Tecnicas Reunidas Sa Ord

Hi, hello, everyone. Let's make sure we stay within our 20 minutes. The last ones, they were a bit longer. So in today's presentation, you have in front of you what you will be talking about. Eduardo, myself, will be driving you through a summary of our results of the first quarter, which is important thing of this 2023. I'm going to be starting with the race and rights issue. that have just been successfully closed. And then I'd like to go over the financial rationale and the key messages in our equity story that we have shared with many investors and analysts. And some of you were there. Next, Eduardo will move on to update you on our commercial activity and give you some color on the recent awards achieved in 2023. And right after that, I will go in more detail with the financial, not he will go in more detail, Eduardo will go in more detail with the financial figures of the quarter. And I will finish with a presentation of our guidance, and it's going to be the guidance for 2023. So let me start with the right issue. As you all know, Hopefully, you know, we have disclosed the $150 million capital increase that was announced to you right after Easter. First, I have to thank all our current shareholders, old shareholders and new ones, for placing the trust in the present and also the future of Técnica Unidas. I'm very much convinced that we will achieve the results that all of you expect and deserve. Let me go through the rationale behind the transaction. You know, as we wanted to get ready for all the major opportunities that lie ahead of us, the opportunity that the market is lying ahead of us. So we needed to get our equity up to the level that would give financial comfort to our main customers. And this is very important. We wanted to give comfort to our customers. We needed to be ready. With a 150 million euro raise, We are today at the equity level of 400 million euros, which is slightly above the average level of the period 2016-2019, which was the pre-COVID period, which is a period we were able to reach record level of awards from our very top customers. So that was the purpose, $150 million. Now let's go over the rationale of the rights issue. The sector, why the sector, and why technical remittance. I think it is very important to briefly summarize in this slide, again, our value proposition that was presented to investors. We do believe, we convince, the sector is in a special attractive situation. Both from the demand side, we're facing the largest investment wave you will have ever seen. And second, from the supply side, the sector, and we're very much convinced, is constrained by the scarcity of experienced engineering resources, scarcity on capacity. In this scenario, Tecnica Ronidas can take full advantage of these engineering credentials with our top clients and reached now a new level of profitable growth. We have the resources as we kept intact our core engineering during the crisis. And we are already taking the clients, talking with our clients about a pipeline of very well-defined projects that is larger than ever. We're talking to them on a very big and very well-defined pipeline. This is important to underline that. This includes both our traditional products with our clients, but also it starts to include the large new opportunities that arise from decarbonization needs. Needs that come from our existing customers and also from clients in new sectors such as steel and cement. I do believe, and we all believe, that it's a unique opportunity to grow, but we want to make sure that we grow profitably and safely. It has to be a healthy growth. With this goal in mind, the company is focusing its efforts into risking its backlog through different strategies that we have presented through the different roadshows we've done, and on launching different waves of efficiency programs to optimize our costs on operations. This is just a brief summary, and in a nutshell, this is a roadmap for the future of TR. And now let me give the floor to Eduardo.

