Tecnicas Reunidas (TRE) Q2 2024 earnings summary

Executive summary

• The SALTA strategy aims to double operating margins to 8% by 2028 and reach €5 billion turnover, focusing on de-risked, digitalized EPC, expanding service contracts, and strategic alliances, notably with Sinopec.

• Backlog reached €10.9 billion, up 19% year-over-year, with €1.4 billion in new orders, including major US petrochemical and Saudi Aramco Jafurah III projects.

• H1 2024 saw robust order intake, sales, and profitability growth, supported by expansion in North America and the Middle East, and enhanced service offerings.

• Strategic focus on decarbonization, digitalization, and talent development is driving growth and risk management.

Financial highlights

• H1 2024 revenue was €2.1 billion, with EBIT of €84 million (4% margin), and net profit of €42 million; Q2 sales were €1.1 billion, up 9% sequentially.

• Net cash position at June 2024 was €318 million, up from €241 million a year earlier, with gross debt reduced by €63 million, including €33 million SEPI loan repayment.

• Order intake for H1 2024 reached €1.4 billion.

• EBITDA for H1 2024 was €99.2 million, up 10% year-over-year.

Outlook and guidance

• 2024 guidance targets €4.5 billion in sales and a 4% EBIT margin, emphasizing project selectivity and quality of backlog.

• Ambition to grow EPC revenues by 10% and engineering & services revenues to €500 million by 2028, with margin expansion.

• Transformation towards higher-margin, service-oriented business expected to deliver more value to shareholders.