Presentación track - Técnicas Reunidas

Thank you, Juan. Thank you, very honored Vice President, and thank you all for joining us today on such an important day for us. Before starting my presentation, I'm going to suggest we share with you a video that explains a bit the why behind TRAC.

I disagree with Juan. It's not a transformation, it's a revolution. I'm sorry, it's a revolution, and we feel fortunate because we are an active part — we are the ones who have to turn ideas into realities — and on the other hand, it brings us a lot of responsibility because we have to live up to the expectations.

The figures are staggering. In the energy world, in 2023 it is expected to invest one trillion US dollars, one million million euros. And by 2035, in 10 to 12 years, 1.7 trillion US dollars is expected. Energy investment will grow by 70%, and it will grow unequally. On one hand, conventional energy — investment volumes will be maintained, they're not expected to decrease. Renewables will continue growing as they have in recent years, but where there will be a brutal quantitative leap is in everything related to decarbonization. Two-thirds of that growth, that additional 70%, has to do with decarbonization.

And being a bit selfish, this is very good for Técnicas Reunidas because it expands our target market by approximately 55%.

But it's not only energy that concerns us — CO2 emissions have many other sources, and there are other industries that also emit heavily. Specifically, we've selected two of them: the steel industry and the cement industry, which together account for approximately 15% of total CO2 emissions to the atmosphere. And to put it in relative terms, what does that 15% mean? That's what the United States emits in a year. And again, for us this is a potential source of business because the investment volume expected in these two sectors over the next 10 years is around 200 billion euros.

I'll go quickly here because Juan already mentioned it and because maybe Joaquín can elaborate a bit more. We are well prepared. Our product catalog is good. We're already in hydrogen, in biofuels and the circular economy, of course in carbon capture and storage, and we have a line dedicated to technological improvements and energy efficiency. What's important, on the right side there, is that the percentage of emissions — the emissions that would be mitigated with technologies we know how to develop — represent 52% of the measures that would prevent those emissions we want to eliminate. The 52% refers to the global level. And if we focus on emissions from industry alone, our technologies would allow mitigating up to 86%.

Those will be the numbers, which is my financial part, but there's another part I like more that has to do with approach, with strategy in these times. It's not enough to have extraordinary performance — you need an image, you need a message, a reason for being. And that's why I wanted to dedicate a minute to analyzing our monogram and the name we've given to TRAC. TRAC — the monogram, which is that kind of circle, a footprint with paths in blue and green. The monogram has a message inside, and the message has three parts. One is the footprint — indeed, the footprint that companies want to leave in society, and it's there. The second is the world, that circle, because Técnicas Reunidas has always had a powerful international ambition, because we export know-how and because we also drive many other companies that accompany us, exporting their equipment, their technology.

And third, those paths actually represent the roads, and the roads have a lot to do with specific routes to reach an objective. It's not pursuing things for the sake of it, but through very clearly defined paths.

If I like the monogram, which I think is aesthetically attractive, I like the name even more. TRAC. TRAC is composed of two parts: TR and AC. TR — Técnicas Reunidas. We already know, Juan said he wasn't born yet, 60-plus years of history, reputation among all our international clients, major plants — it's the history, the tradition of a great company that designs and builds industrial plants.

What's more interesting to me is the AC — action, commitment, and know-how. Because that refers to — and now I'm speaking to the camera — it refers to the 8,000 people who are following us by streaming right now, who are our employees, the professionals working for Técnicas Reunidas day and night, who are the ones that truly make ideas become realities. And to all of them, our gratitude, and let them know that a piece of the word TRAC speaks of them.

And finally, an announcement: we want to launch the TRAC Academy. What is the TRAC Academy? Basically, we've realized over these 3 to 4 years of diving headfirst into the transition world, even though we haven't shouted it from the rooftops, that you need a body of knowledge — understanding climate change, understanding the technologies well, knowing the regulation, knowing how all the markets associated with the transition world work. All that is knowledge that professionals need to properly carry out their work. So what we want is to create a TRAC Academy that ensures all Técnicas Reunidas professionals have access to this body of knowledge.

But that's a short-term ambition, perhaps the next 18 months. In reality, what we're looking for longer term — ideally starting in the academic year that begins in September 2024 — is to put all this knowledge into the university environment, so that when those professionals graduate, they're already imbued with this spirit and these knowledge that are so necessary for Spanish companies, ideally for Técnicas Reunidas, obviously. And I'll try to stick precisely to my schedule. I'll now hand over to Joaquín Pérez Dayala, who is the head of the TRAC project. Please, Joaquín.

