Yearbook 2012 Internationalization of Spanish Companies

© 2012, Círculo de EmpresariosCalle Marques de Villamagna, 3, 10ª Planta, 28001 Madrid

Authors:Ofelia Marín - Lozano - Head of the Economics Department, Círculo de EmpresariosMauro F. Guillén - Director of the Lauder Institute, The Wharton SchoolMaría Grandal Bouza - Economic Roling Analyst of the Economics Department, Círculo de Empresarios

Legal Deposit: M-38180-2012Design: Tres Tipos GráficosPrinter: Imprimex

YEARBOOK 2012INTERNATIONALIZATION OF SPANISH COMPANIES

Table of contents

7

Presentation 13

Prologue 15

1.TheworldandSpanisheconomiesin2011-2012 19 1.1Internationaltrade 23 1.2Foreigndirectinvestment 27 1.3Spain’sforeignsector 29 AnalysisoftheBalanceofPayments: currentaccountandcapitalaccountbalance 29 Spain’sforeignsector:changesincapitalflows 35 Spain’sforeignsector:reduceddebtposition 38 Otherindicatorsrelatingtotheinternationalpresence ofSpanishcompanies 39

2.Spanishcompaniesfromaninternationalperspective 41 2.1ShareholdersReturnsinaEuropeanandGlobalContext 42 2.2InvestmentbankanalystsandSpanishcompanies 49 2.3VisibilityofSpanishCompaniesintheinternationalfinancialpress 53 2.4Conclusion 60

3.SpecialMentionsfortheInternationalizationofSpanishCompanies 63 3.1MajorCompanieswithaSignificantTrackRecordofInternationalization 64 3.1.1BancoSantander 64 3.1.2Iberdrola 65 3.1.3OHL 65 3.2InternationalizationOperationsin2011 66 3.2.1LíneaFerroviariaMedina-LaMeca 66 3.2.2GestampAutomoción 67 3.3Medium-sizedCompanieswithaSignificantTrackRecordofInternationalization 68 3.3.1Fluidra 68 3.3.2Maxam 69 3.3.3Tubacex 70 3.3.4Privalia 71 3.4ForeignInvestmentinSpain 72 3.4.1Ford 72 3.4.2HutchisonWhampoa 72

2012YearbookontheInternationalizationofSpanishCompanies

YearbookontheInternationalizationofSpanishCompanies2012

8

4.TheNewLatinArgonauts:CouldtheyhelpintheinternationalisationofSpain?(Author:JavierSantiso) 75

4.1TheLatinAmericandiaspora 76 4.2TheEntrepreneurdiasporainSpain 79 4.3Conclusion 81

5.Internationalizationofthecompany(Author:PabloIsla) 83

6.StatisticalAnnex 87

7.Bibliography 99

8.RecentpublicationsoftheCírculodeEmpresarios 101

2012 Yearbook on the Internationalization of Spanish Companies

List of Tables

9

Table 1.1: IMF forecasts on GDP growth 19Table 1.2: Spanish non-financial multinationals among the world’s leaders by international presence, 2011 21Table 1.3: GDP and trade in goods by regions, 2009-2011 24 Table 1.4: Main exporter of goods, 2011 25Table 1.5: Main importers of goods, 2011 26Table 1.6: Major cross-border mergers and acquisitions worldwide in 2011 29Table 1.7: Balance of payments: balances 30Table 1.8: Foreign trade in goods, specialization by product 31Table 1.9: Foreign trade in goods, specialization by geographical area 32Table 1.10: Spain’s foreign trade performance by geographical area 33Table 1.11: Geographical breakdown of remittance payments in 2010 and 2011 34Table 1.12: Foreign Direct Investment transactions in 2010 and 2011. Breakdown by sector of economic activity 36Table 1.13: Foreign Direct Investment transactions in 2010 and 2011. Breakdown by geographical area 37Table 1.14: International investment position. Breakdown by sector (% of GDP) 38Table 1.15: International investment position Breakdown by instruments (% of GDP) 39

Table 2.1: Top 25 Spanish companies by total shareholder return rate in 2011 44Table 2.2: Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 2011 figures) 45Table 2.3: Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 1995-2011 average) 46Table 2.4: Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 1995-2011 average) 47Table 2.5: Top Spanish companies by total shareholder return rate in 2010, relative to companies in the same sector in Euro area 48Table 2.6: Stock market analysts` recommendations on IBEX 35 companies, 1998-2011 50Table 2.7: Top 10 Spanish companies by average recommendation from stock market analysts in 2011, compared to companies in the same sector within the Euro area 52Table 2.8: Top 25 Spanish companies by references in the international financial press, 1995-2011 56Table 2.9: Top 25 Spanish companies by references in the international financial press in 20101, by publication 58


List of Charts

10

Chart 1.1: FDI inflows 1980-2011 27Chart 2.1: Number of references to Spanish companies in articles published in the international financial press, 1995-2011 55Chart 2.2: Top 5 Spanish companies by references in the international financial press, 1995-2011 57Chart 2.3: Number of references to Spanish companies in articles published in the international financial press, by publication, 1995-2011 59

List of BoxesBox 1.1: Commodity price performance in 2011 and 2012 22Box 2.1: The Total Shareholder Return Rate 42Box 2.2: Stock market analysts` recommendations 49Box 2.3: Methodology for compling references to Spanish companies in the international financial press 53

This is the sixth edition of the Yearbook on the Internationalization of Spanish Companies, pu-blished by the Círculo de Empresarios in con-junction with the University of Pennsylvania’s prestigious Wharton School. From the outset, the Círculo-Wharton Yearbook has pursued the dual objective of gauging the activity of Spanish companies abroad whilst encouraging those that have not yet made the decision to interna-tionalize to take this decisive step, so essential for their development and survival. This joint project has resulted in the consolidation of an excellent observatory of the performance of our companies abroad.

Since the launch of the Yearbook to date, the world economy, and most notably Spain’s, have been ravaged by one of the worst crises in his-tory. Recovery still remains weak. Despite the gloomy outlook, companies that have taken the decision to venture abroad, or to further their internationalization goals have reaped the be-nefits of market diversification, even though the global crisis is very much alive.

As stated in previous editions of this Yearbook, in a highly globalized economy, the quest for new markets and increased foreign presence are the most advisable strategies. This 2012 edition discusses clear examples of companies that have successfully applied these principals. In this connection, I would like to congratulate

the managers of Spanish companies who have looked abroad with a spirit of optimism and confidence. And, in particular, I would like to highlight the efforts of those companies which, based on a survey of Círculo members, have been distinguished in this Yearbook. Once again, I would like to thank Wharton School, one of the world’s most prestigious academic establishments in all aspects rela-ting to the business world, for its collaboration, which is pivotal to the ongoing success of this publication. I would also like to thank everyone from Wharton and Círculo de Empresarios in-volved in producing the Yearbook. And a very special thanks to Pablo Isla, the Chair of the Inditex Group and to Javier Santiso, Professor of Economics at ESADE Business School, for their contribution to this new edition.

Many thanks to all, and thanks to the loyal readers whose interest makes our efforts wor-thwhile.

Presentation

Mónica de OriolChair of Círculo de Empresarios

13



In 2011 the world economy continued to reco-ver. However, this recovery was undermined by the uncertainties and lack of confidence which flooded the markets, affecting most no-tably the developed economies. Consequently, world growth fell from 5.1% in 2010 to 3.8% in 2011, as noted by the International Monetary Fund in its latest report World Economic Out-look, October 2012. Moreover, there are fears that the European crisis may worsen the global economic scene, which has prompted the IMF to revise downwards the growth data relating to the world economy for 2012 and 2013.

The economic policies implemented by govern-ments, unilaterally or in a coordinated fashion, helped reduce systemic risk. However, these measures need to be strengthened so as to consolidate the recovery and contain downside risks. The priorities in developed countries con-tinue to be reform of the financial sector, fiscal consolidation and structural reforms to boost potential output. In emerging and developing countries, it is necessary to introduce greater macroeconomic discipline, avoiding the build-up and widening of imbalances.

In the specific case of the Spanish economy, according to data from the International Mone-tary Fund, while GDP improved slightly (0.4%) in 2011, forecasts for 2012 and 2013 predict falls

of -1.5% and -1.3% respectively, which confirms the fragility of the recovery.

Despite this complicated economic situation, many national companies continue to opera-te abroad, pursing their internationalization strategy. In addition, some bolstered their pre-sence in the rankings of the UNCTAD World Investment Report, which refer to the world’s leading multinationals, and in other well-known league tables such as Fortune Global 500 or Forbes 2000.

The sixth edition of the Internationalization of Spanish Companies Yearbook covers these and other phenomena. Through this pu-blication, once again this year, Círculo de Em-presarios wishes to offer the public an instru-ment with which to gain insight into the foreign activity of Spanish companies and the most significant challenges they face going forward. The 2012 Yearbook is structured into two main parts:

• The first, which comprises three chap-ters, examines the economic context in which Spanish companies are operating both in Spain and abroad, as well as their achievements and challenges.

Prologue

15

Yearbook on the Internationalization of Spanish Companies 2012

Chapter one offers a brief overview of the glo-bal and national economic framework, and an analysis of the main characteristics of interna-tional trade and direct foreign investment for the period 2011-2012.

