Tecnicas Reunidas Sa Ord

and welcome to Técnica de Muertos 2023 results presentation. It will be conducted by our chairman, Juan Yadó, and our CEO, Eduardo San Miguel. It will last approximately 30 minutes, and you will be able to post your questions after the final remarks. And now, we'll move forward to our chairman, Mr. Juan Yadó. Hi, hello, everyone. In today's presentation, My daughter and I will guide you through a summary of the most relevant aspects of 2023, the full year, which I do believe has been an extremely important year for TR. I will start with the quick plans of the main figures that we have achieved this year, and then follow with the very important issues that have taken place this year, having to do with awards backlog, And then Eduardo will follow with a financial review for 2023. To finally conclude with our next steps, and I'll give you the guidance for 2024. So let's just start with a quick look at 2023 main figures. If you take a quick glance at this slide, they have six indicators. Net revenues, EBIT, net income, net cash, year-to-date backlog, and reporting awards, year-to-date.

In 2023, sales were again above 4 billion euros.

And I do believe, you know, 4 billion euros volume is important, no doubt, having reached the 4 billion, the deficiency and profit is far more important. So we move to the next number. This 4 billion, 4.1 billion, has resulted in an EBIT of 157 million euros, with a 4% EBIT level in the second semester of the year. And net profit has returned to positive to 60 million euros, along with the net cash position that has increased to 348 million euros. And finally, the last two numbers. ER's year-to-date backlog has grown to 11.4 billion, thanks to awards of 6 billion. year-to-date, most of it through the last quarter of the year. So we will look through all these numbers, backlogs, and sales through the presentation, but allow me first to take a minute and talk about the latest award that has been announced in January, the RE-ASH project for Saudi Aramco, which I do believe is important. This project, as I said, was formally signed in January 2024. We announced it, you know, at the end of November after receiving the letter of intent with a very clear mandate to launch the project. Every day counts. All of that was signed and contract came into force in January. The total investment of these two contracts, in fact, the two contracts, amount to more than $3.3 billion, of which TR's scope is worth 2.2, which represents 65% of the overall contract value. As these contracts, as you know well, were awarded to June Venture of TR and Sinopex, with the mandate, the scope, to develop new natural gas fractionation facilities to increase the capacity by 510,000 barrels per day. This project is very important to note. We will have to devote more than 575 engineers, of which 75% of those engineers will come from TR. It's also important to highlight that this is the first successful award, the first successful outcome of the strategic alliance that we have signed with Chinopec last September. And let me finalize saying that we're truly proud to work with Aramco in such a strategic investment. And with this job, we continue, we keep consolidating a very fruitful relationship that we started back in 2003, August 2003, to be precise. And let's now dive into a 2023 business performance. Here we have a slide with two parts. As we begin in 2023, on the first presentations, we discussed about the super investment cycle that was ahead of us. We announced there was a year of a lot of bidding and most likely important awards. Today, as you can see on the left-hand side of your slide, we close the year-to-date figure with a backlog of more than 11 billion euros. N is not the number, but you have the logos, a six billion awards from the right customers, the right sectors, and reporting, all of them with high technological value. So let's focus on the logos. Let's focus on the right-hand side. On the very top, you see our very large national companies, our customers, Saudi Aramco, ATNOC, and Qatar Gas, with whom we work on the natural gas development. Then, it's important to say that we have been awarded and we're retaining successfully petrochemical jobs and fertilized opportunities, fertilized projects. And at the same time, we're taking important strides on key, very important decarbonization projects as the one we start, just small examples, with Cepsa, Repsol, and Atlas Agro. I also think it's important to note in this slide that the two projects in Germany, the LNG terminal and the combined cycle, for Hanseatic and RWE, are both hydrogen-ready. And what I mean by that, that now more than ever, quality of process engineers is more important than ever. Engineering is a must. So related with engineering, let's move to the next slide. We see today that we have become a technological player for our customers. Our customers engage with TR in the early investment decision stages where the projects are shaped and defined from a very technological process point of view. The client has seen how TR delivers the project, so we can see together, we can see for example, for many years, and now they're increasingly entrusting us in testing TR with front-end engineering designs and very early engineering works, and this is important to note. As you can see in this slide, and this is quite impressive, over the last two years, It's a clear demonstration of this change of perception about what TR can offer. TR has been awarded with more than 50 service contracts. All of them are new added. This is a clear sign that we are on a huge investment wave. It's a clear sign of investments upcoming in the future years. And it's very much in light with the strategy we have already announced, GR's strategy of devoting at least 30% of its engineering capacity to high technological service contracts. And having talked about engineering and technology, let's do an analysis of the backlog. So let's take just a minute with the backlog broken down into business segments. In this slide, you can see how TR business is evolving during the last three years. It is a clear and sound shift from refining to natural gas and petrochemical, and you see at the end, to low-carbon technologies. We have been talking about these investment waves throughout the whole year, and