Thank you very much. Well, good afternoon everyone. Thank you very much. If you'll allow me, I'm going to read what I have written so I don't miss any of the things I need to say. Thank you, Eduardo, Juan, very honored Vice President, and good afternoon to all of you who are here today. I join in this appreciation for accompanying us on this very special day for all of us at Técnicas Reunidas — not only those of you here, also those following us online, and those who made it possible for us to be here today, and those who worked so successfully in organizing today's event. Thank you very much and very sincerely to all of you.

Juan has explained why Técnicas Reunidas is a very valuable tool for this decarbonization scenario. Eduardo has detailed the volume of opportunity for Técnicas Reunidas and the reason we're launching all of this. Emilia will later tell us about Técnicas Reunidas' current positioning in the transition and decarbonization, which is already very high. And I'm going to focus on explaining what we're working on in TRAC currently.

Well, as Juan and Eduardo have anticipated, the truth is that Técnicas Reunidas is already in the transition, already in decarbonization — it's a real fact. TRAC is born to intensify and guide this proposal because we want more, we want more, as Eduardo said. We want more services in growing markets and new industries. And what we're doing at Técnicas Reunidas with TRAC is nothing more and nothing less than identifying new opportunities and developing new services based on the capabilities Juan has already mentioned and that you've seen.

Here's where we are. These are the services you can see on the slide, and now we're going to detail them with more time. First, engineering services. The truth is that historically Técnicas Reunidas has provided engineering services associated with the construction of major industrial plants, and now we're helping large investors, both industrial and infrastructure funds, shape their projects — shape their projects into solid business cases. We have good examples, Juan already mentioned them, and these 30-plus projects we've already worked on have an important impact. Look at the numbers there — if these projects we've already worked on were executed, we would be preventing the potential emission of 25 million tons of carbon periodically and recurrently every year. That figure alone in just 2 years already equals 10% of Spain's emissions. That's a figure we want to keep growing, and we hope it increases considerably in the coming years.

We're launching a new activity — project structuring. We've decided to move forward with it. We're building solid investment opportunities. We want projects to move forward. We've started in Spain with two projects in zones included in the just transition strategy — a second-generation biofuels project and a green ammonia project. This takes time, takes effort, but we're going to make it happen. These projects total about 400 million euros in investment and will create around 350 direct and indirect jobs. These projects, because I'll refer to it later, require building complete value chains around the investment. It's not just about defining the investment or the technology — you have to build the entire business around the investment in the project, and Técnicas Reunidas is also dedicating itself to that. We're working on this with many partners, some of whom are here today. We're doing this in Spain, but we also want to do it primarily in Europe and the United States, where markets have more attractive regulations.

We also talk about creating new recurring services. The truth is this is a new idea. As we were saying before, our platform makes us credible when proposing new things, even with an innovative angle where people don't normally see us. These are recurring services with which we want to support our clients in the operational phase of their assets. Currently we're working on two business lines — one for carbon management and one for methane management. Together they're responsible for 75% of the global warming that has occurred to date.

If I focus on carbon management — and there we have a chart that's complicated, but that's because it is complicated. This is not simple. The truth is, as you know, there are some industrial sectors that cannot decarbonize without carbon capture. For example, cement. 60% of cement emissions are not associated with energy combustion — they're associated with the industrial process. There is no decarbonized cement without capture. Right now there's no other viable alternative. And that's where we want to be. But for these sectors, managing the capture, use, or storage of carbon is a new task and can be difficult to manage. That's where we want to come in. We don't want to just facilitate it — we want to take charge of the carbon present in the gases of...