The second chapter reviews, from the interna-tional standpoint, the performance of Spanish companies in terms of total shareholder returns, equity market analysts’ recommendations and companies’ coverage in the international finan-cial press. In general, the situation in 2011 re-presents a continuation of the negative trends from 2010 in relation to stock market perfor-mance and, in particular, investment banks’ equity market analysts’ recommendations. Shareholder returns fell sharply in outright terms, although in comparison with the Euro Area, the drop was less dramatic. Investment bank recommendations deteriorated steadily, which, on interpretation, may reflect the antici-pation of analysts who predict new difficulties in 2012. Owing to the problems faced by Spa-nish financial and non-financial companies, the coverage of Spanish companies in the interna-tional financial press increased significantly in 2011, surpassing the 2006 coverage record.

This part ends with chapter three, in which Cír-culo de Empresarios recognizes the work of those Spanish companies which, through their internationalization, contribute to Spain’s glo-bal economic reach. There is a special mention for overseas business operations conducted by Spanish companies which, according to the members of Círculo de Empresarios, are espe-cially significant, and for both medium and lar-ge companies with an outstanding track record of internationalization over the past few years. Lastly, and as a new feature of this sixth edition,

two operations involving foreign investment in Spain receive a mention.

• The second part comprises, on this oc-casion, two chapters. The first chapter focuses on the importance of business diasporas, Latin ones in particular, in driving the internationa-lization of the Spanish economy. This chapter has been written by Javier Santiso, Professor of Economics at ESADE Business School.

The second article in this section, which bears the signature of Pablo Isla, the Chairman and CEO of the Inditex Group, discusses the inter-nationalization experience of this textile group, an international leader in the fashion industry.

Belén Romana, General Secretary of Círculo de Empresarios

16


The world and Spanish economiesin 2011-2012

Throughout 2011, the world economy slowed down, highlighting the fragility of the reco-very, especially in the developed economies. Consequently, having closed 2010 with 5.1% growth, driven by gains in the main production ratios in emerging, developing economies and advanced economies, the world economy closed 2011 with 3.8% growth, according to the latest figures published by the IMF (Table 1.1).

19

1

2010 2011 2012* 2013*World 5.1 3.8 3.3 3.6

Advanced economies 3.0 1.6 1.3 1.5

United States 2.4 1.8 2.2 2.1

European Union 2.1 1.6 -0.2 0.5

Euro area 2.0 1.4 -0.4 0.2

Germany 4.0 3.1 0.9 0.9

France 1.7 1.7 0.1 0.4

Italy 1.8 0.4 -2.3 -0.7

Spain -0.3 0.4 –1.5 -1.3

Japan 4.5 -0.8 2.2 1.2

United Kingdom 1.8 0.8 -0.4 1.1

Canada 3.2 2.4 1.9 2.0

Other advanced economies 5.9 3.2 2.1 3.0

Newly industrialized Asian economies 8.5 4.0 2.1 3.6

Emerging and developing economies 7.4 6.2 5.3 5.6 Sub-Saharan Africa 5.3 5.1 5.0 5.7

Central and Eastern Europe 4.6 5.3 2.0 2.6

Commonwealth of Independent States 4.8 4.9 4.0 4.1

Russia 4.3 4.3 3.7 3.8

Excluding Russia 6.0 6.2 4.7 4.8

Developing Asia 9.5 7.8 6.7 7.2

China 10.4 9.2 7.8 8.2

India 10.1 6.8 4.9 6.0

ASEAN 5 ** 7.0 4.5 5.4 5.8

Middle East and North Africa 5.0 3.3 5.3 3.6

Latin American and the Caribbean 6.2 4.5 3.2 3.9

Brazil 7.5 2.7 1.5 4.0

Mexico 5.6 3.9 3.8 3.5 * Forecasts ** ASEAN 5: Phillipines, Indonesia, Malasia, Thailand and Vietnam.

IMF forecasts on GDP growth Table 1.1 Source: IMF (WEO October 2012)Percentage variation


20

Growth in the euro area slowed down in 2011 and forecasts for 2012 point to negative growth (-0.4%). This evolution has been strongly influenced by the performance of the financial mar-kets, affected by the debt crisis in the euro area. Tensions in the markets increased notably from summer 2011, on becoming systemic, and amid growing fears of feedback between sovereign risk, bank risk and loss of economic dynamism in several countries in the euro area.

In Spain, financing terms became tougher and bond yields reached all time highs. The eco-nomic situation was very complicated. In 2011, average annual growth stood at 0.4%, and negative growth has been forecast for 2012 and 2013. The contribution of internal demand was once again negative (-1.9%), while for the fourth consecutive year, the contribution of net external demand was positive (2.3 pp).

In this context, the IMF warned of the persistence of global downside risks. The con-cern is that the deepening of the crisis in the euro area may trigger a widespread shift towards lower risk assets or that political uncertainty may cause a hike in oil prices. Furthermore, the implementation of excessively restrictive measures may lead to a situation of sustained deflation or a prolonged period of very subdued activity in some of the major economies. According to this Organization, other latent risks include turmoil on the global bond and world foreign currency markets due to high budget deficits in Japan and USA, and a rapid slowdown in the activity of some emerging economies.

Economic policy measures taken to date have helped reduce the systemic risk. However, in the face of persistent uncertainty, these measures need to be strengthened so as to con-solidate the recovery which has been weak so far and to contain downside risks. In the short term, this involves stepping up efforts to tackle the crisis in the euro area, reducing fiscal austerity in response to the downturn in activity, and maintaining lax monetary policies and ample liquidity for the financial sector.

In the long term, the challenge consists in improving medium term prospects for the major advanced economies. The priorities continue to be reform of the financial sector, fiscal con-solidation and structural reforms to boost potential output.

In the case of emerging and developing economies, there is a need to gauge the macroeco-nomic policies so as to tackle the downside risks of the advanced economies, by controlling the overheating pressures resulting from greater activity, credit growth, and volatile capital flows, as well as high commodity prices and the recurrence of risks related to energy prices (Box 1.1).

The IMF, in its latest report World Economic Outlook, has broadly revised downwards fore-casts for 2012 and 2013. World growth will fall by 0.2% in 2012 and 0.3% in 2013. The Euro Area will also experience negative growth in both periods, of -0.1% and -0.5% respectively. In the specific case of Spain, the economy will contract by 1.5% in 2012 and 1.3% in 2013.

In this scenario, world trade suffered a severe setback in 2011, posting a volume growth of 5%, compared to 13.8% in 2010.

According to statistics compiled by the World Trade Organization (WTO) and published in the World Trade Report 2012, in 2011, Spain maintained its position as the 18th largest exporter of goods in the world (with a share of 1.6% of the world total) and in relation to imports, Spain clim-bed a position, ranking 15th (holding a share of 2%). With regard to trade in services, Spain ad-vanced a position to rank 8th for exports (3.4%), and remained in 14th place for imports (2.4%).


21

Regarding foreign direct investment (FDI), global inflows grew 16% in 2011, surpassing for the first time the average for the three years preceding the outbreak of the world economic and financial crisis (2005-2007), but not exceeding the high of 2007.

According to the data published in the World Investment Report 2012 by the UNCTAD, in 2011, Spain recovered the status it had lost in 2010 as a net foreign investor (in terms of FDI). This can be accounted for by the sharp drop in FDI inflows (-27.7% compared with 2010), while outflows stabilised. In 2011, Spain retained 15th position in the world ranking of FDI flows received and 14th in terms of outflows of this kind of investment.

As to cumulative FDI, Spain maintains a relatively stable position. With 3.1% of the world to-tal, Spain fell two places to 9th position, losing ground to China and Brazil, in terms of stock received. And with 3% of the world total, Spain ranked 11th in terms of stock abroad, losing a position to Canada.

Finally, setting aside the doubts regarding the future of the world economy and of Spain’s in particular, some Spanish companies have decided to start or to continue their internationa-lization processes, a clear exponent of which are the operations and companies mentioned in Chapter 3 of this Yearbook. This is fully consistent with the role played by the Spanish eco-nomy on the international stage, since its activity in the various areas of the world economy surpasses even its contribution to global GDP, which in 2011, fell below 1.8% in purchasing power parity terms.

The rankings of the world’s top multinationals published in WIR 2012 underpin this idea. Among the top 100 non-financial multinationals, three are Spanish companies, holding the following positions in terms of assets abroad: Telefónica (ranked 10th), Iberdrola (25th) and Repsol (47th) (Table 1.2).

Other well-known league tables confirm this impression. There are 8 Spanish companies in the Fortune Global 500 index of leading worldwide companies. There are 28 Spanish compa-nies in the Forbes 2,000 index, which refers to the top 2,000 global companies.

Assets Sales Employees

Abroad Total % of total Abroad Total % of total Abroad Total % of total

Telefónica S.A. 147,903 180,186 82.1 63,014 87,346 72.1 231,066 286,145 80.8

Iberdrola S.A. 88,048 134,702 65.4 23,211 44,896 51.7 19,436 31,885 61.0

Repsol YPF S.A. 58,336 98,634 59.1 44,115 83,572 52.8 26,441 46,575 56.8

Spanish non-financial multinationals among the world’sleaders by international presence, 2011 Table 1.2

Source: WIR 2012, UNCTADMillions of dollars and number of employees

22


Box 1.1 Commodity price performance in 2011 and 2012

Any analysis of the global economic situation must include a look at commodity price performance, in view of its enormous impact in a number of areas, from glo-bal inflation to access to food in developing countries.

World commodity markets lost some momentum in 2011. Prices fell for most of the year, with the exception of the crude oil price. In the first quarter of 2012, commo-dity prices picked up, but in general terms, they remain below the levels recorded at the end of 2010.

Some of the main factors that account for the fall in prices in 2011 are uncertainty regarding the short term global economic outlook; a more marked downswing than expected in emerging and developing economies; a downturn in the Chinese pro-perty market, increasing concerns over a hard landing in the country; and doubts as to the continuance of the commodity market boom.