now, as we have anticipated, they're becoming a reality. We are currently in the middle of the natural gas wave, as confirmed by the 2023 awards, which more than 90% are part of this natural gas segment, which are needed and very much needed if we want to move into petrochemicals. It is the pitch talk. Step by step, the petrochemicals are also coming. We're working very much on service contracts and lump sum petrochemical contracts. But you will see, and we are convinced, because that's the pipeline we're bidding on, that we'll be gaining weight through 2024 and 2025. And very important, low-carbon technologies awards are increasing year-over-year, and they're increasing faster than we had expected. As previously discussed, major investment decisions will take place in 2025. Today, we're working with our customers on content designs. We have announced recently competitive fits. We're developing fits. And in some cases, in Spain, we're already into full-detail engineering jobs. But nevertheless, it has little weight. on the backlog. That is taking a large percentage of our technology and engineering capacity. Our track division is therefore consolidation is positioned with an extremely large list of opportunity, which is all coming up, and we'll see how they translate into solid jobs in 2024 and 2025. So this is And let me now spend a little time about operations with four jobs. Because beyond a successful commercial activity, I am proud, and the whole team is very proud, of the achievements accomplished by operations team. It has been extremely difficult for years. And I would like to focus on four projects. Three of them have been delivered to our customers in Saudi Arabia, United Arab Emirates, and Oman, and another is under execution in Singapore. So let me start with the Saudi Arabian project, Saudi Aramco, the Harad project. NTR is extremely proud to be part of Aramco's upstream ambition to double the gas production. This is a very strategic project, the one they have delivered. They want to double by 2030. They want the gas production. And this project, which is located in Saudi Arabia, Eastern Jersey region, in a very remote location, will allow Aramco to rise the kingdom's daily gas production by 1.4 billion standard cubic feet per day. And we also expect to have 20 production years, 10, 20 years, to three non-associated gathering awards, lying within the world's biggest onshore oil fields and 15 surrounding fields. We're very proud to be part of South Ramco strategic investments. And by the way, this project has also served to train a team of 15 young, self-driven project engineers for future leadership roles in upcoming projects. It has been a very important project for SAGRAMCO and a very important project for TR. This project is extremely challenging as it's a composition of nine different compression stations, nine different sites separated by hundreds of kilometers. that despite all the logistic challenges, but that's a challenge, but that's what we are really good at, we have to go through the years 2020 and 2021. And I guess all of you know what that means. And the project on 2023 was very successfully delivered to our customer, Saudi Aramco, to full satisfaction. And now let's move to Oman, and this is important. The Indukul project was awarded to ourselves, the construction of Tiara and Daewoo in 2018. Again, it's a project that has to be developed, designed, and constructed through 2020 and 2021. Again, you know what that means. the good news is we were working for the national company of kuwait in the national company of one other man both together under the name of all kuwait and i have you know and i'm happy to say that during 2023 the ducum refinery started its initial operations in that february 7th I was very happy to attend the opening ceremony of the refinery. It has been a pleasure and it's a pleasure to continue working with Oman National Oil Company and Kuwait National Oil Company in Oman. And let's move to another very emblematic project and very important project for us. In this case, in the United Arab Emirates. It is called the SeaWorld Project. The project was signed in May 2019. Again, a hint, it was signed right before COVID. And after a successful management through the two difficult years, we received in May 2023 a commercial operations certificate. The project was successfully delivered. The full price of this job was about $1 billion. And it was executed in joint venture and construction with GE, a long-term strategic partner. So here's an example of a successful project in a good country with a good customer and with a very reliable long-term partner, GE. And then we finalized with ExxonMobil. With ExxonMobil, we're finally in Singapore. As we have informed in previous webcasts, this project is an expansion of Exxon's Singapore refinery, and it was converted into EPC Lumsum early 2019, after about a year of competitive fit. And one of the biggest challenges of this job than we have successfully achieved is the fact that it has been constructed in models in two different yards in Thailand, and then those process models, not simple models, have to be shipped to the final site in Singapore, where they have to be assembled. And we have to say there are 20 models and 19 of those have already taken place. Furthermore, one of those models, and this is important to highlight, is the heaviest model ever built by TR. It's as big as 4,200 tons. And let me talk about safety, because this project is a very good example of our continuous effort on improving our safety standards in our operation. having already reached 30 million safe man hours at both yards and 10 million at the site. So here I have to thank everyone, PR, customer, construction partners, yard managers, everyone. It's a success story. And now after these four jobs, let me leave the floor to Eduardo. Okay. Thank you, Juan, and good afternoon, everyone. The year 2023 has been a year of delivery. Juan has been talking about projects, delivery, and I will elaborate later on about our margin delivery as well. Above anything else, I believe 2023 has been a year in which TIAA has built solid foundations that will contribute to growth and profitability in the short future. Let me now review the five key strategic milestones TIAA has achieved throughout this year.