Processes for extracting carbon from industrial gases, liquefying it, and either giving it additional use or storing it — all of which we are building. As I said, it's not an easy task. It requires assembling the entire value proposition for this service, which has technical, market, and regulatory implications. But this will happen. It's a market that is developing, and we are going to be in it. Regarding methane management, I think you all know that methane is, in the short term, probably the greenhouse gas with the greatest impact on global warming. It is responsible for 30% of Earth's historical warming, and that percentage increases on an annual basis. Avoiding methane emissions is really not complicated — it's a matter of getting to it. But it requires establishing a reliable, permanent management system: identifying and quantifying methane leaks using satellite technology, drones, and fixed and mobile ground sensors. All this information must be integrated — captured from top to bottom and bottom to top — to identify where the problems are, prioritize actions, implement them, and establish a continuous control and reporting system. We are already helping a major multinational operator establish a methane emissions management framework for its assets in the Middle East. This is a clear example of the quality of the Técnicas Reunidas platform — it has allowed us to propose a serious, credible offering, and the client is congratulating us. Finally, we want to contribute to developing technologies associated with the energy transition and the circular economy. We have a technology center, the José Yadón Technology Center, where over 70 people have been working for many years on research and development projects. We already have successful technologies that recover phosphorus from sewage sludge, recover metals from incineration ashes, and obtain critical raw materials. We also have our Technology Transfer division that scales technologies to an industrial level. What we want to do is combine these capabilities, associate them, and work on scaling technologies linked to all energy transition and circular economy topics. So this is essentially our current proposal — the one you see now. There will be new things; we will release new things and continue researching and deepening our search for new opportunities for Técnicas Reunidas' capabilities. And we are doing this in a solid way, but we also want to do it quickly. This is where the partnership with McKinsey comes in. We believe it's a perfect combination: we bring Técnicas Reunidas' technical capabilities together with McKinsey's market and business knowledge. McKinsey studied TR's proposal and became convinced that there was significant value to be created if we worked together, and we are very happy about that. We are working together to quickly and solidly implement TR's proposal, and we are confident it will be a success for both sides. And now I want to talk about collaboration, and here I'm going to go off-script and maybe extend a bit more, but I believe it's important and it's something Juan mentioned earlier. If we want decarbonization to happen quickly, we must approach these projects with a different vision from traditional projects. That's why I call on everyone here — companies and entities of very different profiles — to collaborate. The investments that will make decarbonization possible are either based on businesses that need to be consolidated or on technologies that deserve more trust. A traditional approach to the risk inherent in this industrial transformation will inevitably lead to slower decarbonization. This morning I was doing some calculations: in the early 1990s, what we then called the special renewable generation regime covered about 5% of electricity generation. In recent years, by 2020, it had risen to 45-50%. That's a success, and I believe we should congratulate ourselves. But it took us 25-30 years to reach those figures. If in 25-30 years we'll already be at 2050 — that's 10,000 days, as a program on Televisión Española says — I think we all agree we cannot afford this pace. That's why we need to find flexible and imaginative schemes that allow decarbonization to happen and happen fast. Collaboration is absolutely essential in this regard. And here I go off-script — for everyone's peace of mind, I won't show any video, but I do want to convey the message captured in that video. Decarbonization is a brutal example of entrepreneurship, and entrepreneurship is an emotional roller coaster. When one undertakes, sooner or later comes this quote I'm about to share. It's from Star Wars, of which I'm an absolute beginner. But there's a scene in The Empire Strikes Back where Master Yoda — that short green character full of wisdom and composure — asks Luke Skywalker, the blond and brash one, to lift with his mental force a spaceship that has fallen into a lagoon. The master tells him that to succeed, he must unlearn what he has learned. After resisting for a few minutes, Luke Skywalker says to Master Yoda, 'All right, I'll try.' But Master Yoda responds with great force: 'No. You do it or you don't do it. There is no try.' I want to insist with this Yoda quote on collaboration. We don't have time. If we want decarbonization to happen quickly, perhaps we don't have to unlearn everything we've learned, but we do need to approach projects and investments in a flexible and imaginative way. I am sure that with this spirit, everyone here will face the challenge of decarbonization. We all need to be a little like Yoda. We're going to do it, not going to try. And now I'll hand the floor to Emilia Arias, who has played a more than outstanding role in everything we are presenting today. Thank you very much.