Crude petrol prices performed differently, which was mainly due to heightened geopolitical risks.

Index of commodity prices

Source: IMF (2005=100)

70

90

110

130

150

170

190

210

230

2005M9

2005M12

2006M3

2006M6

2006M9

2006M12

2007M3

2007M6

2007M9

2007M12

2008M3

2008M6

2008M9

2008M12

2009M3

2009M6

2009M9

2009M12

2010M03

2010M06

2010M09

2010M12

2011M03

2011M06

2011M09

2011M12

2012M03


23

World oil demand in 2011 was lower than expected owing to weaker global activity. However, the supply disruptions in major oil-producing economies (particularly Libya) interruptions due to maintenance and other reasons in non-OPEC oil produ-cing countries led to supply shortages which pushed up prices.

Additional production by other OPEP members, primarily Saudi Arabia, and the weakening of demand enabled the matching of supply and demand at the end of the last quarter. However, at that time, the oil stocks of the OECD economies and the surplus capacity of the OPEC had fallen below five-year averages. At the same time, geopolitical risks increased, pushing up the precautionary demand for stocks. These events took place in a context of persistent oil shortages. In these circumstances, price increases are inevitable.

Forecasts point to little improvement in conditions in the oil markets, since supply from non-OPEC countries is only expected to increase moderately in the short term. On the basis of the future prices for oil, it is anticipated that spot prices will drop gradually but remain above the average level until 2012-13. Since inventory stocks and surplus capacity are below average, the upside risks for oil prices re-main a cause for concern, in spite of the downside risks for oil demand and global economic growth.

International trade 1.1

Global trade slumped in 2011, following the significant recovery in 2010. The reasons that account for this fall include in par-ticular financial and economic uncertainly at interna-tional level (negative growth recorded in the European Union or the debt crisis in the euro area), civil strife (rioting in North African countries, especially in Lib-ya) and natural disasters (the earthquake, the tsuna-

mi and the nuclear accident in Japan or the floods in Thailand).

As a result, trade growth in 2011 was below average. According to the WTO the volume of global trade in goods grew 5% (in real terms), compared to 13.8% in 2010 (Table 1.3).

24


GDP and trade in goods by regions, 2009-2011Table 1.3 Source: WTO SecretariatAnnual percent change at constant prices

According to IMF forecasts, real growth in world trade will be even lower for 2012, falling to 3.2%, but will be followed by an acceleration in 2013 (4.5%).

As to export performance, Asia, with an increase of 6.6%, was ahead of all the other regions. The increa-ses of 16.1% in India and 9.3% in China are noteworthy.

Export growth in the developed economies in 2011 ex-ceeded expectations, reaching 4.7%, on the back of a sharp rise (7.2%) in US exports as well as an expansion of 5.2% in EU exports.

For their part, the results of the developing economies (including those of the CIS) were lower than forecast, with an increase of barely 5.4%. The factors that con-tributed to their worst performance in exports were the interruptions in oil supply from Libya (75% reduction), which led to an 8.3% fall in African exports in 2011; the floods in Thailand; the earthquake and the tsunami in

Japan (reducing its exports by 0.5%), disrupting supply chains which affected exports from developing coun-tries such as China - fewer components were sent, which led to a reduction in the output of export goods.

As to imports, demand in 2011 was adversely affected by sluggish growth in the major economies, its growth falling from 13.7% in 2010 to 4.9% in 2011. By regions, the CIS experienced the highest growth (16.7%), which accounts for the greater increase in developing eco-nomies and the CIS (7.9%), compared with developed economies (2.8%).

In 2011, exchange rates were considerably volatile, which affected the competitiveness of some econo-mies and prompted measures to be taken (Switzerland and Brazil). The fluctuations were largely due to attitu-des towards risk in relation to the sovereign debt crisis in the euro area.

GDP Exports Imports

2009 2010 2011 2009 2010 2011 2009 2010 2011

World -2.6 3.8 2.4 -12.0 13.8 5.0 -12.9 13.7 4.9

North America -3.6 3.2 1.9 -14.8 14.9 6.2 -16.6 15.7 4.7

US -3.5 3.0 1.7 -14.0 15.4 7.2 -16.4 14.8 3.7

Central and South America a -0.3 6.1 4.5 -8.1 5.6 5.3 -16.5 22.9 10.4

Europe -4.1 2.2 1.7 -14.1 10.9 5.0 -14.1 9.7 2.4

European Union (27) -4.3 2.1 1.5 -14.5 11.5 5.2 -14.1 9.5 2.0

Commonwealth of Independent States (CIS)b -6.9 4.7 4.6 -4.8 6.0 1.8 -28.0 18.6 16.7

Africa 2.2 4.6 2.3 -3.7 3.0 -8.3 -5.1 7.3 5.0

Middle East 1.0 4.5 4.9 -4.6 6.5 5.4 -7.7 7.5 5.3

Asia -0.1 6.4 3.5 -11.4 22.7 6.6 -7.7 18.2 6.4

China 9.2 10.4 9.2 -10.5 28.4 9.3 2.9 22.1 9.7

Japan -6.3 4.0 -0.5 -24.9 27.5 -0.5 -12.2 10.1 1.9

India 6.8 10.1 7.8 -6.0 22.0 16.1 3.6 22.7 6.6

Newly industrialized countries c -0.6 8.0 4.2 -5.7 20.9 6.0 -11.4 17.9 2.0

Developed economies -4.1 2.9 1.5 -15.1 13.0 4.7 -14.4 10.9 2.8

Developing economies and CIS 2.2 7.2 5.7 -7.4 14.9 5.4 -10.5 18.1 7.9

a Including the Caribbeanb It is a supranational organization comprising 10 former Soviet republicsc Hong Kong, China, Rep. of Korea, Singapore and Chinese Taipei


25

Main exporter of goods, 2011 Table 1.4

Source: WTO

Nominal trade flows were also affected by recent eco-nomic shocks. In 2011, the value in dollars of world trade in goods rose 19% to reach 18.2 trillion dollars, exceeding the high (16.1 trillion dollars) attained in 2008. A substantial proportion of this growth was due to the increase in commodity prices.

The share held by the developing and CIS economies in the world total rose to 47% in the case of exports and 42% for imports.

With regard to exports of goods, in 2011, China retai-ned its world leadership (Table 1.4). It has gradually distanced itself from the US and Germany to hold a 2-point lead in terms of share of total world exports, with a share of 10.4%.

Billions of dollars and by percentage

Rank ValuePercentage asper global total

Annual percentagevariation

China 1 1,899 10.4 20

United States 2 1,481 8.1 16

Germany 3 1,474 8.1 17

Japan 4 823 4.5 7

Netherlands 5 660 3.6 15

France 6 597 3.3 14

Rep. of Korea 7 555 3.0 19

Italy 8 523 2.9 17

Russia 9 522 2.9 30

Belgium 10 476 2.6 17

United Kingdom 11 473 2.6 17

Hong Kong, China 12 456 2.5 14

- National exports 17 0.1 14

- Reexports 439 2.4 14

Canada 13 452 2.5 17

Singapore 14 410 2.2 16

- National exports 224 1.2 23

- Reexports 186 1.0 10

Saudi Arabia 15 365 2.0 45

Mexico 16 350 1.9 17

Chinese Taipei 17 308 1.7 12

Spain 18 297 1.6 17

India 19 297 1.6 35

United Arab Emirates 20 285 1.6 30

26


Finally, as far as trade in services is concerned, the value of world exports increased 11% in 2011 to 4.1 trillion dollars, with marked differences in the annual growth rates of the various countries and regions. For instance, African exports were seriously affected by the rioting in the Arab countries and experienced zero

growth owing to the fact that Egyptian exports in tra-vel-related services dropped by over 30%.

The proportion of trade in services in total trade in goods and services stood at 18.6%, the lowest level since 1990.

Likewise, China increased its proportion of total world imports (Table 1.5), attaining a 9.5% share and conso-lidating its second position behind the USA. However,

it continues to close this distance in the ranking of the top importers of goods.

Main importers of goods, 2011Table 1.5

Source: WTOBillions of dollars and by percentage

Rank ValuePercentage as per

global totalAnnual percentage varia-

tion

United States 1 2,265 12.3 15

China 2 1,743 9.5 25

Germany 3 1,254 6.8 19

Japan 4 854 4.6 23

France 5 715 3.9 17

United Kingdom 6 636 3.5 13

Netherlands 7 597 3.2 16

Italy 8 557 3.0 14

Rep. of Korea 9 524 2.9 23

Hong Kong, China 10 511 2.8 16

- Imports-reimports 130 0.7 16

Canada a 11 462 2.5 15

Belgium 12 461 2.5 17

India 13 451 2.5 29

Singapore 14 366 2.0 18

- Imports-reimports 180 1.0 27

Spain 15 362 2.0 11

Mexico 16 361 2.0 16

Russia a 17 323 1.8 30

Chinese Taipei 18 281 1.5 12

Australia 19 244 1.3 21

Turkey 20 241 1.3 30

a Imports according to FOB values


27

According to estimates published by the United Nations Conference on Trade and Development (UNCTAD), which is the main source of statistical data on this subject, in spite of the throes of the world eco-nomic and financial crisis and the debt crisis, in 2011, global Foreign Direct Investment (FDI) flows exceeded the average level attained in the period prior to the world economic and financial crisis, reaching 1.5 tri-llion dollars. The actual growth rate was 16%. However, the level remains 23% below the 2007 record.

Some of the factors that boosted this growth were hig-her profits earned by multinationals and the relatively strong growth of developing economies.

