stimulus policies and measures that are adopted for the recovery, and the actions of companies themselves, should be shaped by initiatives such as the “European Green Deal”, so as to ensure that the right decisions are made to enable us to respond to the economic crisis while, at the same time, transforming our societies on the basis of a sustainable, climateneutral economy.

This approach offers us the opportunity to focus the recovery efforts on building the foundations of a new model. History is giving us a second opportunity to make our world more resilient to future threats and to accelerate a transition that, due to climate and social imperatives, we will inevitably have to address in the coming years.

Outlook

Although our ongoing analyses have forced us to amend the forecasts and conjectures for 2020 that we made at the beginning of the year, our company is determined and firmly committed to those goals.

During 2019, we developed our businesses around solutions capable of responding more effectively to the challenges of the global progress agenda. From energy, water management, the development of cities and transport, through health services and ecosystem regeneration to electric mobility, ACCIONA wants to continue playing a leading role in changes that require a different understanding and approach.

This report is a good opportunity to describe our performance in 2019. It was a year in which we met and exceeded the goals we had set.

We increased EBITDA by 9% and net profit by 7.2% in comparison with the previous year. Capital expenditure was also higher than planned as we seized some attractive opportunities that will set the pace of growth in the coming years.

The company's net debt/EBITDA ratio was below our ceiling of 4, reflecting increasing operating efficiency and also solid growth in profit margins, in line with our strategy. Our business is stable, predictable and growing, based on a pipeline of projects with attractive returns and a risk profile that is balanced between greenfield and brownfield projects.

Our “business as unusual” approach has been recognised by the European Commission as being appropriate for a low-carbon economy, and our core competency is the ability to design, build and operate complex infrastructure assets for third parties or for our own portfolio applying an end-to-end approach that we call SMART: Sustainable, Mitigating, Adaptive, Resilient and Transforming.

This unique approach enables us to offer integrated solutions designed for progress and superior regeneration. Over the next few years, we will continue to take advantage of the acceleration in the renewable energy market, expanding our 10 GW of installed capacity with new projects in a pipeline that already exceeds 13 GW worldwide.

We will strengthen our lead in developing opportunities related to basic infrastructure, which during 2019 resulted in significant growth in total capacity, as we achieved record levels of order intake and competitiveness.

In over a century of history, ACCIONA has evidenced its superb skills in developing profitable opportunities related to meeting real needs. An uncommon ability to understand the challenges facing a society in evolution. Our determination and the trust of the markets make us a preferred choice for clients who want to turn ideas into profitable infrastructure assets—assets that are designed and operated to maximise the progress of the societies they serve.