The first milestone is the outstanding evolution of track.

our business unit for low-carbon technologies. We have been working very hard in decarbonization this year, and I would like to share with you a number of landmarks that are described in this slide. Starting with the website, TAC has been awarded in 2023 more than 600 million euros in engineering services. We are talking about a strategic project where TR has assisted its clients in shaping and defining their decarbonization developments. Also, TRAC has built a comprehensive network of partnerships with licenses and technology providers in the products where TRAC is focused. Hydrogens, biofuels, carbon capture, steel, and cement. FLAC has launched this year new platforms for growth in selected geographies. In this sense, they have opened its Houston office, devoted to capture the U.S. market, and have signed an agreement with the IFC to provide financial support to the Carbonize project in Western Europe. And eventually, on the right side, Crack has widened its range of services by offering projects from scratch development services to our clients and interior carbon management solutions. As I said before, it's been a hard year, but with very good results. The second key milestone is the strategic partnership signed between PR and Sinopec at the end of 2023. Sinopec is one of the most relevant players in our sector worldwide, not only because of its technical competence, but also because of its availability of human resources. This alliance has strong benefits for both parties due to our complementary capabilities and the extraordinary joint EPC player that we become together. We have jointly identified more than 20 bits in different parts of the world. The very first successful outcome from this alliance has been the award of the Reject Development for Saudi Aramco, announced this past January. This project, worth more than $3.3 billion, is the first of many that will come in the future. In fact, since we signed this alliance, we have jointly submitted six bits, and we are progressing in five additional bits during 2024. We are certain, we are certain that this alliance will bring us important additional achievements in the upcoming years. The fourth milestone has to do with risk mitigation in New York. PR has written its strategy to be very focused on construction risk management during the commercial stage. You are more than aware, but let me remind you once again the four strategies that we are trying to always implement to mitigate the risk in our backlog. First, increase the number and volume of service contracts. Our goal has been to allocate 30% of our engineering capacity to this type of contract. Second, to pursue projects with no construction scope, such as EPCs or EPCM contracts, in which we only take the role of construction management. Third, to contract EPCs in which they are previously carried out early engineering activities, such as the front-end engineering design, the FIPS. On fourth, to partner in JVs with experienced local construction companies or with other engineering companies to share the risk. To analyze the results, they have been quite remarkable. You can see in the lower part of the slide that in 2023, 90% of the new award includes at least one of the four measures I have listed. almost doubled the figure we had in the 2015-2020 period. The full milestone is related to the growth of TR's resources. As Juan has explained, it has been the first year of solid delivery after COVID, but it has also been a very challenging year since we have been able to recover the ordinary size of the group in terms of manpower while keeping the coasts under control. As we outlined in previous webcasts, we reacted to the pandemic by preserving our core engineering capacity in Madrid, but cutting down our construction supervision staff. Once we realized early in 2023 the super cycle was coming, we took several actions. First, we expanded our engineering resources, both in our technological hub in Spain and in our satellite offices abroad, mainly in India. Second, we recovered the supervision staff needed to complete the project under construction. And third, we contained our overhead costs despite our staff, our revenues, our commercial activity is in the middle of a very expensive phase. In this slide, you can see the outcome of these decisions. In the last two years, we have increased our engineering capacity more than 25%, and at the same time, we have managed to decrease 5% our overhead costs. And the last milestone has been the strengthening of our financial profile. With the successful 150 million capital increase carried out in the second quarter of the year, and with the 92 million euros of organic generation of equity derived from the positive results reported, PR equity stands now at 325 million euros. If we include the hybrid loan, our long-term equity equivalent resources are far above our pre-pandemic levels. Moreover, the balance sheet leverage is being progressively reduced. In 2023, it decreased 40%, and new reductions will come in 2024. Finally, our net cash position is steadily improving. Not only through the capital increase, but most important, from the better payment conditions, we are agreeing with our clients in the new awards. By far, our financials are definitely stronger than the financials we had one and two years ago. Let's now move to the financial figures. Figures of the period. In terms of sales, the figures remain above the minimum threshold of 4 billion euros per year that allows the company to deliver solid margins. The reduction of revenues compared to the previous year has mainly to do with the late awards of the Meram and Regas projects that have contributed less than expected to the 2023 figures. The EBIT, which is 157 million euros, This figure continues to grow on a quarterly basis and already stands at a 4% in the second half of the year. The net cash position as of December 31st stands at a healthy $348 million, and the gross debt has increased in 116 compared to the year before. Let me remark that this is the sixth quarter in a row that EBIT margin rose versus the preceding quarter. We're confirming this positive trend. There are several reasons behind this positive recovery, but let me highlight three of them that we have already covered in this presentation. First, the proactive risk mitigation strategy. Second, the successful delivery of projects to our clients. And last, the strong cost-efficiency mindset here has landed throughout the whole company.

Okay.