The inflows of this kind of investment increased across the board in 2011 (Chart 1.1). In developed countries,

they rose 21% with respect to 2010, reaching 748 billion, but are still 25% below the average attained between 2005 and 2007. In spite of this progression, developing and transition economies taken together accounted for over half of global FDI (45% and 6% respectively). In the first group, FDI inflows increased 11%, reaching a record figure of 684 billion - 10% in Asia, and 16% in Latin American and the Caribbean. And in the transition economies, the increase was 25%, to 92 billion. Africa and less developed econo-mies experienced a fall in FDI inflows for the third con-secutive year. In Africa, the regression is essentially explained by divestment in North Africa (specifically to Egypt and Syria, due to political instability).

Foreign direct investment 1.2

FDI inflows 1980-2011 Chart 1.1Source: UNCTADBillions of dollars

1991

2,500.0

2,000.0

1,500.0

1,000.0

500.0

0.0

198

0

1981

198

2

198

3

198

4

198

5

198

6

198

7

198

8

198

9

199

0

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

201

0

201

1

Transition economies

Developing economies

Developed economies

Wo

rld

28


As to FDI outflows, flows towards advanced countries rose sharply by 25% in 2011, reaching 1.24 trillion do-llars. This increase is essentially explained by reinves-tment of profits from US multinationals (82% of total outflows), mergers and acquisitions of the European Union, and Japanese purchases in North America and Europe favoured by the appreciation of the yen.

Investment from developing countries fell 4% to 384 billion, while their share of global outflows remained high at 23%. FDI from Latin America and the Caribbean fell 17%, essentially due to the repatriation of capital owing to financial considerations (exchange rate, in-terest rate etc.). In the case of East and Southeast Asia, the flows stagnated, while those from West Asia rose to 25 billion.

By sectors, FDI flows rose in three production sectors: primary, manufacturing and services. In the service sector, FDI recovered in 2011 after falling in 2009 and 2010, to reach 570 billion. Similarly, investment in the primary sector changed trend, reaching 200 billion. The share of both sectors increased at the expense of industry, where investment in the following areas is noteworthy: the mining and chemical industries, uti-lities, transport, communication and other services.

By FDI entry modes, cross-border mergers and acqui-sitions rose 53% in 2011 to 526 billion dollars, driven

by the increase in the number of mega-operations (for more than 3 billion dollars) from 44 in 2010 to 62 in 2011, which is a reflection of the increase in the value of assets on the stock markets and the greater finan-cial capacity of buyers.

New investment (greenfield) stayed around 904 billion (more than two thirds invested in developing and tran-sition economies), and continues to outstrip mergers and acquisitions, as has been the case since the start of the crisis.

On a corporate level, in 2011, despite the turbulent economic situation, important operations were per-formed throughout the globe, as evidenced by the UNCTAD ranking of the largest mergers and acquisi-tions in the world (Table 1.6).

Finally, forecasts regarding performance of FDI flows have improved continuously from 2008-2009, while still being subject to macroeconomic and financial conditions. Due to economic uncertainty, UNTCAD forecasts point to a slowing of the upward trend. Growth in FDI is expected to slow, leveling off in 2012 at around 1.6 billion dollars. Longer term forecasts, for 2013 and 2014, indicate a moderate rise to 1.8 trillion and 1.9 trillion, respectively.


29

Major cross-border mergers and acquisitions worldwide in 2011 Table 1.6

Source: UNCTAD, WIR 2012 US$ billions

Ranking AmountObjective Buyer

Company/ country /sector Company/ country

1 25.1GDF Suez Energy International Power PLC

(Belgium) Natural gas transmission (United Kingdom)

2 22.4Weather Investments Srl VimpelCom Ltd

(Italy) Telecommunications (Netherlands)

3 21.2Genzyme Corp Sanofi-Aventis SA

(United States) Biological products, except substance analysis (France)

4 13.7Nycomed International Management GmbH Takeda Pharmaceutical Co Ltd

(Switzerland) Pharmaceutical products (Japan)

5 11.8Petrohawk Energy Corp BHP Billiton PLC

(United States) Oil and natural gas (United Kingdom)

6 10.8Foster´s Group Ltd SABMiller Beverage Investments Pty Ltd

(Australia) Beverages (Australia)

7 9.4Centro Properties Group BRE Retail Holdings Inc

(United States) Property (United States)

8 9.0Reliance Industries Ltd BP PLC

(India) Oil and natural gas (United Kingdom)

9 8.5Skype Global Sarl Microsoft Corp

(Luxemburg) Software (United States)

10 7.8Morgan Stanley Mitsubishi UFJ Financial Group Inc

(United States) Bank holdings (Japan)

Spain’s foreign sector 1.3

A) Analysis of the Balance of Payments: current account and capital account balance

Spain’s external imbalances continued their course of ad-justment in 2011. According to the data compiled in the report on the balance of payments 2011 (Table 1.7), pu-blished by the Bank of Spain in 2012, the funding requi-rements for Spain’s economy from external sources, measured as the overall balance of the current and capital account, fell further in 2011 (by 22%) to 3% of GDP (practi-cally one point lower than in 2010).

The lower recourse to external funding can be explained broadly by the decline in investment, to 22.1% of GDP (against 23.3% in 2010), since gross national savings fell moderately to 18.7 % of GDP (0.6 pp less than the previous year).

30


Balance of payments: balancesTable 1.7 Source: Bank of Spain% of GDP

2004 2005 2006 2007 2008 2009 2010 2011

CAPACITY (+)/FUNDING (-) REQUIREMENTS -4.2 -6.5 -8.3 -9.6 -9.1 -4.4 -3.9 -3.0

Current account -5.3 -7.4 -9.0 -10.0 -9.7 -5.2 -4.5 -3.5

Goods -6.4 -7.5 -8.5 -8.7 -8.0 -4.0 -4.4 -3.7

Services 2.6 2.4 2.3 2.2 2.4 2.4 2.6 3.2

- Travel and tourism 3.2 2.9 2.8 2.6 2.6 2.5 2.5 2.9

- Other services -0.6 -0.5 -0.5 -0.4 -0.1 -0.1 0.1 0.3

Income -1.4 -1.9 -2.1 -2.9 -3.3 -2.8 -2.0 -2.4

Current transfers 0.0 -0.4 -0.7 -0.7 -0.9 -0.8 -0.7 -0.6

Capital account 1.0 0.9 0.6 0.4 0.5 0.4 0.6 0.5

FINANCIAL ACCOUNT a 4.1 6.7 8.7 9.6 9.2 5.0 4.1 3.2

Excluding Bank of Spain 5.8 6.9 11.3 8.3 5.9 4.2 2.6 -7.1

Foreign direct investment -3.4 -1.5 -6.0 -4.8 -0.7 -0.1 -0.1 -0.6

Portfolio investment 10.2 6.5 20.3 10.0 0.4 4.3 2.9 -2.3

Other investments -1.0 1.9 -3.2 3.5 7.0 0.5 -0.9 -4.5

Financial derivatives 0.0 0.0 -0.2 0.4 0.6 -0.6 0.8 0.2

Bank of Spain b -1.7 -0.2 -2.6 1.4 2.8 1.0 1.5 10.2

ERRORS AND OMISSIONS 0.1 -0.2 -0.4 0.0 -0.1 -0.5 -0.2 -0.1

a Variation in liabilities less variation in assetsb A negative (positive) sign implies an increase (decrease) in the Bank of Spain’s net assets vis-à-vis abroad

In 2011, the current account deficit recorded a new low in the series since 2004, by falling to 3.5% of GDP, against 4.5% in 2010. The correction of the deficit is primarily attributable to the improvement in the trade balance. A contribution was also made by the increa-se in the services surplus and the reduction in the current transfers deficit, which offset the marked de-terioration in the negative income balance, caused by higher funding costs. As far as the capital account is concerned, the surplus shrank by one tenth, to 0.5% of GDP.

In 2011, the trade deficit fell considerably, to 3.7% of GDP (0.8 pp lower than in 2010), especially due to the marked decrease in the non-energy trade balance (-69%), since the energy trade balance continued to rise (16%) due to high oil prices.

The trade balance in relation to the EMU and the UE was positive for the first time since the mid 1980s.

As to trade flows, exports grew 15% (despite the down-turn in global trade), against 8.7% for imports. The an-nual coverage ratio (exports/imports) was above 80%. Moreover, in light of the performance of exports, the percentage share of Spain in world trade, in real terms, continued to grow for the third consecutive year.

This progression is largely explained by the impact on exports of accumulated gains in competitiveness-price and competitiveness-cost in recent years. In addition, this effect has been strengthened by the growth in the number of international trade relations, favoured by the increase in the number of exporting countries, (12.5% in 2012) and by the diversification of destinations where Spanish companies operate.


31

In terms of the Quarterly National Accounts (CNTR), real exports of goods grew in 2011 by 9.5%. According to Customs, the increase was 10.1%. Both figures re-flect the strength of exports in the context of a down-turn in global trade and, in particular, the strength of Spain’s export markets. However, while in real terms the share of Spanish exports in the world total rose, in nominal terms, it fell, due to higher energy costs.

By sectors, there were no significant changes in Spain’s trade pattern in 2011 (Table 1.8). In relation

to this marked progression in exports, capital goods as well as intermediate goods played an important role, at the same time, consumer goods showed no-table recovery (5.4% in 2011), in particular foods and other manufactured products. Actual sales of capital goods increased by 15.9% in 2011, owing to exports of rail and air transport material, and construction ma-chinery. Exports of energy intermediate goods grew 36.7% and non-energy intermediate goods by 10.7%.

