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.