In this slide we show the P&L of the last two years. We have already elaborated about revenues and EDIT. The financial result we show in this slide has been adjusted to exclude the extraordinary item of 15.9 million euros related to subsidiary liquidation during 2023. It is a non-cash item with no equity impact. So going back to the 36.9 million euros of financial costs, 8 million out of this 36.9 have to do with the impact of hyperinflation accounting rules for Argentina and Turkey. And then, the remaining 29 million euros is consistent with the agreed cost of our financial debt. Regarding income taxes, the effective tax rate is 36%, and it's a consequence of the mix of tax rates of different countries applied on the profits or sometimes the losses obtained in those countries. Moving to the balance sheet figures, as you can see in the slide. The net cash position stands at €348 million, implying a 120% increase versus the same figure of 2022. To give some additional color, the improvement of the net cash is the result of both an 8% increase in gross cash and a 14% reduction in the gross debt figure. Regarding the repayment of the loans, ordinary and hybrid, granted by CEPI through the program FASA in 2022, there was not repayment scheduled in 2023. The first tranche of the ordinary loan has been repaid in February 2024 amounting 33 million euros. Thank you. Now we are moving to the final part of the presentation. I will introduce you the next steps of TR for the upcoming future, while Han will conclude with the guidance for 2024. Okay. Over the last two years, we have established a clear strategy to recover TR's operation and set the foundations for the future. And I am sure this presentation serves the market. We have been quite successful in those two tasks. For 2024, we don't want to leave a focus in the business, but we are aware we need to make an extra effort in translating the good performance into value creation for our shareholders. Obviously, a solid delivery of margin is needed, but we also want to emphasize we are setting three goals. The first one, prioritize the cash generation in our balance sheet. There are obvious limitations to this policy, since our suppliers cannot offer cash constraints to fulfill their obligations. But the full normalization of the business should deliver solid improvement in cash generation. The second one, expand our engineering services activity. In the past, we have been involved mainly in EPC projects. But today, we realize clients also perceive technical engineers as a solid provider of purely engineering services. We have to take advantage of this new scenario and consolidate a very strict and profitable business line of this activity. And third, to remain leaders of the energy transition is a must. It is not only a great business opportunity, but it also makes the company attractive for good professionals, financial investors, lenders, and public institutions. As I said, we will be very focused in these three goals. And now I pass the floor to Juan to finalize the presentation. Thank you very much, Eduardo. And as usual, let me conclude today's presentation with our 2024 guidance. We have always considered and we have always said that 2023 and also 2024 should represent two important years of recovery. Two years in which we have to, we will, and we have done so, strengthen the company in adjusting and adapting to the new COVID market needs, and we have done so. In this sense, our guidance for 2024 contemplates a level of 4.5 billion euros of sales and a solid, and we underline that, 4% EBIT margin. Some people, you know, may think that that means that we don't want to grow. We grow in sales and we have a solid margin. And it's not true. We want to grow. And we will grow as long as the market allows us to grow. Let me tell you, we grow of all this, as Eduardo has said, within the acceptable risk, cash generation, and healthy margins. And let me finalize reminding you that we'll be hosting the Capitalist Market Day from the 22nd to the 24th of May in Abu Dhabi. I think it will be a very good opportunity. I've written here unique, but it's going to be unique, and very good opportunity to give you additional insights and color in all the strategies and tactics and strengthening of TR that we're working to prepare ourselves for the future. So we really hope to see you all there, and now I'm done, so I'll be more than happy, all of us, to answer any questions. that you may want to post. Thank you very much.

Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star 1 on your telephone keypad. Thank you.

Your first question comes from Nick Pickup with Barclays. Please go ahead. Mick, pick up, your line is open.

Hello, I'm back here now. Hello, it's Mick here from Barclays. A couple of questions, if I may. So, one, can you just talk about that drop in revenues in 4Q? I think it took a few people by surprise today. I know you talk about delays to projects and starting up, but obviously you've been running at a billion rate and you fell down to 900. So that's question one. And question two is on the U.S. and tracking. Can you just talk about what you're seeing in the U.S. and what type of projects you're involved in? Thank you.

Hi, Nick. Hiya. Thanks.

Yeah, the first quarter, we have a lot of intent. To be honest, it For us, it's not a major issue. You know, the fact is that, well, two big players, we expect that should be awarded by the end of, not by the end. The second quarter, the second half of year 2023, the reality has been that they have been awarded in the last two months of 2023 and the first month of 2024. I think there are some good news behind that, you know, because probably we believe that this delay has to do with the fact that the client, you know, all the staff of the client is full, you know. They are launching so many places simultaneously that, you know, they have been forced to delay a bit the awards. I think this is the good news. The bad news, obviously, is that we couldn't tackle any relevant revenue coming from those two projects in the last quarter. If I can elaborate a bit more the answer, those two projects have been awarded in consortium, one with an emergency company and the other one with Sinopec. And, you know, when you launch the projects alone, it's very easy to launch them in a very fast track. When you have to share with your partners relevant decisions, it takes a bit more time. So I think this is what has happened, you know, basically a delay because clients were full of jobs to do, and it has taken more time than usual to launch the project. But we are confident that the problem here is that it should be, if we don't have the clients, then we have the clients, and now we have to deliver them. And I think that's all I can say. Okay, thank you, Eduardo. Hi, Nick. Hi. You were asking about, I'm Juan. Hi. Nice talking to you. You too. Let's talk about VGS. We've been there with Eduardo and the whole team a couple of times recently. We have done road shows. We have visited customers. We have already shipped the story with some very good customers. We're already working for them there and especially here. And I think now more than ever is the opportunity for Kia. The number of investments are huge, and the scarcity of resources, of quality new resources is also huge. And I think the scheme of being close to our customers, Developing with them, they're the front-loading of the jobs. And if we move forward, we will be challenging even here, as we have done with communion, action, and many other customers, American customers. I think it's a feasible and very good strategy. So let me tell you that... We're very optimistic. I am personally extremely optimistic. We have sat down with our customers, and we have been retained by some of them in the, you know, quite rapidly. So, well, it's big news, and I do believe that we have a very good near future, 2024, and a very good future, 2025. Another one, you know, this is going to go further than that. So, optimistic. And most of those projects, let me tell you, you're also telling, many of those projects have to do with transition. Transition is the big part, as well as gas and second. But that transition is important. I mean, the number of... and engineering resources needed to develop those investments is huge. And the quality, because the U.S. has good quality of engineering, the quantity of engineering is quite scarce. It is very much, it is definitely a mismatch.