Foreign trade in goods, specialization by product

Source: Own research based on data from the Spanish Ministry of Economy and Competitiveness% of total

Table 1.8

2011Products Exports ImportsFoods 14.2 10.4

Energy products 7.4 21.4

Commodities 2.7 4.3

Non-chemical semimanufacturing 12.2 7.5

Non-ferrous metals 2.2 1.4

Iron and steel 4.1 3.1

Paper 1.6 1.3

Ceramic products and similar items 1.3 0.2

Other semimanufacturing 3.0 1.5

Chemical products 13.7 14.5

Organic chemical products 1.6 2.8

Inorganic chemical products 0.4 0.8

Plastics 3.8 3.0

Medicines 4.1 4.3

Fertilizers 0.3 0.3

Tanning and dyeing products 0.9 0.5

Perfumes and essential oils 1.5 1.1

Rest of chemical products 1.2 1.8

Capital goods 20.1 17.9

Industrial machinery 5.1 4.6

Office equipment and telecommunications 1.3 4.5

Transport material 5.1 1.8

Other capital goods 8.6 7.0

Automotive sector 15.4 10.4

Cars and motorcycles 10.5 4.2

Auto parts 5.0 6.2

Durable consumer goods 1.7 2.5

Consumer manufacturing 8.2 10.5

Textiles and clothing 4.6 5.9

Footwear 1.0 0.9

Toys 0.3 0.7

Other consumer manufacturing 2.3 3.0

Other goods 4.4 0.7

32


By geographical areas (Tables 1.9 and 1.10), as in 2010, it is worth highlighting the growth in nominal terms of sales outside the EU to the OPEC countries, Russia and associated countries as well as Japan and China. While exports to the euro area slowed down, those destined for France and Germany showed sig-nificant progress.

Imports suffered a setback, with a real growth rate of 0.6% in 2011, according to data from the Quarterly National Accounts, and 1% according to Customs. This lower growth is mainly due to weak domestic de-mand for consumption and investment, the downturn in exports and the increase in prices, in particular of commodities.

By sectors, in real terms, imports of consumer goods fell 2.2% and imports of capital goods by 3.1%. Inter-mediate goods sales halted their progression, falling from 19.1% in 2010 to 2.6% in 2011, owing in particular to the slowdown in purchases of non-energy interme-diate goods.

By geographical areas, in real terms, purchases outsi-de the EU (from Russia, Latin America etc.) grew more sharply than those from the euro area, whose relative weighting as a goods supplier for Spain fell further. It is worth emphasizing the weighting of imports from France, Germany and Italy.

Foreign trade in goods, specialization by geographical areaTable 1.9 Source: Spanish Ministry of Economy and Competitiveness% of total

2011

Regions/countries Exports Imports

EUROPEAN UNION 66.0 52.8

EURO AREA 52.8 42.8

France 17.9 10.8

Germany 10.2 11.8

Italy 7.9 6.6

Portugal 8.0 3.9

REST OF EU 13.3 10.0

United Kingdom 6.4 4.0

REST OF EUROPE 7.6 6.9

Russia 1.2 3.2

NORTH AMERICA 4.2 4.5

US 3.7 4.1

LATIN AMERICA 5.6 6.1

Mexico 1.4 1.4

Brazil 1.2 1.4

Argentina 0.5 0.8

REST OF AMERICA 0.1 0.6

ASIA 7.9 19.8

India 0.6 1.1

China 1.6 7.1

Japan 0.9 1.2

AFRICA 5.4 8.9

Morocco 1.9 1.2

Algeria 1.2 2.2

OCEANÍA 0.8 0.5

Australia 0.7 0.3

OECD 77.8 64.2

NAFTA 5.6 5.9

MERCOSUR 1.8 2.3

OPEC 3.9 11.2


33

Spain’s foreign trade performance by geographical area Table 1.10

Source: Bank of Spain. Balance of Payments Report

a Provisional data, Department of Customsb Including Russia, Ukraine, Belorussia, Moldavia, Georgia, Armenia, Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Romania, Bulga-ria, Albania, Croatia, Bosnia and Herzegovina, Serbia and Montenegroc Includes Republic of Korea, Taiwan, Hong Kong and Singapored Does not include items without geographical allocation

Nominal variation

Total

2005-09 2010 a 2011 a

Exports

Total 1.7 17.4 15.4

OECD 0.4 16.2 13.5

EU 27 0.2 15.4 12.6

United Kingdom -5.3 15.1 19.5

Euro area (EMU 16) 0.7 15.0 9.6

Germany 0.7 10.7 12.2

France 1.7 12.4 13.3

Italy -0.3 25.8 4.4

United States -0.3 12.5 20.8

OPEC 9.3 11.0 28.5

CIS and other Central and Eastern European countries b 9.7 26.6 49.5

NIC c 8.4 25.2 1.8

Rest of world 5.6 25.8 17.5

Imports

Total -0.2 14.2 9.6

OECD -2.5 7.7 6.5

EU 27 -2.4 6.9 5.9

United Kingdom -5.0 10.7 -2.2

Euro area (EMU 16) -2.9 4.5 6.7

Germany -3.7 -6.6 10.0

France -5.4 2.0 10.6

Italy -4.7 12.1 2.4

United States 2.4 10.1 12.8

OPEC 6.7 34.9 20.5

CIS and other Central and Eastern European countries b 6.1 23.1 33.2

NIC c -4.6 6.9 -3.5

Rest of world d 6.3 27.2 10.0

34


The services surplus increased in 2011 to 3.2% of GDP (against 2.6% in 2010), owing to the improvement in the surplus in travel and tourism, which grew 2.9%. Non-tourist services recorded a positive balance for the second consecutive year (0.3% of GDP).

In 2011, both revenue from services and payments for services grew. However, while the former gathered momentum (8.7% in nominal terms), the pace of pay-ments slowed down (2.5%). Revenue from tourism gai-ned some weighting in terms of contribution to GDP (attaining 4%), largely owing to the diversion of tourists to Spain on account of the geopolitical instability in the Middle East, and the suppression of hotel rates in recent years.

For its part, the income account deficit widened significantly in 2011, to 2.4% of GDP. Revenue fell (8.2%) and payments rose (3.8%). The increase re-flects, above all, higher external funding costs. By kinds of investment, the deterioration in the balance was broadbased. It is worth highlighting the increa-se in the portfolio investment income deficit (21.1%) and, in particular, the deficit in net interest payments

generated by bonds and debentures and money mar-ket instruments. The income deficit associated with other investment (loans, deposits and repos) likewise increased, and direct investment income surplus mo-derated, due to the greater fall, in absolute terms, in dividends received than in payments under this hea-ding.

The current transfers deficit fell in 2011 by 18.9%, to 0.6% of GDP, owing to a significant rise in reve-nue (7.9%). By institutional sectors, the public sector deficit was corrected and the private sector surplus widened. The negative balance linked to remittances from migrants continued its course of correction to reach -0.1% of GDP, experiencing a greater increase in revenue (5.9%) than in payments (0.8%). The difficult situation of the Spanish labour market and the logi-cal reduction in the number of migrant arrivals explain this reduction. As usual, remittance payments are notably concentrated in Latin American destinations (Table 1.11).

Geographical breakdown of remittance payments in 2010 and 2011 aTable 1.11

Source: Bank of SpainMain destination countries. Percentage of total

a The geographical breakdown is obtained based on information reported to the Bank of Spain by currency exchange establishments

In 2011, the capital account surplus fell 12.7% in 2011, to 0.5% of GDP. This decrease reflects the reduction in the transfers surplus of the Public Administrations and

the deterioration in the balance linked to the sale and purchase of non-produced non-financial assets.

2010 2011 2010 2011

Colombia 17,9 17,7 Morocco 4,1 4,0

Ecuador 12,8 12,9 China 3,5 3,5

Bolivia 8,5 8,3 Peru 3,6 3,2

Romania 5,3 5,0 Brazil 3,5 3,2

Dominican Rep. 4,0 4,8 Pakistan 1,7 1,6

Paraguay 4,5 4,1 Philippines 1,4 1,6


35

B) Spain’s foreign sector: changes in capital flows

As mentioned above, the funding requirements of Spanish agents from the rest of the world continued to fall in 2011, reaching 3% of GDP, primarily owing to the decline in investment. Given the weakness of domestic demand and the deleveraging needs of the public and private sector, this trend will foreseeably continue in 2012.

In 2011, for the first time since the start of the EMU, financial transactions between Spain and rest of the world, excluding the Bank of Spain, gave rise to net outflows from financing, in an amount of 75,307 mi-llion euros (87% of GDP). These outflows, together with the funding requirements accumulated by the Spanish economy over the course of the last year (32,278 mi-llion euros), were mainly covered by the decrease in assets held by the Bank of Spain with respect to the rest of the world in an amount of 109,153 million eu-ros. This variation indirectly reflects the high level of funds raised by credit institutions in the liquidity auc-tions of the Eurosystem.

Of the captions under the financial balance heading, foreign direct investment (FDI) is most significant to the focus and purpose of this Yearbook, which is gea-red towards business internationalization processes. According to data released by the Bank of Spain, in 2011, the economy recorded net FDI outflows in an amount of 6,428 million euros (0.6% of GDP). Accor-ding to data from the UNCTAD, Spain was a net inves-tor in FDI terms in an amount of 7,780 million dollars.

During the course of 2011, Spain’s foreign direct in-vestment abroad moderated as well as, and in particu-lar, inflows into Spain (Table 1.12). The amount of the flows remained below the levels recorded before the start of the crisis, which contrasts with the recovery observed in the FDI flows internationally.

FDI transactions in Spain reached 19,044 million euros, 38% less than in 2010. This, together with the negative impact of the drop in share prices in relation to the market value of owership interests in share ca-pital of Spanish companies, explains why the stock va-lue of FDI liabilities remained stable, at around 44.7% of GDP.

