Tecnicas Reunidas Sa Ord

Hello. Good morning. This is Eduardo San Miguel. Before entering into the presentation, I would like to introduce you all Antonio Alonso Muñoz-Hierro, who is the new head of the Investor Relations Department of the company. He replaces Joaquin Peredayala, who from now on is the head of the Truck Energy Transition Unit. Thank you. Joaquin is with us today as well. Thank you. Thank you for your support these five, six years, Joaquin.

And now Antonio, you have the floor. Thank you. Thank you very much, Eduardo. And good morning, everyone. And it's a pleasure to have a chance to say hi to all of you. And I will do my best, along with Tomas, which you all know, to provide the best quality service you expect from this position. So thank you very much. And now, let me welcome to you to this results presentation of the first half of 2023. It will be conducted by our chairman, Juan Yadot, and our CEO, Eduardo San Miguel. It will take around 20 minutes, and afterwards, you will be able to address all your questions. So, Juan, please, you have the floor.

Hi. Hello, everyone. Let me congratulate Antonio Joaquin for the new challenges, which are good challenges, but also fun challenges. And I'm sure they're gonna do great. Let me start in today's presentation. Eduardo and I will be driving you through a summary of your results for this first half of 2023. And then I will start with a review of our commercial activity and what you can expect for the upcoming quarters. I will also update you on the recent evolution of TRAC, which is our low-carbon technologies new business unit. Eduardo then will move on to give you an update on the most relevant milestones recently achieved on our ongoing projects, our production, our execution, very important to us. And as usual, Eduardo will explain to you the financial figures for the period. And then, finally, I will conclude the presentation with the guidance for 2023. Start with the commercial activity. This is, to me, a rather large and complex slide. So, let me walk you through this slide. As I went with it to share our convention, this is going to be a great year for TR on the commercial front. a year in which high-quality awards will comfortably surpass our annual sales, a year that will confirm our good times ahead of us with what we call the investment super cycle. And we call it that way when we did our capital increase not that long ago, and it's happening. In the slides that we showed to you three months ago, we stated that we were facing the three largest pipeline ever had. We were reaching, and we're still there, close to $70 billion for the next couple of years. And that's the pipeline that we maintain. But let me do a further analysis. Only in 2020, TR is expected to submit bids for a total of 26 million euros. And let's do a breakdown of this. The breakdown is that 13 billion in natural gas projects are already presented, more than 10 billion in petrochemical and refining development, and almost 3 billion in energy transition projects. Those are the 26 billion altogether that we have to present and we are presenting in 2023. So out of this, what are we now? What we have already done? As of today, TR has already submitted bids for a total of 11 billion euros altogether with the three weeks. The bids follow the expected sequence of investment weeks that we have showed to you in our last presentation. We have the first wave of natural gas, petrochemicals, and low-carbon technologies. And even more important, as of today, I can confirm, and this is very important, that within these 11 billion euros that we have already submitted, this is very important, first, we have been declared prohibitors in projects for a total of 1.8 billion euros. Being selected prefer bidders signifies that we are already negotiating final terms with our customers. And second, as important as the first point, we have been declared frontrunners in additional bids for an additional amount of 2 billion euros. Being a frontrunner really is As I said to my team, it's for us to lose. We should win. I mean, we have to get those jobs. Therefore, I can be very optimistic, and I am optimistic, to deliver to you good news in the upcoming months from the bid that we have already been presented. We are being selected as pro-runners and pro-providers. But more is also important. This is not the end. We're still going to submit bids for another 15 million euros from now to the end of 2023. So in this regard, let me stress that TR is not a short-term business. This is not a trading business. This is a long-term business, and we have to manage it as such. It pays to the, you know, it pays to the company, to our shareholders, to all the stakeholders to be patient. And we will be patient and selective. Patient and selective to be well-selected. And we are being well-selected. And we're striving to get a high-quality and profitable backlog. We have been patient because we think that the projects we're currently negotiating, and this is very important, are the right ones for TR. So the projects that we want to have. So the ones that better fit our know-how or capacity, and they're consistent with our risky strategy. And therefore, they're the ones that will deliver stronger and more stable margins. So after this complex and dense slide, let me do a wrap-up with a simple one. Now with a simple slide, let's do a recap of the full picture of a commercial situation. And sorry for repeating myself on and on, but I think it is important to have a crystal clear picture of this commercial outlook for the year. In