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1. Company Snapshot

1.a. Company Description

Técnicas Reunidas, S.A., an engineering and construction company, engages in the design and management of industrial plant projects worldwide.It operates through Oil and Gas, Power, and Other Industries segments.The Oil and Gas segment offers engineering, procurement, and construction services in oil processing operations and chemical production and processing operations; services related to the natural gas production and extraction value chain, such as production, processing, storage, and transportation; constructs, revamps, and expands refining plants; designs and builds auxiliary services and other refining units; and designs and constructs monomers, polymers and plastics, chemical, and fertilizer producing and processing plants.


The Power segment provides consulting, engineering, procurement, and construction services for a range of electricity generating plants comprising conventional thermal plants, combined cycle power plants, gasification integrated with combined cycle, nuclear plants, co-generators, solar plants, fuel cells, solid waste, and biomass technology, as well as plant operation and maintenance services; and supplies turnkey plants.The Other Industries segment undertakes projects in various areas that include airports, industrial facilities, and desalination and water treatment plants, as well as projects for public authorities and other organizations, including management of car parks, and sports centers.It is also involved in the property development and machinery wholesale business; and provision of inspection, quality control, and technical consulting services.


The company was formerly known as Lummus Española, S.A. and changed its name to Técnicas Reunidas, S.A. in 1972.Técnicas Reunidas, S.A. was incorporated in 1960 and is based in Madrid, Spain.

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1.b. Last Insights on TRE

Técnicas Reunidas, S.A. has experienced a notable surge, driven by a distinguished collaboration with Sinopec Guangzhou Engineering on a green hydrogen project in Saudi Arabia. The company reported strong financials, with sales and net income growth. Additionally, Técnicas Reunidas secured a contract with Fluence Corporation to provide a water treatment system for a new combined-cycle power plant in Saudi Arabia. These developments have likely bolstered investor confidence. According to recent estimates, the stock may be undervalued, presenting a potential opportunity.

1.c. Company Highlights

2. TR's 9M 2025 Earnings: Strong Revenue Growth and Margin Expansion

TR reported revenues of EUR 1.8 billion for the first nine months of 2025, representing a significant increase from the previous year. The EBIT margin stood at 4.5%, with EUR 84 million in EBIT, 78% higher than the previous year. Earnings per share (EPS) came in at 0.3966, slightly below analyst estimates of 0.43. The company's net cash position remains robust at EUR 427 million, and equity levels are at EUR 698 million.

Publication Date: Nov -29

📋 Highlights
  • Revenue Growth: Q3 2025 sales rose to EUR 1.8 billion, up 29% from Q2, driven by strong project execution.
  • Power Business Expansion: Aims for EUR 1 billion+ annual revenue from 2025–2028, supported by EUR 86 billion pipeline and secure contracts.
  • Services & Power Progress: Halfway toward EUR 500 million 2028 target, with EUR 230 million in 2025 revenues and EUR 300 million in awards expected.
  • Profitability: EBIT margin reached 4.5% (EUR 84 million) in Q3 2025, up 78% YoY, with 2025 guidance of 4.5% margin and EUR 6.25+ billion revenue.
  • Decarbonization Projects: Advanced initiatives like Yanbu Green Hydrogen and hydrogen-ready combined cycle contracts with RWE highlight future growth in clean energy.

Business Line Performance

The Services and Power business line continues to drive growth, with revenues of EUR 230 million and awards expected to reach EUR 300 million this year. The company is prioritizing engineering services due to higher margins and lower execution risk, with a 30% margin announced in Abu Dhabi aligning with actual results. The Power business unit has raised its ambition, targeting over EUR 1 billion per year from 2025 to 2028, driven by secure contracts, backlog, and a strong commercial pipeline.

Pipeline and Growth Prospects

The company's current pipeline stands at EUR 86 billion, with a strong presence in North America, the Middle East, and Europe. TR is well-positioned in LNG, power, and decarbonization, with notable projects like the Yanbu Green Hydrogen cluster. The company is optimistic about its growth prospects, with guidance for 2025 set at revenues above EUR 6.25 billion, with a 4.5% margin, and revenues expected to be north of EUR 6,500 million in 2026, with a margin above 5%.

Valuation and Outlook

TR's valuation metrics indicate a reasonable price-to-earnings (P/E) ratio of 20.99 and a price-to-book (P/B) ratio of 4.76. The company's return on equity (ROE) stands at 20.95%, and its return on invested capital (ROIC) is 8.88%. Analysts estimate revenue growth of 5.3% for next year. As Juan Lladó stated, "the company's pipeline and year-to-date results reflect the success of its TR strategy." With a strong pipeline and improving margins, TR is poised for continued growth.

Working Capital Management

TR manages its working capital with discipline, keeping cash in suppliers' and subcontractors' hands. The company has seen a 78% revenue growth and a 30% increase in accounts receivable and payable, amounting to EUR 3.5 billion. While prepayments from clients have been limited, the company remains cautious about analyzing working capital on a quarter basis due to the business's complexity and timing of milestone payments.

