**Step 1 – Industry identification**  
IBERDROLA SA is a multinational electricity and gas utility that operates under regulated tariff frameworks. According to the supplied methodology, this falls under **Regulated Utilities**.  

**Step 2 – Adjusted EBITDA (2021)**  

| Item (€ million) | 2021 |
|-------------------|------|
| EBITDA (reported) – “Beneficio Bruto De Explotacion Ebitda” | **12 006** |
| Non‑recurring gain – “Other gains losses” (gain) | – 995 |
| Lease adjustment | 0 (no operating‑lease expense disclosed separately) |
| Pension adjustment | 0 (employee‑benefits expense already includes pension cost) |
| **Adjusted EBITDA** | **11 011** |

**Step 3 – FFO (2021)**  

| Item (€ million) | 2021 |
|-------------------|------|
| Adjusted EBITDA | 11 011 |
| Cash interest paid – “Interest paid (excl. capitalised)” + “Interest paid (investing)” | 741 + 145 = 886 |
| Cash taxes paid – “Income taxes paid (operating)” | 832 |
| **FFO** | **11 011 – 886 – 832 = 9 293** |

**Step 4 – Adjusted Debt (2021)**  

| Component (€ million) | 2021 |
|----------------------|------|
| Core financial debt (non‑current + current) | 31 179 + 9 984 = 41 163 |
| Hybrid capital instruments | 525 + 100 = 625 |
| Capital‑lease obligations (non‑current + current) | 2 253 + 158 = 2 411 |
| Other financial liabilities (non‑current + current) | 1 545 + 2 980 = 4 525 |
| Underfunded pension liability (employee‑benefits provisions) | 1 592 + 27 = 1 619 |
| **Total before cash** | 41 163 + 625 + 2 411 + 4 525 + 1 619 = 50 343 |
| Minus cash & cash equivalents | – 4 033 |
| **Adjusted Debt** | **46 310** |

**Step 5 – Ratio 2021 – Adjusted Debt / Adjusted EBITDA**  

\[
\frac{46 310}{11 011}=4.21\text{x}
\]

**Step 6 – Ratio 2021 – FFO / Adjusted Debt**  

\[
\frac{9 293}{46 310}=0.201\text{ (20.1 %)}
\]

---

**Step 7 – Adjusted EBITDA (2022)**  

| Item (€ million) | 2022 |
|-------------------|------|
| EBITDA (reported) | **13 228** |
| Non‑recurring gain – “Other gains losses” (gain) | – 911 |
| Lease adjustment | 0 |
| Pension adjustment | 0 |
| **Adjusted EBITDA** | **12 317** |

**Step 8 – FFO (2022)**  

| Item (€ million) | 2022 |
|-------------------|------|
| Adjusted EBITDA | 12 317 |
| Cash interest paid | 1 495 + 189 = 1 684 |
| Cash taxes paid | 1 055 |
| **FFO** | **12 317 – 1 684 – 1 055 = 9 578** |

**Step 9 – Adjusted Debt (2022)**  

| Component (€ million) | 2022 |
|----------------------|------|
| Core financial debt | 36 129 + 10 458 = 46 587 |
| Hybrid capital instruments | 576 + 87 = 663 |
| Capital‑lease obligations | 2 287 + 151 = 2 438 |
| Other financial liabilities | 1 534 + 5 058 = 6 592 |
| Underfunded pension liability | 1 226 + 42 = 1 268 |
| **Total before cash** | 46 587 + 663 + 2 438 + 6 592 + 1 268 = 57 548 |
| Minus cash & cash equivalents | – 4 608 |
| **Adjusted Debt** | **52 940** |

**Step 10 – Ratio 2022 – Adjusted Debt / Adjusted EBITDA**  

\[
\frac{52 940}{12 317}=4.30\text{x}
\]

**Step 11 – Ratio 2022 – FFO / Adjusted Debt**  

\[
\frac{9 578}{52 940}=0.181\text{ (18.1 %)}
\]

---

**Step 12 – Credit‑trend assessment**

| Signal | 2021 | 2022 | Change | Interpretation |
|--------|------|------|--------|----------------|
| **Leverage** (Adj‑Debt/Adj‑EBITDA) | 4.21 x | 4.30 x | **+0.09 x** | Within ±0.20 x → **Stable** |
| **Coverage** (FFO/Adj‑Debt) | 0.201 | 0.181 | **–0.020** | Within ±0.03 → **Stable** |

Both signals point to a **Stable** trend. The leverage ratio rose only modestly (well below the 0.20 x threshold) and cash‑flow coverage fell by less than the 0.03 threshold, indicating no material deterioration.

**Final answer**

<answer>Stable</answer>