Tecnicas Reunidas Sa Ord

Good afternoon, and welcome to TRS 2023, nine months results presentation. It will be conducted by our chairman, Juan Yadó, and our CEO, Eduardo San Miguel. It will last approximately 20 minutes, and you will be able to post your questions after the final remarks. And I'll read the floor to our chairman, Juan Yadó.

Hi, hello, everyone. In today's presentation, as usual, Eduardo and I will drive you through our a summary of TR results and the more relevant milestones achieved during this last third quarter. Through these presentations, we'd like to transmit how TR step by step is consolidating its recovery and getting ready to fully benefit from the promising future ahead of us. The last nine months, We have successfully worked on our critical fronts, financial, commercial, and execution. For this particular quarter on the commercial front, we have accomplished several major achievements that deserve to be explained in detail. And I will personally drive you through these achievements. And then Eduardo will follow with a successful progress of track. or energy transition business unit. And obviously the financial figure for the period. And finally, I will conclude with the guidance of the year. Let's just start with the more relevant awards focusing in the natural gas and pet chem segment. As I'm sure you will remember, we reported our first half results on July 28th, and up to that date, we had booked slightly less than 2 billion euros in awards. However, at that time, we highlighted that we would prefer bidders and also were placed for another 4 billion euros of additional awards. At that time, jobs were at the tip of our fingers, but not ready to be announced. Nevertheless, that day, 20th of July, we gave a guidance of awards of 5 billion euros. Today, things has changed. I'm happy to share with you that of today, our awards have more than tripled since our last webcast, increasing from 1.8 to 6 billion euros. In the summer period, we were selected by APNOC for its key development of Meram, And also by Qatar Energy for strategic projects that are carrying out in the Ras Laffan industrial city. And then I will go over these two awards in a minute. Moreover, in the last few weeks, we had received a letter of intent of an award for a major strategic natural gas project in the Middle East. And it's a job worth 2 billion euros for TR, that's TR State. This project has already been launched internally and we will share all the details with you as soon as we are allowed. Finally, our strong commitment with TRAC, our energy transition business is starting to pay off much above our expectations that we had by the end of the year. But Eduardo will go over this and we'll get into details in just a minute. All of this implies that we are doing better than the guidance of 5 billion plus that we showed in our Q2 webcast back in July, July 28. And now, let me drive you through our main recent awards. In August, ADNOC awarded, as I've said, the complete development of the MIRAN project in a GV between TR and NPCC. This key project is focused on maximizing the ethane recovery from available residue gas, thus allowing ADNOC to expand capacity under several existing petrochemical units. The overall investment for the complete project amounts to $3.6 billion. 50% is for TR and another 50% to NPCC. with whom we're extremely happy to partner. MPCC, which has been recently rebranded as NMDC Energy, is a major local EPC player with its headquarters in Abu Dhabi, and it is majority owned by the state of UAE. It is worth mentioning as well that TR and MPCC have been successfully working together since September 2021, through a firm agreement signed for the development of front-end design projects for a customer ad hoc. By joining efforts with NMDC Energy, the new name of NPTC, we will together best manage execution and therefore risk in a much more, in a very important and large investment that we have to execute for ad hoc. We do have a very good partner. Furthermore, as well this summer, Qatar Energy awarded Tecnica Ronidas the Balance of Plant of the Northfield Project in Qatar. The Balance of Plant Award represents the fourth one in a row in the last 24 months, which demonstrates the consolidated partnership that TR and Qatar Energy have built over the last two years. The project consists in the development of several facilities that will have to be connected and will connect the southern part of Ras Lathan Industry City to the new LNG storage tanks and to all the active facilities located then in the northern part of the Ras Lathan Industry City. And the value of this new contract, as I said, is the first contract awarded this year, I mean last 24 months, sorry, a month for more than $560 million. And on this project, we can best manage the risk and we will manage the risk correctly as the scope of work is part. In fact, it is an addition of package three job, which is already under execution by TR. Finally, I'd like to focus on two projects of great future importance for TR and that have not been already announced. The first one is a front-end design for a Capco. Capco is Qatar Petrochemical Company. In terms of value, a front-end design does not represent a big addition to the backlog right now. However, quality wise, it is very important. And why is it very important? First of all, because it's a front-end design on a PDH polypropylene plant, which confirms the confidence on TR's pet cam engineering design capacity. And second, because it's an award coming from a major petrochemical player, Qatar Industries or Qatar Petrochemical Company that will surely convert this front end design into an EPC in the coming future. The second award was announced by our customer at the very end of July. RWE, Germany's largest electricity producer, which awarded the development of a combined cycle to joint venture formed by Tecnica Unidas and Sensaldo Energia, the Italian and Saldo Energia. This facility will initially use up 50% hydrogen mixed with natural gas, with the potential to upgrade to 100% hydrogen as feedstock. The project has started with an initial phase where the client has to obtain all the required permitting after which DPC contract will come into force. And now let's go through this slide that all of you are quite familiar with. When I first showed this slide some months ago, I told you that I was convinced that 2023 was going to be a good year. And as you have seen, This has already been confirmed. Just in 2023, TR is bidding, as we will continue bidding, volumes that are going to amount about 33 billion euros, most of them related to the first investment wave of natural gas projects. These 33 billions cover not only the projects that have been awarded or will be awarded during 2023, But many of the projects that our clients will sanction and most likely award during 2024. But this investment cycle is definitely not over. In 2024, as you see in this slide here on the right-hand side of the screen, we already expect to submit new bids for about another 30 billion euros. There is a main change here. The main change is that the composition, the composition of the contracts. We're now petrochemical and low-carbon technology project is starting to gain momentum. And most important of all, PR will continue to be very selective in our bid during 2024. We'll be selective with the right jobs, the right customers, and the right partners. And as I said in my note, we'll focus on profitability and risk management. And let me continue with another very important achievement, important milestone reached in this last third quarter, and that is our strategic agreement with Sinopec. At the very end of this third quarter, TI has entered into a key strategic partnership with Ready Partner and Sinopec, one of the most relevant players in our sector worldwide. This is an alliance with a strong benefit for both parties due to our complementary capabilities and the extraordinary joint EPC player that we become together. And this is very important. I'd like to underline that. We, together, have jointly identified more than 20 bits in different parts of the world, such as the Middle East, North Africa, and South Asia. With a combination of TR and SinoPAC efforts, I'm convinced we did this for sure to our successful outcomes. And now, after this, let me leave the floor to Eduardo to guide us through the latest developments on track in our