3. NewsRoom

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Fluence Awarded Contract in Saudi Arabia worth over US $12 million

Oct -28

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3 European Stocks Estimated To Be Up To 45.4% Below Intrinsic Value

Oct -06

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Técnicas Reunidas (BME:TRE) Surges 23% Over Last Quarter

Sep -13

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GE Vernova wins gas turbines order for Qurayyah IPP expansion project

May -28

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Tecnicas Reunidas SA (TNISF) Q1 2025 Earnings Call Highlights: Strong Order Intake and Revenue ...

May -15

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3 European Growth Stocks Insiders Are Eager To Own

Apr -15

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Orascom and Técnicas Reunidas to build 3GW Saudi gas-fired power plant

Mar -25

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3 European Growth Stocks With Strong Insider Confidence

Mar -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.27%)

6. Segments

Natural Gas

Expected Growth: 4.5%

Técnicas Reunidas' 4.5% growth in Natural Gas is driven by increasing global demand, particularly in Asia, and rising LNG exports. Additionally, the company's strategic focus on gas processing and transportation projects, as well as its presence in high-growth markets, contributes to its growth momentum.

Refining

Expected Growth: 3.8%

Técnicas Reunidas' refining segment growth of 3.8% is driven by increasing global demand for refined products, strategic partnerships, and investments in process optimization and capacity expansion. Additionally, the company's focus on sustainability and energy efficiency, as well as its diversified customer base, contribute to its growth momentum.

Petrochemical

Expected Growth: 4.2%

The 4.2% growth in Petrochemical segment from Técnicas Reunidas, S.A. is driven by increasing demand for plastics and packaging materials, expansion into high-growth markets, and strategic partnerships to enhance production capacity and efficiency.

Other

Expected Growth: 3.5%

Técnicas Reunidas' 3.5% growth in 'Other' segment is driven by increasing demand for engineering services in renewable energy and infrastructure projects, coupled with strategic partnerships and expansion into new geographies, resulting in higher revenue from project management and consulting services.

Low-carbon Technologies

Expected Growth: 6.0%

Técnicas Reunidas' Low-carbon Technologies segment growth of 6.0% is driven by increasing global demand for renewable energy, government incentives for sustainable infrastructure, and the company's strategic partnerships with key industry players. Additionally, the segment benefits from the growing need for energy storage and grid modernization, as well as the company's expertise in engineering, procurement, and construction (EPC) services.

7. Detailed Products

Refining

Técnicas Reunidas provides engineering, procurement, and construction (EPC) services for refining projects, including crude oil refining, gasoline production, and diesel fuel production.

Petrochemicals

The company offers EPC services for petrochemical projects, including the production of ethylene, propylene, and other petrochemical products.

Oil and Gas

Técnicas Reunidas provides EPC services for oil and gas projects, including upstream and midstream operations, such as exploration, production, and transportation.

Power Generation

The company offers EPC services for power generation projects, including thermal, renewable, and combined-cycle power plants.

Infrastructure

Técnicas Reunidas provides EPC services for infrastructure projects, including roads, bridges, and buildings.

Water Treatment

The company offers EPC services for water treatment projects, including desalination, wastewater treatment, and water reuse.

8. Técnicas Reunidas, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Técnicas Reunidas, S.A. is medium due to the presence of alternative energy sources and technologies.

Bargaining Power Of Customers

The bargaining power of customers for Técnicas Reunidas, S.A. is low due to the company's strong reputation and long-term contracts.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Técnicas Reunidas, S.A. is medium due to the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Técnicas Reunidas, S.A. is high due to the growing demand for renewable energy and the increasing competition in the industry.

Intensity Of Rivalry

The intensity of rivalry for Técnicas Reunidas, S.A. is high due to the competitive nature of the industry and the presence of established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.38%
Debt Cost 11.26%
Equity Weight 26.62%
Equity Cost 11.91%
WACC 11.43%
Leverage 275.72%

11. Quality Control: Técnicas Reunidas, S.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CFE

A-Score: 5.7/10

Value: 9.4

Growth: 1.1

Quality: 4.8

Yield: 5.0

Momentum: 8.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Salcef

A-Score: 5.1/10

Value: 4.6

Growth: 4.4

Quality: 6.9

Yield: 3.1

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
OHL

A-Score: 4.6/10

Value: 9.1

Growth: 4.0

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Técnicas Reunidas

A-Score: 4.5/10

Value: 5.9

Growth: 4.2

Quality: 4.6

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
ABO Wind

A-Score: 4.3/10

Value: 7.2

Growth: 7.9

Quality: 4.6

Yield: 2.5

Momentum: 1.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
YIT

A-Score: 3.9/10

Value: 6.7

Growth: 0.6

Quality: 2.5

Yield: 3.8

Momentum: 7.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.9$

Current Price

27.9$

Potential

-0.00%

Expected Cash-Flows