Tecnicas Reunidas S A : The company sends information regarding 2020 Full Year Results.

FY 2020 Results

26 February 2021

Audited accounts

Técnicas Reunidas closes 2020 with a promising future on the back of a solid backlog, a very active pipeline and increasing opportunities from energy transition

• ▪ YTD backlog of €8.9 billion. FY 2020 backlog of €8.3 billion

• ▪ Order intake of €2.1 billion

• ▪ Sales at €3,521 million

• ▪ Adjusted EBIT at €105 million, with a 3.0% margin. EBIT at €41 million

• ▪ Adjusted Net Profit at €58 million. Net profit at €13 million

• ▪ Net cash position of €197 million

Juan Lladó, Técnicas Reunidas Chairman, commented:

"2020 was going to be the year of full recovery for TR, with a positive scenario of growing sales and profits on the back of a very healthy backlog. It ended up being probably the most challenging year we have ever experienced, as we had to cope with all kinds of effects of the Covid pandemic on our operations.

I think we have done a good job in tackling this challenge. First and foremost, we have taken all the necessary measures to safeguard the health of our workers and subcontractors. Then, we have adapted our production model to remote work in record time and with high productivities. Last, but not least, we have been adapting our cost base to the reprogramming of major project schedules that were agreed with our main clients. Our management actions allowed us to remain profitable despite having to compensate a 35% fall in sales compared to our initial guidance and major cost increases in extremely complex environments. It is also remarkable that we were able to preserve in full our initial backlog and improve its future execution together with our clients. Furthermore, we have also taken very important steps into becoming a major player in the energy transition, which is key for our long-term growth.

Despite having to cope with second and third waves in several countries, we are starting 2021 with renewed ambition and strength. Within the present constraints, we keep making good progress in the execution of projects in the construction phase, in full alignment with our clients, that are becoming more focused in advancing delivery. At the same time, we continue working on all the major projects that were reprogrammed and that we expect will progressively start picking up speed. We are starting the year with a lower cost base and we aim to further enhance our efficiency under the guidelines of the TR-ansforma plan, thus improving our profitability as sales pick up. Most important: in the last months we have been extremely active on the commercial front. We have already presented a substantial

number of bids and we are also ready to bid in many regions in the first half of 2021. This makes us highly confident about full backlog replacement with new awards in 2021.

In sum, we expect our operations to steadily improve as 2021 progresses, moving towards normalization by the turn of the year. We definitely will put all our energy into achieving it."

Highlights € millionFY 2020

FY 2019

Variation

Backlog

8,347 10,026 -17%

Net Revenues

3,521 4,699 -25%

Adjusted EBIT (1)

104.8 68.2 54% 3.0% 1.5%

Adjusted Net profit (1)

57.9 39.4 47% 1.6% 0.8%

Net Profit (2)

13.0 -10.0

N.M.

0.4% -0.2%

Net Cash Position (1)

197 371

-47%

• (1) Figures classified as Alternative Performance Metrics ("APMs"). See appendix.

• (2) Profit for the year from continuining operations

FY 2020 RESULTS SUMMARY

Backlog at the end of 2020 stood at €8.3 billion, that compares to €10.0 billion at the end of 2019. Including the SASA Polyester project, announced in November 2020 and formally signed in February 2021, total backlog reached €8.9 billion.

During 2020, the main awards added to the backlog were: in Q1 2020, the important refining project for Sonatrach at Haoud el-Hamra, Hassi Messaoud (Algeria), with a value of $2 billion for Técnicas Reunidas; in Q3 2020, a new environmental project for Saudi Aramco; in Q4 2020, a project for the environmental improvement of a downstream facility from ENAP in Chile; and a new petrochemical plant for Sasa Polyester in Turkey, whose contract has been recently signed and that will be booked in the backlog in Q1 2021. In addition, the company signed important agreements for environmental and hydrogen developments.