Good afternoon, welcome. Thank you for being here. That's how a rock concert that revolutionized music in this country in the early 1980s began. And here we're talking about industrial revolution, a fair, and transformation. I'll be very brief, but I want to leave you with some very representative figures of what we're doing in energy transition at Técnicas Reunidas. And since I'm from Feria, as my boss says, I'll take you on the Ferris wheel of the circular economy. We are at the heart of the circular economy. 100% of the technologies we currently have in development at Técnicas Reunidas relate to the circular economy. We are developing technologies — both proprietary and as part of major consortia — in high-efficiency hydrogen generation through electrolysis. We are working on decarbonization and biorefineries, on plastic recycling, and we already have available technologies that allow the recovery of metals and valuable elements from waste, such as phosphorus, rare earths, lead, and more. We started with technological development. What do we do in projects? The same. We are also executing green hydrogen projects, hydrogen generation through electrolysis, hydrogen with carbon capture, biorefineries, and CO2 capture to convert it into e-fuels. We are across the entire circular economy chain. First, let's look at hydrogen projects. We have several hydrogen projects in Spain based on electrolysis, and some in North America and Australia with CO2 capture. We wanted to highlight one of them: the Catalina project in Spain, with 500 MW of electrolysis to produce over 52,000 tons of green hydrogen. This project would avoid 400,000 tons of CO2 emissions, and the total value of all hydrogen projects we are developing would avoid 8 million tons of CO2. In the biofuels space, we also have several projects, primarily in Spain, South America, and Europe. Here we wanted to highlight the AMA project, which will enter the EPC stage at the end of this year, producing 90,000 tons of biomethanol from organic urban and forest waste. This single project would avoid 77,000 tons of CO2, and the total of all biofuel projects we are developing would avoid 1 million tons of CO2. Regarding CO2 capture, as expected, it has the largest figure of avoided emissions: 16 million tons in total. Here we wanted to highlight the Peterhead project in the UK, where an 800 MW power generation plant will be able to recover 95% of the CO2 emitted, equivalent to more than 2.2 million tons. In Spain, we are also driving CO2 capture projects from biomass that will result in negative emissions. And finally, regarding methane, a flagship project that Joaquín mentioned, which is in an initial stage, helping an international operator with oil and gas assets manage its methane emissions. Técnicas Reunidas, through the Track platform, is already present in development projects in Spain, Europe, and other continents, with projects that would collectively avoid 25 million tons of CO2 per year — a figure we aim to increase to meet decarbonization targets. This is just the beginning. Thank you very much.