Okay, thank you very much. Your next question comes from Ignacio Dumanek with JB Capital. Please go ahead.

Yes, good afternoon. Thank you for taking my questions. So the first one is on the 2024 outlook. I was wondering, on your margins, given the improvement we've seen in the previous quarters, if this 4% increase It could be a little bit conservative on that end. Then my second question is related with the capital market today. I do appreciate we must be patient, but you could give us some color on any areas. You plan to give us more visibility. This plan, you expect this to be... continuistic on the company's current strategy. And my last question is related with the entrance of the CEPI on your shareholder structure in the upcoming years. I believe in the past you've mentioned the positives that this might entail. So if you can also give us... on the benefits that this would entail.

Thank you very much.

I wouldn't say it's conservative. No, it has been a long time with absorbing difficulties that have to do with technical needs, and I would have learned from the past. I think we are doing things correctly. For this reason, we are improving the guidance, but we have to be prudent, and we want all of you to follow our advice. Let's be prudent, all of us. 4% is a very solid margin, and we believe in the right guidance, so to be honest. Regarding the market rate, the capital market rate, I think it's a good strategy for us to disclose now what we are going to talk about. Obviously, as you can imagine, we will talk about organization, we will talk about targeted geographies, we will talk about energy transition, you know, all those topics that we have to speak about. And because in the city, the benefit of becoming St. Homer's, you know, the city has been the best partner of us in this period. You know, we know that here in Spain, probably, This kind of support from CEPI is not what we received. That is not the case of our clients. Most of our clients believe that technical awareness is stronger. You will have CEPI by our side. So now the idea is let's expand. Let's obtain new, big, relevant, technological, profitable products. With CEPI, it's an easier task. Let's stay with CETI at least for a while. Probably, I don't know, maybe next year we can analyze again that question, but for the time being, we believe that CETI is the perfect partner for technical coordinators, for this year, 2024, for sure.

Okay, thank you. Your next question comes from Philippe Leet with CACSA Bank.

Please go ahead. Hi, hello everyone. I have just one additional question, if I may, regarding cash flow. Considering that the net cash position at year-end still does not include any down payment from the recent project award from Saudi Aramco, how is your expectation regarding net cash evolution for this year? Should we expect a similar trend when compared with last year? Or should we expect a better performance?

Thank you. Sorry. Give me one second. I'm writing down the answer.