By instruments, the lion’s share of the FDI received in 2011 by the Spanish economy continued to be chan-nelled through ownership interests in share capital, as distinct from shares (70% of the total). The financing of related companies gave rise to net outflows, which would be linked to the liquidity management decisions taken by multinationals in a difficult environment for raising foreign funds.

By branches of activity, it is important to highligh the increases in FDI inflows in property and in property-related activities; professional, scientific, technical and administrative activities along with auxilary servi-ces; as well as in the manufacturing industry, financial activity and in transport and communications.

36


By geographical areas (Table 1.13), the euro area ca-rried out the lion’s share of FDI in Spain in 2011 (60%), with significant participation by the Netherlands (55%). Outside the EMU, it is worth emphasizing inves-tment from the United States, Switzerland and Latin America, which jointly accounted for 45% of the total

volume of FDI in Spain. In cumulative terms, in line with the traditional source of flows, the stock of direct investment by non-residents in Spain corresponded principally to the EMU (two thirds of the total).

Foreign Direct Investment transactions in 2010 and 2011Breakdown by sector of economic activityTable 1.12

Source: Bank of SpainMillions of euros

Spain’s Direct Investment abroad Foreign Direct Investment in Spain

2010 2011% of total FDI 2011

2010 2011% of total FDI

2011

Total 28,949 25,472 . 30,776 19,044 .

Agriculture, farming, forestry and fishing . 145 0.57 -80 . .

Mining industries 891 2,092 8.21 -384 1,276 6.70

Manufacturing industry 11,140 -5,719 -22.45 14,106 2,275 11.95

Production and distribution of electric power, gas, steam and air-conditioning, water, sewerage, waste management and decontamination

-2,734 2,771 10.88 2,887 328 1.72

Construction . 105 0.41 3,020 603 3.17

Retail and wholesale trade, motor vehicle andmotorcycle repairs

369 1,903 7.47 -3,050 -1.482 -7.78

Transport and storage; information and communications 12,184 4,832 18.97 1,261 2,355 12.37

Hotel and catering 199 257 1.01 115 98 0.51

Financial and insurance activities 1,058 13,218 51.89 4,466 2,758 14.48

Of which: CHFS * -1.820 -1,067 -4.19 882 -967 -5.08

Property activities; professional, scientific, technical, administrative activities and auxiliary services

3,106 4,137 16.24 5,815 3,643 19.13

Other services 520 -177 -0.69 375 111 0.58

Unclassified 2,232 1,909 7.49 2,246 7,040 36.97

Buildings 825 613 2.41 3,744 4,748 24.93

Other 1,407 1,296 5.09 -1,498 2,292 12.04

* CHFS: Companies Holding Foreign Securities


37

Spain’s Direct Investment abroad Spain’s Direct Investment abroad

2010 2011 2010 2011

Total CHFS Total% of total FDI 2011

CHFS Total CHFS Total% of total FDI 2011

CHFS

World total 28,949 -1,820 25,472 . -1,067 30,776 882 19,044 . -967

European Union 27 -4,295 -3,240 6,683 26.24 -1,611 22,263 -227 3,842 20.17 -1,917

Euro area -11,070 -3,361 1,745 6.85 -1,630 19,300 -262 11,182 58.72 -1,714

Germany 635 . 1,897 7.45 396 3,588 147 2,687 14.11 -146

France 1,767 . 1,125 4.42 956 -4,199 -939 3,907 20.52 -126

Netherlands -20,950 . 1,512 5.94 . 11,528 206 10,470 54.98 375

Italy -154 . -617 -2.42 . -6,953 . 324 1.70 .

Luxembourg -4,501 -3,325 -2,695 -10.58 -2,849 9,893 229 -1,404 -7.37 -1,970

Portugal 330 . 464 1.82 . -57 . 925 4.86 .

United Kingdom 6,956 66 -362 -1.42 . 2,808 -58 -7,924 -41.61 -265

New EU members b -85 94 5,105 20.04 . 213 53 411 2.16 .

Switzerland 3,214 . 84 0.33 . 1,903 . 1,966 10.32 104

United States 2,807 171 2,135 8.38 . 1,928 503 2,901 15.23 523

Latin America 21,510 624 8,727 34.26 122 3,705 556 3,848 20.21 143

Argentina 343 54 -305 -1.20 148 61 . 62 0.33 .

Brazil 15,702 149 5,604 22.00 . 1,224 322 1,413 7.42 107

Chile 344 . -66 -0.26 -173 . . 61 0.32 .

Mexico 2,495 58 1,556 6.11 . 1,447 . -169 -0.89 .

Morocco -568 . 99 0.39 . . . . .

Japan . . . . 65 . 87 0.46 .

Australia 540 . 269 1.06 . . - . -

OECD 7,144 -2,944 16,738 65.71 -1,452 27,847 356 8,897 46.72 -1,123

a . Amount less than 50 million euros in absolute valueb Czech Republic, Hungry, Lithuania, Latvia, Poland, Bulgaria and Romania

Foreign Direct Investment transactions in 2010 and 2011 a Breakdown by geographical area Table 1.13

Source: Bank of SpainMillions of euros

Transactions concerned with foreign direct inves-tment by Spain fell slightly with respect to 2010 to 25,472 million euros. The drop in share prices and the negative impact on the value of ownership inter-ests held by Spanish residents in foreign companies prompted the fall in the stock of Spanish FDI in 2011, to 46.2% of GDP (0.5 pp less than at the end of 2010).

By instruments, FDI transactions essentially took the form of shares and, to a lesser extent, other forms of ownership of share capital. The volume of financing

between related companies remained moderate, with levels similar to those of the previous year.

In relation to this type of investment, 44% of Spain’s foreign direct investment abroad concerned the fi-nancial activities and insurance branch. Significant acquisitions were also made in the areas of transport, storage and communications. The manufacturing in-dustry, which accounted for a considerable proportion of Spain’s foreign investment in the period of econo-mic expansion, recorded divestment in 2011.

38


Geographically, Latin America continued to be the main destination for Spain’s FDI abroad (excluding transactions by companies holding foreign securities (CHFS)), accounting for a third of the total volume of transactions, followed by the new EU member sta-tes, representing 20% of the total. Investment aimed at the most developed economies experienced more moderate levels. This development barely altered the geographical composition of the stock of FDI assets, with the EMU and Latin America as the primary des-tinations, even though the relative importance of the latter declined in favour of other areas, such as the new EU countries and the United States.

C) Spain’s foreign sector: reduced debt position

In 2011, Spain’s net debt position vs. other countries, measured through the International Investment Posi-tion (IIP), increased 5%, reaching 989 billion, 92.1% of GDP (2.7 pp more than the previous year).

Net debt IIP, exluding the Bank of Spain, decreased 7.7 pp of GDP to 84.6%. From the standpoint of con-tribution by institutional sectors (Table 1.14), the fall observed in 2011 was the result of the decline in the debt balance of the Public Administrations (of 1.9 pp of GDP, to 23.2%) and, above all, of the MFIs (of 7.4 pp of GDP, to 36.5%), which offset the increase in the debt position of the Other Resident Sectors (of 1.7 pp of GDP, to 25%).

As far as the Bank of Spain is concerned, net assets fell, for the fifth consecutive year, giving rise to a net debt position vs. other countries of 7.5% of GDP. Net assets vis-à-vis the Eurosystem decreased 124,056 million euros, while the other net assets of the Bank of Spain rose by 4,893 million euros and reserves increa-sed in an amount of 10,010 million euros.

In relation to investment instruments, all types of ins-trument experienced net outflows of funds, with the exception of financial derivatives. Outflows were par-ticularly high in the case of portfolio and other inves-tment (essentially, loans, deposits and repos), while, for foreign direct investment (FDI), net outflows of funds were moderate. Consequently, the debt balan-ce on portfolio and other investment fell, and the po-sitive balance on financial derivatives increased. This performance largely offset the decrease in the credit position on direct investment.

As percentages of total investment (Table 1.15), port-folio investment lost its relative weighting, both in terms of assets and liabilities, in favour of financial deriviatives. For their part, the share of other inves-tment in foreign assets and the weighting of direct investment in liabilities increased.

International investment positionBreakdown by sectorTable 1.14

Source: Bank of Spain% of GDP

Monetary Authority IFM AAPP OSR

Net Assets Liabilities Net Assets Liabilities Net Assets Liabilities Net Assets Liabilities

2006-2008 average 7.2 8.5 1.2 -39.1 44.3 83.4 -17.4 3.3 20.7 -25.3 70.0 95.3

2009 4.2 8.2 4.0 -44.8 47.8 92.6 -25.8 2.8 28.6 -27.4 69.2 96.6

2010 2.9 7.8 4.9 -43.9 44.8 88.7 -25.1 2.7 27.7 -23.3 73.4 96.7

2011 -7.5 8.8 16.3 -36.5 49.1 85.6 -23.2 3.1 26.3 -25.0 68.2 93.2


39

Foreign Direct Investment Portfolio Investment Other investment Financial Derivatives

Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities

2006-2008 average 31.3 18.8 34.0 48.3 29.7 29.4 5.0 3.5

2009 34.6 19.2 29.8 46.8 29.4 30.5 6.2 3.4

2010 38.6 20.9 24.6 42.9 29.3 32.1 7.5 4.1

2011 38.4 21.8 19.9 39.7 30.9 32.4 10.8 6.1

a Excluding Bank of Spain

International investment positionBreakdown by instruments a Table 1.15

Source: Bank of Spain% of GDP

D) Other indicators relating to the international presen-ce of Spanish companies

Aside from what is reflected by macroeconomic ratios and balance of payments data, Spanish companies’ international activity is evidenced by a variety of other areas of internationalization and their corresponding indicators. A good example of this is the internatio-nal strength of Spain’s leading companies, listed on the IBEX 35. In 2011, the contribution of international revenue to the total sales figure of the major listed companies exceeded 60% of their turnover for the first time. This figure has increased five points with respect to the companies making up the IBEX 35 in 2010 and is triple the figure recorded 14 years earlier.