Okay, thank you, Juan. Let me give you now some color about the project we have announced the first month of 2023, and also about the size and shape of our bidding pipeline for the next two years. In our last year end results presentation in February, we announced that TR was awarded a major LNG project in Europe, but we were not allowed at that time to disclose neither the client nor the terms of the contract. Well, now we can share with you that this announcement refers to the Hanseatic Energy Hub Reclassification Terminal that is being developed in Hamburg. It is an import terminal that will contribute to secure Germany's supply of LNG and green gases. The design and construction of this terminal will be developed by a JV led by Técnicas Reunidas that also includes the Spanish construction company FCC and the TACIS Enthroid. Within this JV, Técnicas Reunidas will design the regasification terminal and the two storage tanks. and will undertake all the equipment and material supplied for the project. The new terminal will involve a total investment of close to €1 billion, of which approximately €500 million will correspond to the scope of Técnicas Reunidas. Let me highlight, and it's important for me, that following our risk mitigation strategy, this is an award at the risk profile since the construction and assembly activities will be conducted by the other members of the consortium, FCC and Entred. We have also two important awards in low-carbon technologies. The first one, on the 25th of April, CEPSA and Técnicas jointly announced that TR will develop CEPSA's second-generation bioforest plant in Huelva, the largest project of this kind in Southern Europe. The total investment of this project will amount to 1 billion euros. Tecnica Ronidas will develop the engineering and will also manage the procurement and the construction of the plant. I want to stress that this project is huge, but again, it has been de-risked. as it will be performed on a pure service basis. Then, although the volume of the contract in terms of sales for TR is not comparable to a lump sum EPC project, the project has a better and more secure profitability. The second award regarding low-carbon technologies was announced yesterday. In this case, Técnica Ronidas has been awarded a contract for the electrification of two Repsol industrial complexes, one in Sines, Portugal, and the other one in Tarragona, Spain. The work will reduce energy consumption and carbon emissions at these two large chemical facilities, where TR will replace ethylene and propylene turbines with electric motors. Tecnica Ronillas will develop the detailed engineering, the procurement management, and the supply of equipment and materials. We are very, very proud that Repsol has once again entrusted TR with the execution of a strategic and technically complex project. And again, we understand it is well-derisked since it is only a service contract. And the low-carbon segment keeps moving fast. And we are happy to announce today that TR has signed a contract with the green fertilizer company Atlas Agro to develop a zero-carbon nitrogen fertilizer plant in the USA. It is a feat that potentially could become an open-book contract for Técnicas Reunidas. Let me also highlight, and it's again important for us, that the plant will use Tecnica Zuniga's proprietary technology for the main process units. In fact, it will be the world's first full-scale zero-carbon nitrogen plant, using only air, water, and zero-carbon electricity as feedstock. And we believe these four awards are just the tip of the iceberg, as Técnica Ronidas currently is facing the largest pipeline of its history, around 70 billion euros. This number is calculated not in terms of worldwide projects to which TR could be eligible. We are talking here about 70 billion euros of projects to which TR has been or is expected to be invited to bid in the next 20 months. In the slide, you see that the pipeline is highly diversified by products. Almost 40 billion euros in petrochemicals, more than 20 billion euros in natural gas, and close to 10 billion in low-carbon technologies. Summing up, we are convinced that we are at the beginning of one of the greatest investment cycles in the history of our sector. Obviously, final investment decisions and bidding calendars are in the hands of our clients, but we are convinced that the whole sector will see a steady stream of major awards from the second half of 2023 and onwards. With our regained financial strength, we are convinced that Técnica Ronidas will be at the forefront, capturing a share of this investment in accordance with our engineering credentials with major clients. And now I'm moving to the financial section of the presentation. Our quarterly results should not be a surprise to many of you, as we included in our capital increase prospectus some general guidance about the level of revenues and profitability for the first quarter. In terms of sales, TIAA closed the quarter with more than 1.1 billion sales. As we have highlighted in recent quarters, the 1 billion level is a threshold that is key for the operating profitability of the company. The EBIT stood at 39 million euros, posting a 3.5% margin. The operating margin continues growing because of three reasons. First of all, the return to pre-pandemic sales levels. The second one, the underlying profitability of our backlog. And the third one, our continuous hard work in terms of cost efficiency. And the net cash. The net cash position at the end of March 2023 stood at 142 million euros, consolidating the positive evolution of the underlying cash generation in recent quarters. And of course, this figure has grown recently with the closing of the capital increase. But let me reiterate that in the current environment, we think that a wise use of the cash available is to incentivize our suppliers to accelerate the project as fast as possible. This will allow us to reach milestones on time and to deliver projects to complete satisfaction to our clients. And now I will hand over the floor to Juan for the guidance.

Obviously, what you have in front of you is not a very creative slide. It is definitely a very solid slide. But before talking about guidance, let me conclude again presentation restating my gratitude to our shareholders. The very successful close of the recent capital increase, we have never been accomplished without the support and trust of all of you on TR. Now, after securing the financial flank, which is important, has been very important, we should concentrate on the key levels of our business. We have to contract, and we are contracting, as you see, at the right terms. We have to execute, and we are executing at the lowest cost and the best managing of risk. Because we have to deliver projects, and we are already delivering projects to satisfy customers, satisfy clients, that I'm sure we'll want, as Evolve is done, repeat business with us. For the year 2023, we reiterate our guidance. Given our current backlog, we do believe we can achieve, we're comfortable to achieve 4 billion euros in sales and 4% EBIT margin. That doesn't mean we don't want to grow. For the mid future, we have the determination to grow, but to grow in a healthy manner. We have to have a healthy growth. And we are convinced we will grow in sales, and with the objective to have solid, stable, and consolidated margin. That is a very clear message here. And after this simple but very important message, I'll finish this presentation, and we'll all be very happy to answer any questions you may want to address or pose. Thank you very much.