Okay. I want to elaborate on that answer. The message we gave you two months and a half ago was The business is not still fully normalized. Most of our projects are still in a phase of engineering or in the last stages of construction. It is the two stages where the business delivers little cash. So I would say it's the opposite. It consumes cash. So we need to reach a stage where the full business is normalized with some engineering, some projects in the engineering phase, some projects in the procurement phase, and some projects in the construction phase. We believe we will reach that stage in the second half of the year, and we will see a more normalized figure of cash in the second half. That's the answer we gave you months ago. Now what we are going to see is by the end of the year. And when I was telling about we have the compromise to be a little more focused in the cash side, our idea is, at least our proposal in 2024, is to convert the result into cash. That's an obvious target we have. But there are two relevant facts we have to have in mind. The first one, there is a concentration of awards by the end of the year. And by the end of the year, 2024. So probably we will see a relevant amount of down payments in our balance sheet figure by December 31st. So, you know, it's very difficult to predict where the cash is going because of that fact. And second, and that's important for me as well, you know, The priority always has to be deliver the project, and we have to pay suppliers. Because, you know, if you allow the money flow in the full chain, you know, the project moves as smooth as you can, and you can deliver on time everything. So we have to be careful and find the right balance. But it's our purpose to focus on cash to convert the result into profit. Sorry, to convert the profit into cash. by the end of the year, but we report official prices because of the large amount of amendments that we expect to receive by the end of the year.

Your next question comes from Robert Jackson with Banco Santander. Please go ahead.

Hi, good afternoon, gentlemen. So I've got three questions, and I'll take the So the first question is, can you give us an idea of the breakdown of the planned backlog in terms of the different phases? So that is engineering, procurement, construction. And how has the construction phase, how has it been de-risked with JVs or outsourcing these phases? So basically, how much of the construction phase of the backlog may have been de-risked to JVs or outsourcing?

So that would be my first question.

Let me see if I can answer that question correctly, because we don't break the backlog in terms of engineering for human and construction. This project has been started with engineering a few months earlier. procurement takes place to finalize with construction. It is true that if you look at our backlog right now, with a large percentage of our service contracts that we have been awarded, you know, front end and things, we have a big chunk of engineering. And also, it's a new, fresh backlog. We have six billion new awards. And that backlog has been big. is a very large percentage of it is on an engineering case because of the contract itself, it's on engineering and because the ETC is on the early stage and it's only on the engineering case. If I have to give you a The backlog, I think, is rather fresh news. That's why it's on GVN's page.

And in terms of customers and the risk strategies, quite healthy. Okay. I have a question about... Sorry, do you want to just continue? I'm going too far. Okay.

the de-risking of the construction phase. So, how much is, obviously, JVs and outsourcing. So, Simon Peck is an example of a JV and de-risking the construction phase. Could you give us any idea of the current backlog, how much is with JVs or outsourced, so that we have an idea of how much is de-risked? I mean, if you look into the lots of rules, again, we have not done the big one, but I'm just talking from the top of my mind, but if you look into the last 18 months of rules, you know, most of it, 80% has to do with one way or another, JVs. Okay. Second question, regarding your commercial pipeline for 2024, I have a couple of questions. So first of all, how confident are you with the occurrence of the investment cycle?

And what level of tangible opportunities have you identified for this year, for 2024?

I mean, in most of the webcast presentations, we talk about pipelines, and we prove how the pipeline has been brought down in these settings. This presentation was more a review of the performance of the year. I haven't got the numbers in front of me, but our pipeline is above $30 billion. You see, despite having been successful in more than $6 billion and many service contracts, the pipelines continue to grow. I mean, the pipelines continue to grow, and a very large percentage now, we can tell you, is moving to a spec campaign.

Okay.

And the third question, Tony, regarding your strategic alliance with Sanopec, do you expect to see opportunities in new geographical markets, which could also help to support additional growth? I mean, when we sit with Sanopec, and even by ourselves, we explore markets where we are both comfortable working together. and also opportunities in other regions. And one of them, a very important one that we work in, and I think there are opportunities there. And I guess not sooner than never we announce that the starting of one is Africa. So I do believe that Africa is... is the place that there are opportunities, and where China, China Tech in particular, and Chinese construction companies in general have a strong footprint. And we do have the good engineer know-how. So I think for that region, we are, and we will, let me underline, we will become a good partnership.

Thank you very much indeed, Vince. Thank you. Thank you. Okay, thank you very much.

This was a good review of the year, and I hope to see most of you, if not all, in Abu Dhabi this coming May. Thank you very much.