Total sales reached €3,521 million in 2020, with a 25% decrease versus 2019. This reduction mainly reflects the reprogramming of some major projects during the year, requested by clients to adapt to the Covid environment; as well as slower execution, due to the complexity of working under the different confinement regimes adopted in the countries where the company operates.

Adjusted EBIT stood at €104.8 million in 2020. The adjusted EBIT margin of 2020 was 3.0%, showing the healthy contribution of oil and gas projects in the backlog, as well as the effects of the efficiency and cost saving plans.

Adjustments to EBIT are related to extraordinary Covid and restructuring costs, as well as the impact of the asset disposal plan execution:

• • Covid expenditures are direct costs to the company, net of realized and expected client reimbursements, related to a wide variety of items such as: protection equipment; social distance and sanitizing of on-sites and home offices; repatriation flights and idleness due to both quarantines of on-sites or even some closures of sites imposed by governments; many other non-reversal costs and direct costs linked to the extension of projects. The Covid-19 pandemic had a total negative net impact (net of realized and expected client reimbursements) of €58 million over 2020.

• • Restructuring costs, which are linked to the efficiency plan, amounted to €16 million in 2020.

• • The profit from the disposal of Eurocontrol resulted in €10 million.

During the last quarter of 2020, Técnicas Reunidas accelerated both its 2019 TR-ansforma efficiency plan and the important cost saving initiatives to adapt to Covid, which resulted in more than €121 million cost reductions in 2020. That figure will escalate to €257 million in annualized terms.

Net cash position at the end of 2020 stood at €197 million showing the progress of the different projects in the backlog.

OUTLOOK AND GUIDANCE FOR 2021

The unexpected pandemic outbreak led to lower sales in 2020, due to the slowdown in the execution of projects at more advanced stages, as well as the reprogramming of some major projects at an earlier stage, that shifted their sales across time. In 2021, we expect again that projects at more advanced stages will continue to deliver the bulk of the year sales, as they are executed at the optimal pace allowed by the pandemic evolution; while the reprogrammed projects keep progressing at the pace agreed with clients. With regard to margins, as the pandemic eases, the company expects to reflect in its accounts the higher embedded margins of the backlog, as execution starts to accelerate.

The company currently forecasts sales for 2021 in the range of €3.5 billion and an adjusted EBIT margin around 3%. Moreover, given its current bidding pipeline, the company expects to fully replenish its backlog, with awards outpacing sales during the year. These forecasts assume that Covid conditions continue to improve throughout 2021, as is currently expected for all the main regions where the company operates.

Webcast results details

Técnicas Reunidas will hold a conference call today at 13:00 CET. It can be accessed through the link in its homepage:http://www.tecnicasreunidas.es/en/

BACKLOG AND ORDER INTAKE

Backlog

FY 2020
8,347
2,117
Downstream
Project	Country
Exxon Mobil refinery	Singapore
Sitra refinery	Bahrain
Baku refinery	Azerbaijan
Duqm refinery	Oman
Ras Tanura refinery	Saudi Arabia
Al Zour refinery	Kuwait
Minatitlán refinery	Mexico
Talara refinery	Peru
FEED Tuban	Indonesia	Pertamina / Rosneft
Polyethylene plant	Canada	Nova Chemicals
Hassi Messaoud refinery	Algeria	Sonatrach
Environmental enhancement project	Chile	ENAP
Upstream
Project	Country	Client
Marjan	Saudi Arabia	Saudi Aramco
Bu Hasa	United Arab Emirates	ADNOC Onshore
Das Island	United Arab Emirates	ADNOC LNG
Haradh	Saudi Arabia	Saudi Aramco
GT5	Kuwait	KNPC
Jazan IGCC*	Saudi Arabia	Saudi Aramco
Power
Project	Country	Client
Sewa	United Arab Emirates	Sumitomo / GE EFS
Biomass plant	UK	MGT Teeside
Turów	Poland	Polska Grupa Energetyczna
Cogeneration plant	Canada	Suncor
Energy efficiency	Colombia	Termocandelaria

* Project in mechanical completion or carrying out services for the start up phase of the plant