• Order Intake: EUR 4.8 million.
• Backlog: EUR 12.5 billion.
• Sales: EUR 4.5 billion.
• EBIT: EUR 181 million, with a margin slightly above 4%.
• Net Cash Position: EUR 394 million.
• Revenue Guidance for 2025: Expected above EUR 5.2 billion.
• EBIT Margin Guidance for 2025: Close to 4.5%.
• Revenue Ambition for 2026: EUR 5.5 billion.
• EBIT Margin Ambition for 2026: Above 5%.
• Net Cash Growth: Increased by EUR 46 million in 2024.
• Gross Debt Reduction: Reduced by EUR 62 million.
• Equity Position: EUR 575 million at the end of 2024.

• Warning! GuruFocus has detected 4 Warning Signs with TNISY.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tecnicas Reunidas SA (TNISY) reported a strong and healthy backlog of EUR 12.5 billion, indicating robust future business prospects.
• The company achieved sales of EUR 4.5 billion, aligning well with their targets and demonstrating solid revenue performance.
• EBIT margin slightly exceeded expectations at over 4%, resulting in an EBIT of EUR 181 million.
• The company closed the year with a net cash position of EUR 394 million, reflecting strong financial health.
• Tecnicas Reunidas SA (TNISY) has been selected for significant projects, including a EUR 3.3 billion project in the Emirates and a strategic partnership with Sinopec for a major refinery project in Algeria.

Negative Points

• The energy transition market is not moving as fast as expected, which could impact future growth in low-carbon projects.
• Working capital remains a concern, with accounts receivable and payable growing in line with sales, indicating potential cash flow management challenges.
• The company faces uncertainty regarding the timing of down payments for new projects, which could affect cash flow projections.
• There is a need for careful management of costs not assigned to projects, which have grown significantly, potentially impacting overall profitability.
• The company remains cautious about the timing of large final investment decisions in the energy transition sector, which could delay expected revenue from these projects.

Q & A Highlights

Q: Can you discuss the volume of services in your mix and the growth in low-carbon technology margins? A: Eduardo San Miguel Gonzalez De Heredia, CEO: Most services rendered this year are related to low-carbon technology, with margins slightly below 30%. We have constructed a backlog of services worth EUR300 million for the next 1.5 years. The energy transition is not moving as fast as expected, but it still delivers good results. We see growth in this business, especially in low-carbon ammonia and carbon capture projects in the US.

Q: How do you see the commercial dynamics for the coming months, and what are your expectations for 2025? A: Juan Llado Arburua, Executive Chairman: We are optimistic about 2025, with a strong franchise and increased prestige. We expect to meet our targets, but the business is bumpy in terms of awards. We aim to replace our sales with new orders and remain selective with customers to ensure profitability and risk management.

Q: What is your strategy regarding the PPL repayment and dividend policy? A: Juan Llado Arburua, Executive Chairman: The PPL is scheduled to be repaid in 2026, and we are committed to this timeline. By the third quarter of this year, we will evaluate the possibility of early repayment based on commercial requirements and net worth. Our goal is to return to a dividend policy by 2026.

Q: How do you feel about the current structure of the company in terms of pursuing opportunities? A: Juan Llado Arburua, Executive Chairman: We have a strong structure and talented professionals, allowing us to be closer to customers than ever before. We are organized with regional CEOs to enhance commercial and delivery capabilities.

Q: Can you explain the increase in costs not assigned to projects and your cash estimate for 2025? A: Eduardo San Miguel Gonzalez De Heredia, CEO: The increase in costs is due to company growth and inflation. We are focused on controlling these costs. Regarding cash, the conversion of EBITDA to cash should improve by year-end, but it depends on when down payments are collected. We aim to use cash wisely to support project execution.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.