Juan, Eduardo, Joaquín, Emilia — it's truly a pleasure to be in this full room with presentations as stimulating and interesting as the ones you've made, complementing each other and completing a picture in which, indeed, the pace at which we must undertake this task probably cannot be one of proportional growth but must accelerate exponentially, or we won't make it. You'll allow me to make some references regarding the paradigm shift we are living through and what I have felt and perceived from your words. Having said that, I think it's great that you have a headquarters in Cartagena de Indias — I'm sure you'll also be able to drive major projects from there and great satisfaction for those who want to work there. There's much to do and much capability. I'll do a brief review because it has indeed been 25 years — 25 turbulent years on many fronts where I believe some steps have been taken that allow us, as I said before, to speak of a paradigm shift. Not so long ago, we thought that climate change could be resolved in a prescriptive way through regulation, improved international cooperation, or even with the enormously important hypothesis of fixing a price that would differentiate value from disvalue in what we do and generate incentives for things to change a bit faster. But it wasn't so long ago that we fully realized that system — which in some way represented the Kyoto Protocol — no longer served us. First, because we needed everyone to contribute according to their capacity and at a much more accelerated pace. And when we say everyone, we don't just mean all countries. The world is too small, and the interdependence between public and private actors — industrialists, technologists, process engineers, financial engineers, sociologists, and even generators of public value and opinion — is too great to think that only one sector of society could undertake such an intense, rapid transformation without setting a common horizon. This idea of setting a common horizon has come much more recently. We started working on it with a very engineering-driven and consulting approach with McKinsey, beginning around that terrible summit that represented a before and after in Copenhagen in 2009. How, if we want to reach an objective, can each of the technologies on the radar contribute to achieving emission reductions? But it wasn't until the Paris Agreement that we reached the conclusion that we must set that common horizon. Because as important as the answers are the questions, and the video Eduardo presented illustrates this well. It is fundamental to generate a framework, a context, a list of questions that allows each of us, from our own sphere of responsibility, to stimulate our neurons and think about what the adequate answers are for those questions that don't distinguish between us regardless of where we stand — questions we share as the great challenges we must face. And this is how we began to think differently. If we truly want to reach decarbonization, zero emissions, climate neutrality by 2050, the retrospective analysis — working backward from 2050 to see how we can contribute to achieving that result — is a completely different exercise. Setting long-term objectives, intermediate objectives, regulating differently with rules that are largely programmatic and therefore almost all transitional provisions that send the right signals to industry, financiers, technologists — adapting to those processes of change. Instead of the way we have traditionally legislated, where rules take effect the day the 20-day parliamentary period ends or the day after publication in the Official Gazette, and only some small transitional matter is managed. Here we are managing a couple of decades of transition with very important changes in how we produce and consume, and how we account for contributions from different countries to do it in the most balanced, orderly, socially viable, and fair way possible. This is not simple at all, and what you have done here is an extremely interesting exercise, because in those strategies, in those paths that combine footprint, world, and routes, the questions of how to identify which opportunities can be seized — opportunities very present in the presentation you've made, opportunities you've already identified that completely change your strategic framework — along with the questions about where difficulties may arise that will require particular attention if we want them not to materialize, because we need to overcome those difficulties even though we know we don't yet have the answer. It's a wonderfully important exercise. It was activated in Paris in 2015, took time to reach cruising speed, and was preceded by another extremely interesting reflection in that non-reactive but propositional, constructive spirit that Professor Nicholas Stern made in 2005 with his economics of climate change, which he has been enriching ever since. Transforming the world requires spectacular volumes of investment. There are also enormous business opportunities, economic activity, job creation, and opportunities to create a better world. But we must again pose the questions differently. We must think about how to build so that what Mark Carney called the tragedy of the horizon doesn't become a tragedy but instead, with the flexibilities required by each stage we must build, keeps us from deviating from an objective that marks the difference between succeeding or falling off a cliff. And I also very much agree with what Joaquín said: this isn't about 'we're going to try' — we are called to succeed. A company like this, which is an example of success, a pleasure to showcase around the world because it is capable of developing process solutions, engineering solutions, reflecting on alternatives, combining new technologies, or innovating in many different fields — it can play a leading role. A leading role that, I insist, governments must also assume when we debate publicly where and how to build those alternatives, how to work with regulatory frameworks, incentives, fiscal or investment policy, or cooperation with third countries. But also each of the companies that have a context in which they can contribute many solutions. Because, as I said, they chart a different strategy, present their portfolio and proposal for responding to what their shareholders and boards demand of them — having succeeded. Obviously it's about succeeding, and for that it's essential to know the context, objectives, and capabilities, which you clearly have, know, and apply. Second consideration: what can be done within our house? And I'm pleased that one of the answers to what can be done within our house is ensuring our professionals understand, know, ask the questions, formulate answers, and are in a position to share that knowledge or continue learning with those they work with as clients, as people, institutions, or corporations that demand the professional support of a company like this. Because the third dimension, which is also fundamental, is understanding and being aware of the special responsibility that those in leadership positions carry. Those who in a given field or sector become reference points — it's a gift with a certain poisoned component. Self-complacency is not enough. You must also be able to give examples of how things are done, how different solutions are proposed, how progress continues, and how what seems like a world collapsing around us, if analyzed and solved in slightly more detail, can find alternatives that don't leave us stranded or overwhelmed with the impression that no one can resolve everything. And in this combination of how we do something that allows us to achieve that objective by 2050 — that is where we are at this moment on a global scale. A technological race of great dimensions has indeed opened up. Tensions have emerged, difficulties and fragilities have become visible due to a dependency that was not sufficiently anticipated and to which we did not react in time, which has awakened an additional stimulus to accelerate many of the processes already underway. First, because it makes sense — energetically, economically, financially — and not just climatically or for people's security. Second, because clearly it's about conquering tomorrow: what solutions can be proposed and how can we cooperate to find them, or to what extent — this is the other perspective sometimes viewed with suspicion — others may be doing it better than us and we don't want to miss the train. Part of the debates we know about are materializing and being settled in these weeks. I believe we are in good conditions to respond in a very positive way to many of these challenges. I believe Spain has many reasons to feel proud in this race. First, because we have the physical conditions — geographical and climatic conditions — for many of the responses. Not all of the ones you discussed here, all important and interesting, but we have many of the objective, factual possibilities on which to continue building. Second, because we have something very present in this room and very present in the numbers you've provided: exceptional human capital, engineering capacity, training, flexibility in seeking solutions, determination, and exceptional work. And I think that is very, very important. With enough professionals to address all these needs. In fact, that's another extremely interesting aspect of the proposal you're making. We must reinforce learning, the internalization of those questions, and the need to keep asking questions — in all educational cycles, in vocational training cycles where a very important effort has been made in recent years and we must continue, in university cycles, but also throughout the professional careers of adults entering a reality that changes at dizzying speed. Because if something characterizes this transformation, this revolution we're living through, it's the intensity with which it materializes over time and therefore the need to remain constantly attentive to avoid becoming outdated. There are other issues I also believe are important: our companies, and Técnicas Reunidas in particular, have a very significant presence and credibility globally. They have the right size to move with flexibility, sufficient size to do so with solvency and active presence in each geography where they operate, and a portfolio that allows for innovation and reflection on what qualitative leaps in CO2 capture and use systems, how to utilize methane, and what happens with the various variables integrated throughout the proposals currently emerging in the circular economy. So I'll simply conclude by noting, in honor of Star Wars and that climate activist Harrison Ford — May the Force be with you. So please, go forward, take out Luke Skywalker's swords, because I believe we have much, much empire to conquer in building a better future for all. Thank you very much.