José Manuel Entrecanales
CHAIRMAN OF ACCIONA
MESSAGE FROM THE CHAIRMAN
MESSAGE FROM THE CHAIRMAN
José Manuel Entrecanales
This 2020 Integrated Report is being released just as we are approaching the end of a very hard moment in history in which we have relearned the virtue of cooperation, the importance of science and the need to think beyond efficiency; in which the ability to overcome adversity has been paramount.
The climate crisis, biodiversity loss and rising inequality are waves of instability whose unimaginable consequences could make this health crisis just the first of many.
For this reason, and since the COVID-19 crisis erupted, we have had to adapt on a daily basis to a changing reality, where our company's vision and purpose form the basis of the regenerative approach we are developing.
A very hard moment in history in which we have relearned the virtue of cooperation, the importance of science and the need to think beyond efficiency
NOT A LOST YEAR
In this context, ACCIONA proved its capacity to respond forcefully but also flexibly. We have been preparing for this for over 20 years. By developing basic infrastructure, designed and operated to create societies that are more sustainable and resilient. As a result of this conviction, many of the services the company delivers proved to be absolutely vital for addressing the pandemic in 2020.
Hospital management, uninterrupted electricity supply, water management and cleaning services helped society to better withstand the difficulties. We are proud that our company and the people in it were able to contribute to sustaining living standards in our society. We have demonstrated that our principles and our sustainable approach are a central and critical element of our business strategy.
On the economic front, the main challenge was to control the company's debt and liquidity. The uncertainty resulting from the economic slowdown and lockdowns forced us to define a response for each of our lines of business, as well as to actively manage investments and divestments.
We have been preparing for this for over 20 years. By developing basic infrastructure, designed and operated to create societies that are more sustainable and resilient.
As a result, we attained a net debt/EBITDA ratio of 4.21x, below the 4.5x ceiling announced at the beginning of the pandemic. We also reduced net financial debt by 11% and maintained unprecedented levels of liquidity at all times. Despite a 10% decline in revenues and a 22% decline in EBITDA, Group net profit grew by 8% thanks to active management of our operations.
The fact that the concessions and water divisions were classified as essential activities during the pandemic enabled them to attain double-digit growth in revenues. Construction, energy and services saw a year-on-year decline in revenues, largely as a result of the widespread slowdown and the consequent decline in the demand for energy. Nevertheless, we believe that these dips are temporary and we are confident of a recovery in 2021 and 2022.
Conversely, as the leading company in the sustainable infrastructure sector, we were able to seize opportunities that arose during the year. In 2020, we attained 10.7 GW of renewable power generation capacity, surpassing the 10.5 GW target we had set in 2015. The infrastructure backlog expanded in 2020 from 8 B€ to 12.1 B€ due to obtaining major contracts and new projects. In June it became known that ACCIONA was the world's largest scooter sharing operator, and in December we launched a pioneering project to produce green hydrogen on the island of Mallorca. These milestones clearly point to new revenue streams in the future that will enhance the leading position of our business model.
BASIC INFRASTRUCTURE FOR PROSPERITY
True to our purpose, we have continued to deploy our business model based on both vertically integrated and horizontal solutions that have a positive impact on people and the planet. Our solutions have become even more productive in a context of health crisis and polarisation, where governments and other clients are increasingly making contract awards conditional upon a positive impact — what we call "regenerative by design".
Clients have a growing awareness that only companies that show an explicit long-term commitment can be relied upon, especially given the context and the implications of the infrastructure industry for society.
As a result, our value proposition is even more important, positioning ACCIONA as the go-to partner for contributing to the 2030 Agenda and attaining the Sustainable Development Goals at local level, in each municipality, region, country or state. At ACCIONA we have created a solid, stable funding framework for our investors, in which each project we develop represents a profitable investment opportunity, as well as a way to maximise the social and environmental productivity of the communities in which we operate. This has enabled us to minimise risks and to deploy the full transformational potential of our activity.
Our value proposition is even more important, positioning ACCIONA as the go-to partner for contributing to the 2030 Agenda
Integrating this approach into all our projects between now and 2025 will allow us to connect the supply of capital with the demand for profitable projects that drive sustainable local development, enabling the generation of profits in the medium and long term.
IT'S TIME TO ACCELERATE
2021 is a very important year for us. The IMF projects 6% economic growth worldwide, but it is our responsibility to ensure that the development arising from that economic growth results in a more inclusive and resilient planet. In this context, ACCIONA expects to invest close to 2 B€ in 2021.
Government plans to re-launch the economy in a sustainable way have spurred net zero commitments for 2050 on the part of many economies, encouraging large companies to secure green energy supplies. This is a turning point in which, after thirty years of development, renewable energy is entering a stage of maturity and mass deployment. It is also an opportunity for other technologies needed for a complete decarbonisation, such as hydrogen.
ACCIONA expects to invest close to 2 B€ in 2021.
The ACCIONA Energía IPO seeks to take advantage of the exceptional climate in the renewable energy industry and to lock in our privileged position in a context of accelerating decarbonisation. The company is determined to maximise its contribution to a zero emissions economy and firmly establish its lead in this era. In its 30-year history, ACCIONA Energía has contributed to the creation and development of the green energy sector, using its own resources to date. The company has been preparing its teams for a long time, strengthening its geographical footprint and its project portfolio to take advantage of this unique moment in the renewable sector, with the objective of doubling in size to an installed capacity of 20 GW in 2025. An independent listing will provide us with greater financial capacity and efficiency, as well as strategic strength to address this great challenge and continue to lead the sector.
ACCIONA doesn't have all the answers to what will happen in the coming years, but we do know the role we want to play. As has occurred in the past, those who place their trust in us will be rewarded by our company's leadership and strong commitment to the sustainable development and transformation of our world. The time for regenerative action is now. I am relying on you to help us achieve it.