1. **Relevant industry**

IBERDROLA SA is a large integrated electric utility with substantial regulated networks and power generation/retail activities. Based on the provided methodologies, the closest relevant sector is **Regulated Utilities**, with some exposure to unregulated power and gas. For the ratio trend estimate, I apply the regulated-utility-style S&P cash-flow/leverage framework.

Because the data does not provide all S&P adjustments, I use a simplified approximation:
- Adjusted EBITDA ≈ reported EBITDA.
- Cash interest ≈ interest paid on financial debt excluding capitalized interest + lease interest + hybrid/perpetual interest.
- Cash taxes ≈ income taxes paid classified as operating activities.
- Reported debt ≈ current and noncurrent borrowings/bonds + current and noncurrent lease liabilities + financial instruments with liability characteristics.
- Adjusted debt ≈ reported debt minus cash and cash equivalents.
- I do not include derivative liabilities, trade payables, provisions, pensions, guarantees, or hybrid equity adjustments beyond liability-characteristic instruments, because the required S&P-specific split is not available.

---

2. **2021 Adjusted EBITDA**

Reported EBITDA for 2021:

\[
EBITDA_{2021} = €12{,}006m
\]

No additional lease, pension, JV, or nonrecurring adjustments are available.

\[
Adjusted\ EBITDA_{2021} \approx €12{,}006m
\]

---

3. **2021 FFO**

Cash interest components for 2021:
- Interest paid on debt: €741m
- Lease interest paid: €49m
- Perpetual subordinated obligation interest: €94m

\[
Cash\ interest_{2021} = 741 + 49 + 94 = €884m
\]

Cash taxes paid:

\[
Cash\ taxes_{2021} = €832m
\]

FFO:

\[
FFO_{2021} = 12{,}006 - 884 - 832 = €10{,}290m
\]

---

4. **2021 Adjusted Debt**

Use balance sheet at 2022-01-01 as year-end 2021.

Debt components:
- Noncurrent debt/bonds/bank borrowings: €31,179m
- Current debt/bonds/bank borrowings: €9,984m
- Noncurrent lease liabilities: €2,253m
- Current lease liabilities: €158m
- Noncurrent financial instruments with liability characteristics: €525m
- Current financial instruments with liability characteristics: €100m

\[
Gross\ debt_{2021} = 31{,}179 + 9{,}984 + 2{,}253 + 158 + 525 + 100 = €44{,}199m
\]

Cash and cash equivalents:

\[
Cash_{2021} = €4{,}033m
\]

Adjusted debt:

\[
Adjusted\ Debt_{2021} = 44{,}199 - 4{,}033 = €40{,}166m
\]

---

5. **2021 Adjusted Debt / Adjusted EBITDA**

\[
Debt/EBITDA_{2021} = \frac{40{,}166}{12{,}006} = 3.35x
\]

---

6. **2021 FFO / Adjusted Debt**

\[
FFO/Debt_{2021} = \frac{10{,}290}{40{,}166} = 0.256
\]

So 2021 FFO/debt is approximately **25.6%**.

---

7. **2022 Adjusted EBITDA**

Reported EBITDA for 2022:

\[
EBITDA_{2022} = €13{,}228m
\]

No additional quantified S&P adjustments are available.

\[
Adjusted\ EBITDA_{2022} \approx €13{,}228m
\]

---

8. **2022 FFO**

Cash interest components for 2022:
- Interest paid on debt: €1,495m
- Lease interest paid: €61m
- Perpetual subordinated obligation interest: €169m

\[
Cash\ interest_{2022} = 1{,}495 + 61 + 169 = €1{,}725m
\]

Cash taxes paid:

\[
Cash\ taxes_{2022} = €1{,}055m
\]

FFO:

\[
FFO_{2022} = 13{,}228 - 1{,}725 - 1{,}055 = €10{,}448m
\]

---

9. **2022 Adjusted Debt**

Use balance sheet at 2023-01-01 as year-end 2022.

Debt components:
- Noncurrent debt/bonds/bank borrowings: €36,129m
- Current debt/bonds/bank borrowings: €10,458m
- Noncurrent lease liabilities: €2,287m
- Current lease liabilities: €151m
- Noncurrent financial instruments with liability characteristics: €576m
- Current financial instruments with liability characteristics: €87m

\[
Gross\ debt_{2022} = 36{,}129 + 10{,}458 + 2{,}287 + 151 + 576 + 87 = €49{,}688m
\]

Cash and cash equivalents:

\[
Cash_{2022} = €4{,}608m
\]

Adjusted debt:

\[
Adjusted\ Debt_{2022} = 49{,}688 - 4{,}608 = €45{,}080m
\]

---

10. **2022 Adjusted Debt / Adjusted EBITDA**

\[
Debt/EBITDA_{2022} = \frac{45{,}080}{13{,}228} = 3.41x
\]

---

11. **2022 FFO / Adjusted Debt**

\[
FFO/Debt_{2022} = \frac{10{,}448}{45{,}080} = 0.232
\]

So 2022 FFO/debt is approximately **23.2%**.

---

12. **Credit trend classification**

### Signal 1: Leverage

\[
Change = 3.41x - 3.35x = +0.06x
\]

Thresholds:
- ≤ -0.2x = Improving
- between -0.2x and +0.2x = Stable
- ≥ +0.2x = Deteriorating

The leverage increase of **+0.06x** is within the stable band.

**Signal 1 = Stable**

### Signal 2: Cash-flow coverage

\[
Change = 0.232 - 0.256 = -0.024
\]

This is a decline of about **2.4 percentage points**.

Thresholds:
- ≥ +0.03 = Improving
- between -0.03 and +0.03 = Stable
- ≤ -0.03 = Deteriorating

The FFO/debt decline is still within the stable band, although negative.

**Signal 2 = Stable**

### Combined conclusion

Both leverage and cash-flow coverage signals are **Stable**. EBITDA and FFO increased modestly, but adjusted debt also increased materially due to higher borrowings funding investment. The deterioration in FFO/debt is not large enough to cross the threshold, and leverage changed only slightly.

<answer>Stable</answer>