Técnicas Reunidas (AO) | Buy | Sound underlying performance, but EUR45m provisions

Research evidence excerpt

Técnicas Reunidas (AO) | Buy | Sound underlying performance, but EUR45m provisions

News comment

Release date: 14 May 2026

Kevin Roger

Head of Energy Equipment and Services

Buy +33 1 53 65 36 74Técnicas Reunidas kroger@keplercheuvreux.com

Spain | Energy equip. & services Beta Profile: MCap: EUR2.5bn

Target Price: EUR41.00 Bloomberg: TRE SM Reuters: TRE.MC

Current Price: EUR31.12 Free float 59%

Up/downside: 31.7% Avg. daily volume (EURm) 15.8

YTD abs performance 12.6% Market data: 13 May 2026

52-week high/low (EUR) 36.96/17.61

Sound underlying performance, but EUR45m provisions

Key points:

Técnicas Reunidas reports its Q1 earnings, which show a robust underlying performance but an unexpected EUR45m provisions.

The group's Q1 top line came at EUR1.58bn, and the Q1 underlying EBIT margin is robust, at 4.8%

However, the group is taking an EUR45m provision, which we were not expecting, related to covering Middle East conflict costs. In

that sense, we do not really understand if TRE can recover at least part of those costs. We guess probably, but that's probably a

key subject for the conference call.

The cash flow generation has been sound this quarter. The group's net cash position, adjusting for working capital, is EUR250m vs

EUR186m at the end of 2025.

In the press release, the group provides a very confident message on the short and long-term business. The company notably

expects "Significant very short-term awards"; they mention "EUR8bn immediate expected awards only from the Middle East"

The group is confirming its guidance (while moving to an underlying basis)

At the end, the release would be strong. But we are negatively surprised by the EUR45m provisions and the timing for such a

decision (we were expecting it more around Q2, with a better view).