the first month of the year, we were awarded the new fertilizer plant that CasaLoc is developing in CasaStanis. We were also set to develop a new recalcification plant in Germany, very important one. And that was, you know, that was 0.5 big euros. But if you remember well, we put together the deal with the two construction companies that we trust more, for both civil and mechanical. And we have put together a very good and, you know, which will be a very successful deal. And furthermore, we secured through track several key energy transition projects for clients very important to us, you know, always all-time clients such as Cepsa, Repsol, and Atlas Agro. All in all, we have already secured 1.8 billion euros in awards. On the other hand, within the 17 billion euro pipeline, we have already put forward rates for another billion euros. And the outlook looks very positive. We have been selected as preferred bidder for 1.8 billion in awards, and we should be announcing awards, those awards, very soon. And we were very well placed. We were extremely well placed in more than 2 billion euros of other new projects, which we have to really focus with our customers because as I said to my team, it's for us to lose. In conclusion, we are very comfortable. I am very confident in surpassing the 5 billion euros threshold in terms of new awards for 2023. As I know we will be stating later, this confidence will lead us to include this figure as we haven't done it before as part of our guidance for this current 2023 year. Let me now move, which I think is important, to the last wave. It is very important. It's the last wave, and eventually it becomes a truly important wave. Let's move to track. And I will explain how the hardwood of track here now, with his low-carbon technology business unit, is already bearing fruit in all many different fronts and technology. This slide has, we're extremely busy. You can see we're extremely busy in all dimensions of the low-carbon technology. In this slide, we have just selected a sample of the results of our intense work in this business, in this way. Up to the first quarter, results presented Back in May, we had already announced three important awards that I'd like to repeat as that I do believe is very important. We were awarded and it potentially converted into a large open book for a green fertilizer company, Atlas Agro, to develop a zero-carbon nitrogen fertilizer plant in the USA, which would include CHOS technology in nitric, you know, and fertilizers. Two, very important as well, in this case it's engineering, it's not volume but quality. You know, we've been awarded the engineering, procurement management and construction management to develop for CEPSA, for good customer, the second generation biofuels plant in Welva. And this happens to be the largest project in this kind in southern Europe. We happen to be an engineering company working intensively with them. We have already started. And finally, with our good customer, Repsol, we are awarded the engineering plus procurement and management of all the electrification of two very basic petrochemical complexes for Repsol, one in Portugal, Cines, and the other one in Spain, which is the first step to decarbonize petrochemical products. And you may be wondering what have we done, you know, the last two months. And things are happening. It happened very rapidly. And that's the message that I want to, you know, express in this presentation. A memorandum of understanding, we have signed a memorandum of understanding with the IFC, which all of you know that is the World Bank subsidiary for the private sector. and the objective is to develop carbon technology projects in Eastern Europe. IFC is one of the biggest financiers, you know, in developing the private sector, you know, all these industries, and we've put together a very intense and collaboration memo about the standing. The collaboration seeks to support the development of projects and facilitate a transition in low carbon technologies which will promote the carbonization of carbon in all the intensive industries. Obviously, we'll have to work very hard in the things that we are very strong. We'll include hydrogen and all its derivatives, biofuel and all these alternatives, and the different technologies for low-carbon units. This agreement is relevant as the investment in Eastern Europe countries indoor carbon technologies are respected according to external analysis to be more than 35 billion euros in the coming years. And also it's important to say that all these countries produce about 35% of the total CO2 emissions in Europe. So we have a lot of work to do and a very good memo of understanding in time. We're working hard. You might be wondering what happened with the U.S. that we talked to you before. We already have the premises. We have opened the premises. We're extremely busy and growing, and we have already hired a new leader, and we are building up the project saturation team to take advantage of the attractive regulation that the U.S. has already put in place. So we are already there. We have been working. And finally, we have another award. Unfortunately, I cannot disclose the client. It's a good client. It's a client with whom we have worked before and we know extremely well. And we have been awarded the Engineering Services for a very green ammonia, very green, I'm going to say, a very big ammonia project in Europe. We will be announcing this award soon. as our customer allows us to do so. And having done so, now it's time for Eduardo to move on with our production and numbers.