Thank you, Juan, and good afternoon, everyone. As Juan says, I will conclude now this first part of the presentation that we have called Main Achievement with an update of the latest developments of track, our energy transition unit. We can proudly confirm that our 2023 goals for track have been fully accomplished. Let me analyze them one by one. First, we have reached 600 million euros in awards, more than 10 times the figure achieved last year. To be honest, we have excelled our initial expectations. We are talking about a volume of man hours equivalent to those man-hours needed to develop LAMSAN projects amounting close to 2.5 billion euros. And I also want to stress the expected bids for 2024 will be five times higher than the volumes we had in 2023. Second, we have fully established our new platforms in order to strengthen our position in the main hubs of investment of energy transition. On the one hand, we have launched our US platform through our new track office in Houston, Texas. On the other hand, as we have already announced, we have reached a very important agreement with IFC to develop projects in Eastern Europe. We are extremely confident that both platforms will contribute to secure a volume of significant award in the upcoming future. Third, under our diversification strategy, we have achieved relevant milestones in the process of penetrating the steel and cement market. The volume of investments in those two industries in the carbonization will be similar to the volume of the energy sector. In fact, We are extremely proud to announce the award of the biggest decarbonization project up to date in the steel industry in Europe. For the time being, we are unable to disclose the name of our client under terms of this major award, but I will try to give you some color about it in a specific slide later. As you all know, one of the main goals of TRAC is the development and structuring of energy transition projects from scratch. In this sense, CR has already identified a fast-emerging project development pipeline with more than 4 billion euros in new opportunities. And last, but relevant as well, we are taking solid steps in offering carbon management services to our clients. In this regard, we have reached an important partnerships for carbon transport with Ecolog and for its storage with Estorenga. Let's analyze now the most important awards that TRAC has received in the last quarter. As I said before, we are proud and excited to announce that one of the major steel players worldwide has relied on Tecnica Ronidas to carry out the major decarbonization investment in Europe up to date. It consists on the decarbonization of four of their most relevant facilities located in three different countries in Europe. The contract is structured into stages. The first one includes the fit, purchase of the main equipment, and soil preparation works. The second stage will cover the detailed engineering, the procurement services, and construction supervision. To give you a hint of the size of the facilities we will be working for, I would say the joint production of these four facilities amounts for about 15 million tons per year. We have another two important awards in the energy transition segment that we include in this slide. I do really regret not to be allowed to disclose the name of our clients again, but as you can imagine, they are key strategic projects and our customers prefer to remain anonymous. The first one is an EPC for an e-fuel demo unit in Spain. The contact scope includes services, supply, assembly, pre-commissioning, commissioning, and support during the startup of the demo unit. And the second one is and basic and detailed engineering services for two green ammonia projects in two different locations in the Iberian Peninsula, one in Spain and the other one in Portugal. We hope to be able to disclose additional information in future webcasts if the clients authorize us to do so. And now, let's have a look to the financial figures for the first nine months of the year. In terms of sales, Tecnica Reneas continues to register quarterly figures of more than 1 billion euros, reaching 3.2 billion in the first nine months of the year. This figure implies an increase of more than 50% compared to the same period of 2022. The EBIT of our operations continues to grow and already stands at 4% in this third quarter of the year. The successful delivery of our project obviously is behind this solid improvement of margins on a quarterly basis. And let me highlight that this is the fifth quarter in a row that edit margin rose versus the preceding quarter. We're confirming Técnicas Unidas' positive trend in the last year. Moving to balance sheet figures, as you can see in the slide, The net cash position stands at a healthy 234 million euros level at the end of September. This figure does not include any down payment of the recent awards. We will be collecting those down payments soon, some of them before year-end, and we will pass part of these down payments to suppliers to secure a smooth launch of the new project. For the next month, we anticipate a certain stability, stability in our net cash figures, since our strategy today is to accelerate existing projects through enhancing our suppliers' cash cycle. We believe it is the most efficient way to drive forward the project scale and meet our clients' expectations. And now I will hand over the floor to Juan.