Other examples are the lists compiled by specialized international magazines, like Forbes and Fortune. The-re are 8 Spanish companies in the Fortune Global 500 index. There are 28 in the Forbes 2000 index, which refers to the top 2,000 companies.

The effects of the crisis continue to undermine the po-sition of major Spanish companies in the list compiled yearly by Fortune magazine. Whereas in 2010 there were nine Spanish companies among the top 500 in the world, by revenue, in 2011, only eight made that list. CEPSA fell out of the index. The Fortune Global 500 features the following Spanish companies, listed by size: Santander (ranked 44th, down 7), Telefónica (82nd, down 4), Repsol (90th, down 4), BBVA (186th, down 10), Iberdrola (230th, up 17), ACS (240, up 211), Gas Natural Fenosa (376th, down 3), and Map-fre (378th, up 17). By countries, Spain is ranked 13th, behind the USA (132nd), China (73rd), Japan (68th), France (32nd), Germany (32nd), the United King-

dom (26th), Switzerland (15th), the Republic of Korea (13th), the Netherlands (12th), Canada (11th), Italy (9th) and Australia (9th). As in previous years, none of the leading Spanish companies belonged to the manufacturing sector. Financial services, energy and infrastructure are the prevailing sectors.

28 Spanish companies are listed in the 2011 edition of the US magazine Forbes Global 2000 index, based on sales, profits, assets and market value, the top com-panies being Banco Santander (ranked 23rd), Telefó-nica (57th) and BBVA (83rd). In the previous year’s list, there were 27 Spanish companies.

Spanish companies also feature in top positions in sector and regional rankings. For example, in the list complied by US magazine Hotels, which features the top 300 hotel chains in the world, there are 17 Spa-nish companies, with Sol Meliá ranked 15th. In Mi-llward Brown’s list of the most valuable global brands, there are three Spanish companies in the 100 best valued in the world: Movistar (Telefónica) ranked 41st, Santander (95th) and Zara, a member of the Inditex group (66th).


Spanish companies from an international perspective

It is no secret that 2011 has represented a continuation of negative trends in the corporate environment. Although the big names have managed to stay partially protected from the lethargy of the domestic market thanks to their sizeable investments in emerging econo-mies, and many mid-caps have redoubled their efforts to export, the share performance of listed companies has deteriorated, albeit at a slower rate than in 2010. All sectors of acti-vity have been affected. The only positive performance recorded has been relative to other companies in the euro area regarding shareholder returns, which although not brilliant have managed to beat those of our closest competitors. Therefore, 2011 has continued the trend of decline from 2010. For example, total returns in the Ibex-35 fell by 7.7% in 2011 (in addition to the 12.9% fall of 2010), compared with a 38.3% increase in 2009. The Spanish selective index closed the year with average returns below US indices but not as poor as European ones (the CAC 40 fell by over 13% and the DAX by over 14%). In the end, the global stock market as a whole fell by 9.5%, almost two points more than the Spanish selective index. Without doubt, the Spanish stock market continues to be in the grip of one of the highest unemployment rates in the world and continued pressure on its sovereign debt from the markets.

As in previous years, this chapter documents and analyses from an international perspec-tive the performance of Spanish companies in terms of their shareholder returns, their recommendations by equity market analysts and their presence in the international finan-cial press. The analysis focuses not only on outright data, but also on the comparison with other markets and companies in the euro area and the global economy as a whole. The comparative outlook is highly significant in times of both boom and crisis. In particular, markets, analysts and the international financial press gauge the performance of compa-nies, and directly examine their capacity to obtain resources, grow and compete in the global market. When it comes to interpreting the results of our analysis, it is important to bear in mind a number of factors. Firstly, international investors are normally more incli-ned to finance growth of Spanish companies the heftier their financial yield, the better their equity market analysts’ recommendations and the greater their presence in the interna-tional financial press are relative to other European or worldwide companies. Secondly, a positive perception or image of Spanish companies in Europe and the world multiplies their business opportunities. Lastly, present or potential buyers of the products and ser-vices offered by Spanish companies may be influenced by an improvement in their image or the way they are perceived.

41

2


Equity markets mediate between capital investors and listed companies. Shareholders are remunera-ted through capital gains, dividends and other flows which may affect the value of their investment. As in previous editions, our analysis of shareholder returns takes into account not only outright rates of return, but also their relative size compared to similar com-panies in terms of the focus of their activity in other countries competing to obtain share capital. Accordin-gly, we will analyse the shareholder returns of Spanish companies in the European and global contexts, so as to determine whether their comparative performance has been favourable, always assuming that they are

competing with other companies in the same sector to obtain share capital.

As in 2010, the performance of shareholder returns was generally negative in 2011. Before presenting the figures in detail, it is worth noting that the comparative analysis of shareholder returns at Spanish companies was based on a very thorough indicator known as the total shareholder return rate, which factors in not only listed companies’ share prices but also other cash flows which might arise during the year between the company and its shareholders (see Box 2.1).

42

The analysis will begin with an assessment of shareholder returns in a European and glo¬bal context, followed by an examination of the recommendations of investment banks and the presence of Spanish companies in the international financial press. In 2010, shareholder returns slumped in absolute terms, although relative to the euro area the fall was not so sharp. Unlike 2010, investment banks’ recommendations in 2011 also gave cause for concern, as there was a continued decline throughout the year, which could be interpreted as anticipation by analysts of the new problems that materialized in 2012. Due to the diffi-culties of Spanish financial and non-financial companies, coverage of Spanish companies in the international financial press increased noticeably in 2011, even exceeding the record coverage seen in 2006.

2.1 Shareholders Returns in a European and Global Context

Box 2.1 The Total Shareholder Return Rate

The Total Shareholder Return Rate (TSRR) is an indicator used widely to gauge the return received by owners of companies throughout the year in exchange for con-tributing share capital. To measure shareholder remuneration we have calculated an annual rate expressed as a percentage based on the following formula:

Where:A V is the increase in the total market value of company stock between the begin-ning and end of each year, D are dividend payments,R are payments as a result of reductions in the face value of shares,AAutoC are increases in treasury stock,AC are revenues from rights issues,

TRTA = V +D+ R+ AutoC AC CBCVt 1

100


CBC are revenues from the exercise of convertible bonds,andV-j is the total market value of company stock at the end of the previous year.

To compare TSRR in the various sectors of activity, it is possible to calculate a standardized rate by deducting the sector average and dividing by the standard deviation within the sector. The source of the data used is Datastream International. International fund mana-gers and stock market analysts consult this information and examine it in detail. Although some of the companies are not classified exactly in the sector which corresponds to them (for example, Abertis appears under “transport services” and not “infrastructure”), said sector classification has consequences when it comes to making decisions. Accordingly, the data presented in Table A5 was calculated based on the information directly available in Datastream International with no corrections made by us, since to do so would have distorted the information used by fund managers and stock market analysts.

43

In 2011, only 16 of the 129 listed companies ob-tained return rates of more than 10%. In the pre-vious year, which was also poor for shareholders, the-re were 23 companies with returns of over 10% and in 2009 there were 67. Therefore, 2011 confirms the general slump in shareholder returns (see Table 2.1). The companies with the largest return rates were Zin-kia Entertainment, Grifols, Grupo Ferrovial and Acciona, offering their shareholders returns of more than 30%. 11 of the 25 companies with the largest return rates belong to the Ibex-35, compared with 7 in 2010 and 8 in 2009, reversing the decline which began in 2007.

Trends were also observed regarding the sectors of activity with the largest shareholder return rates. In 2011 the most numerous group among the top 25 companies with the largest return rates were manu-facturing companies, with 10 companies. This trend confirms the trend of 2010 and of 2008 (although not of 2009), and confirms that some export sectors have responded well to the crisis (Table 2.1).

The total shareholder returns included in the Ibex-35 fell by 7.7% on average in 2011 compared to the previous year. The ten offering the best sharehol-

der returns during 2011 were Grifols, Ferrovial, Accio-na, BME, Mapfre, Gas Natural, Repsol YPF, Bankinter, Inditex and FCC (see Tables 2.2 and A1). All of them showed signs of high volatility during these years of economic and financial crisis, given that in 2008 and 2010 shareholder returns fell sharply and saw a re-covery in 2009 and 2011. In fact, only Acciona and Inditex appear among the top ten of those offering the best shareholder returns between 1995 and 2011 (Ta-bles 2.3 and A2). Inditex is also the only company that has managed to post shareholder returns in excess of 10% annually during the years of the crisis (2007-2011), during which time the Ibex-35 lost 4.8% annually. Other companies that obtained positive returns are Grifols, Red Eléctrica, Repsol YPF, Técnicas Reunidas and Telefónica. Other companies included in the Spanish selective index have produ-ced negative shareholder returns since 2007 (Tables 2.4 and A3). The results of these companies are even more striking given that the Ibex-35 performed worse in 2011 than the major market indices, apart from the French CAC 40.

