Técnicas Reunidas: A High-Conviction Buy Amid Energy Transition Tailwinds and Strong Financial Momentum

Introduction
As the global energy transition accelerates, companies that can bridge the gap between traditional industrial infrastructure and sustainable innovation are poised to outperform. Técnicas Reunidas (TR.MC), a Spanish engineering and construction giant, has emerged as a standout player in this space. With a strategic focus on decarbonization, a robust order intake, and disciplined financial management, the company is uniquely positioned to capitalize on the $1.7 trillion energy transition market by 2030. Let's dissect why Técnicas Reunidas is a high-conviction buy for investors seeking exposure to the net-zero revolution.

Strategic Growth in Energy Transition: Building the Infrastructure of the Future

Técnicas Reunidas has redefined its identity as a decarbonization enabler. Its track initiative, launched in 2023, is not just a buzzword but a blueprint for dominance in the energy transition. The company aims to generate 30-50% of its turnover from energy transition projects by 2030, a goal backed by a 9,000 million euro pipeline of low-emission projects. These projects alone could save 25 million tonnes of CO2 annually—equivalent to 10% of Spain's total emissions in 2021.

Key Sectors and Projects

1. Green Hydrogen and Ammonia: The 4-billion-euro green ammonia plant in Saudi Arabia (a joint venture with ACWA Power) is a game-changer. With a capacity of 0.4 MTPA of hydrogen, it's the largest of its kind globally. This project aligns with Saudi Arabia's ambition to become a green hydrogen hub for Europe.
2. Circular Economy: The waste-to-biomethanol plant in the Netherlands (90,000 tonnes/year) exemplifies Técnicas Reunidas' circular economy focus. By converting municipal waste into biomethanol, the company is tackling two crises at once: energy scarcity and waste management.
3. Carbon Capture: A carbon capture unit in the UK (800 MW combined cycle plant) will sequester 2 million tonnes of CO2 annually, directly supporting the UK's net-zero timeline.
4. Methane Management: Expanding into methane reduction services in the Middle East, Técnicas Reunidas is addressing fugitive emissions—a critical but overlooked segment of decarbonization.

R&D and Talent

The company's Madrid technology hub, staffed with 4,500+ professionals, is a powerhouse for innovation. Over 70 R&D experts are dedicated to low-emission technologies, and partnerships with firms like McKinsey and BBVA accelerate project structuring and financing. This technical depth is rare in an industry still dominated by legacy players.

Robust Order Intake: A Pipeline of Growth and Scalability

Técnicas Reunidas' order intake in H1 2025 reached €3.8 billion, with a €13.1 billion backlog and a €72.3 billion pipeline for the next two years. This visibility is a testament to the company's ability to secure high-margin, long-term contracts.

Notable H1 2025 Contracts

• Tyson Group Fertilizer Project: A large-scale, technology-driven fertilizer initiative, underscoring the company's credibility in complex chemical engineering.
• Clean Fuel FEED Project: A €35+ million contract for a green hydrogen facility, aligning with global clean fuel trends.
• Middle East Digitalization: A digital transformation contract with a major NOC, highlighting Técnicas Reunidas' expanding role in tech-driven energy solutions.
• Aqua Power Green Hydrogen FEED: A potential “rollover” project in Saudi Arabia's green hydrogen corridor, with global implications for European energy security.

Execution Capacity

With a workforce growing from 8,500 in 2023 to 13,500 by 2025, the company has the operational bandwidth to scale. Its SALTA strategic plan emphasizes risk mitigation in construction, ensuring timely delivery for clients. This is critical in an industry plagued by cost overruns and delays.

Disciplined Financial Management: A Foundation for Sustained Growth

Técnicas Reunidas' financials are a model of prudence. As of H1 2025, the company holds €422 million in net cash and €654 million in equity, surpassing pre-pandemic levels. CEO Eduardo Sandviel has emphasized a policy of converting EBIT into cash rather than hoarding liquidity. Excess cash is reinjected into suppliers, improving payment terms and reducing project risks—a win-win for stakeholders.

Debt and Dividend Strategy

• Debt Reduction: The company is actively considering partial repayment of CEPI loans, signaling confidence in its liquidity.
• Dividend Potential: While no 2025 dividend is planned, 2026 results could unlock shareholder returns, rewarding long-term investors.
• Leverage Ratios: With more cash than debt, Técnicas Reunidas can fund growth without overexposure.

Valuation and Guidance

The company's 2025 sales guidance targets €5.6 billion, with EBIT margins improving in the services segment. A SALTA Investor Day on October 2, 2025, will provide further clarity on financial and strategic milestones.

Investment Thesis: Why Técnicas Reunidas is a Must-Own

1. Energy Transition Alignment: The company is at the forefront of hydrogen, carbon capture, and circular economy technologies—sectors with explosive growth potential.
2. Scalable Order Book: A €72.3 billion pipeline ensures multi-year revenue visibility, reducing reliance on cyclical markets.
3. Financial Prudence: Strong liquidity, low leverage, and a focus on EBIT conversion make the company resilient to macroeconomic volatility.
4. Global Footprint: Projects in Saudi Arabia, the Netherlands, the UK, and the US position Técnicas Reunidas to benefit from regional energy transition policies.

Risks to Consider

• Execution Risks: Large-scale projects can face delays or cost overruns. Técnicas Reunidas' SALTA strategy mitigates this, but vigilance is required.
• Geopolitical Exposure: Projects in the Middle East and Europe face regulatory and geopolitical uncertainties.
• Competition: Rivals like TechnipFMC and Jacobs Engineering are also vying for energy transition contracts.

Conclusion: A High-Conviction Buy

Técnicas Reunidas is more than a construction firm—it's a decarbonization architect. Its track initiative, combined with a €72.3 billion project pipeline and disciplined financial management, creates a compelling case for long-term investors. As the energy transition accelerates, companies like Técnicas Reunidas will be the backbone of the net-zero economy. For those seeking a high-conviction play in this space, Técnicas Reunidas offers a rare combination of strategic vision, operational excellence, and financial discipline.

Action Plan for Investors
- Entry Point: Consider buying on dips, given the stock's 52-week high and strong fundamentals.
- Time Horizon: 2–5 years, with key milestones in H2 2025 (Investor Day) and 2026 (dividend potential).
- Position Size: Allocate 3–5% of a high-conviction portfolio, given the company's transformative potential.

The energy transition is not a trend—it's a transformation. Técnicas Reunidas is building the infrastructure to power it.