44


Top 25 Spanish companies by total shareholder return rate in 2011aTable 2.1

COMPANY SECTOR RANKED %

Zinkia Entertainment Entertainment 1 62.2

Grifols* Biotechnology 2 36.2

Grupo Ferrovial* Construction 3 31.3

Acciona* Construction 4 30.7

Unipapel Household poducts 5 29.2

Bolsas y Mercados Españoles* Financial services 6 25.7

Mapfre* Insurance 7 24.3

Sotogrande Real-estate 8 23.8

Gas Natural* Gas 9 22.8

Testa Inmuebles en Renta Real-estate 10 18.7

Repsol YPF* Oil and gas 11 18.1

Bankinter* Banking 12 17.9

Cie Automotive Auto parts 13 16.9

Inditex* Fashion 14 15.3

Miquel y Costas Paper 15 12.2

Zardoya Otis Machinery 16 10

Distribuidora Internacional de Alimentación

Food trade 17 9.1

Laboratorios Farmacéuticos Rovi

Pharmaceutical 18 8.7

FCC* Construction 19 8.2

Abertis* Transport services 20 7.1

Pescanova Fishing 21 6.3

Jazztel Telecommunications 22 5.1

Urbar Ingenieros Machinery 23 4.6

CVNE Alcoholic beveranges 24 4.3

Renta 4 Financial services 25 4.1

Notes: * Belonged to the IBEX 35 a 31 December 2011. a Have been considered in the calculations a total of 129 companies traded during the year 2011 and whose details are in Datastream

Source: Datastream International through Wharton Research Data Services


45

Top 10 IBEX 35 companies by total shareholder return rate Table 2.2

Source: Datastream International Through Wharton Research Data ServicesCompanies and rates ranked by 2011 figures

Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1995

2011 b

Average

2007

2011 b

Average

Grifols - - - - - - - - - - - - 53 -19.6 1.7 -15.4 36.2 7.6 7.6

Grupo

Ferrovial- - - - - -3.8 46.8 24.4 17.8 43.8 51 27.9 -34.1 -58 78.1 -4.1 31.3 11.2 -9.1

Acciona -26.2 52.1 152.1 182.1 -19.2 -29.7 6.4 -3 26 38.1 48 52 55.8 -58.2 6.2 -40.3 30.7 14.4 -11.6

BME - - - - - - - - - - - - 52.8 -58.1 37.4 -14 25.7

Mapfre 27.4 18.8 3.9 -3.3 -27.9 27.9 -1.7 21.1 47.9 2.6 31.1 24.7 -9.7 -16.8 30.1 -24.7 24.3 8.1 -1.8

Gas

Natural68.4 60.9 5.3 96.8 -25.7 -14.3 -2.5 -2 4.6 26 6.7 30.6 36.3 -50.6 -3.4 -20 22.8 8.5 -8.6

Repsol YPF 14.6 29.1 33.5 18.8 54.7 -24.8 -1.6 -22.2 25.1 26.5 31.5 8.5 -4.9 -35.9 33.8 13.6 18.1 10.1 1.8

Bankinter 12.2 75.9 31.5 22.7 61.7 -26.4 -7.9 -26.3 41.8 23.6 22.4 29.7 7.3 -48.3 26.1 -40 17.9 7.7 -13.1

Inditex - - - - - - - 5.7 -28.1 36.9 29.3 50.7 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

FCC -27.2 31.4 93.3 82.7 -36 1.2 17.2 -6.3 39.5 24.9 39.1 65.3 -31.9 -52.5 32.8 -29.8 8.2 7 -20.1

DJIA a 36.9 28.7 24.9 18.1 27.2 -4.8 -5.4 -15 28.3 5.3 1.7 19 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

S&P 500 a 37.6 23 33.4 28.6 21 -9.1 -11.9 -22.1 28.7 10.9 4.9 15.8 5.5 -37 26.5 15.1 2.1 8.1 -0.2

FTSE 100 a 26 16.9 28.7 17.5 20.6 -8.2 -14.1 -22.2 17.9 11.2 20.8 14.4 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

IBEX 35 a 22.4 47.1 44.5 38.6 20.1 -20.5 -6.1 -26.5 32.2 21.1 22 36 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

Mercado

Mundial a16.8 13.1 13.4 21.7 32.5 -15.3 -16.2 -16.8 37.8 17.9 13.6 23.8 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

CAC 40 a 2.8 27.6 33 34.1 54.1 1 -20.3 -31.9 19.9 11.4 26.6 20.9 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1

DAX 30 a 7 28.2 47.1 17.7 39.1 -7.5 -19.8 -43.9 37.1 7.3 27.1 22 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

Notes: a Market indices were calculated based on companies listed in them each year b Calculated as a geometrical average

46


Top 10 IBEX 35 companies by total shareholder return rateTable 2.3

Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

19952011 b

Average

20072011 b

Average

ACS 5.7 12.9 312.6 53 -28 7.7 10.6 13.5 28.4 32.5 64.5 59.6 -2.6 -16 12 6.1 -31.3 19.9 -7.8

RedEléctrica

- - - - - 70 7.5 -4.5 40.1 31.4 62.7 27.1 36.1 -14.9 11.3 -5.8 -2.3 18.8 3.5

Abengoa - - 63.8 68.4 0 61.4 -17.7 -17.6 5.4 28.1 72.7 125.6 -12.7 -50.8 93.2 -18 -10 16.4 -9.4

OHL -14.3 -10.4 242.9 95.2 -38.6 -28.5 33.6 -25.3 49.8 6.4 116.8 76.5 -0.9 -56.2 107.6 22.1 -13.2 16.4 -0.9

Indra Sistemas

-54.7 14.4 445.6 121.5 40.8 8 -4.8 -31.4 58.4 25.3 35.3 15.2 3.3 -10.7 5 -19.1 -19.9 15.8 -8.9

Acciona -26.2 52.1 152.1 182.1 -19.2 -29.7 6.4 -3 26 38.1 48 52 55.8 -58.2 6.2 -40.3 30.7 14.4 -11.6

Enagas - - - - - - - - 52.6 46 32.3 13.9 16 -20 4.5 1.3 0.6 14.2 -0.3

Telefónica 11.4 84.4 46.8 54 104.3 -29 -11.1 -41 46.6 22.7 -1.2 31.2 41.7 -25.4 29.3 -7.7 -14.7 13.7 1.5

Abertis 52.1 41.3 23.1 24.1 -26.4 5.2 30.6 4.9 20.4 45.6 40.8 13.4 4.8 -38 35.8 -6.8 7.1 13.5 -2.5

Inditex - - - - - - - 5.7 -28.1 36.9 29.3 50.7 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

IBEX 35 a 22.4 47.1 44.5 38.6 20.1 -20.5 -6.1 -26.5 32.2 21.1 22 36 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

DJIA a 36.9 28.7 24.9 18.1 27.2 -4.8 -5.4 -15 28.3 5.3 1.7 19 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

S&P 500 a 37.6 23 33.4 28.6 21 -9.1 -11.9 -22.1 28.7 10.9 4.9 15.8 5.5 -37 26.5 15.1 2.1 8.1 -0.2

FTSE 100 a 26 16.9 28.7 17.5 20.6 -8.2 -14.1 -22.2 17.9 11.2 20.8 14.4 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

Mercado Mundial a 16.8 13.1 13.4 21.7 32.5 -15.3 -16.2 -16.8 37.8 17.9 13.6 23.8 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

DAX 30 a 7 28.2 47.1 17.7 39.1 -7.5 -19.8 -43.9 37.1 7.3 27.1 22 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

CAC 40 a 2.8 27.6 33 34.1 54.1 1 -20.3 -31.9 19.9 11.4 26.6 20.9 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1


Source: Datastream International through Wharton Research Data ServicesCompanies and rates ranked by 1995-2011 average


47

Company 2007 2008 2009 2010 201119952011 b

Average

20072011 b

Average

Inditex 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

Grifols 53 -19.6 1.7 -15.4 36.2 7.6 7.6

Red Eléctrica 36.1 -14.9 11.3 -5.8 -2.3 18.8 3.5

Repsol YPF -4.9 -35.9 33.8 13.6 18.1 10.1 1.8

Técnicas Reunidas

52.3 -57.2 127.8 21.9 -39.9 1.7 1.7

Telefónica 41.7 -25.4 29.3 -7.7 -14.7 13.7 1.5

Enagas 16 -20 4.5 1.3 0.6 14.2 -0.3

OHL -0.9 -56.2 107.6 22.1 -13.2 16.4 -0.9

BME 52.8 -58.1 37.4 -14 25.7 - -

Ebro Foods -33.4 -19.8 59.6 13.2 -5 8.1 -1.7

DJIA a 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

FTSE 100 a 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

S&P 500 a 5.5 -37 26.5 15.1 2.1 8.1 -0.2

Mercado Mundial a 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

DAX 30 a 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

IBEX 35 a 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

CAC 40 a 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1


Top 10 IBEX 35 companies by total shareholder return rate Table 2.4 Source: Datastream International through Wharton Research Data ServicesCompanies and rates ranked by 1995-2011 average

While the general rankings offer interesting results for all branches of the economy, from an analytic stan-dpoint it is worth looking at the shareholder returns on a sector-by-sector basis. This is because inves-tors are inclined to diversify their portfolios and they frequently do so through various sectors. Table 2.5 shows the top 10 listed companies throughout 2011 by total shareholder return rate compared with com-

panies from the same sector within the euro area (the comprehensive list is shown in Table A4). The figures are also compared with companies operating in the same sector elsewhere in the world. In both cases, a standardized rate of return is used (see Box 2.1).

48


In 2011, 64 listed Spanish companies obtained a higher shareholder return rate than the average of euro area companies within their respective sectors, a noticeable increase compared to 2010, when there were only 17. Therefore, in 2011 one out of every two listed companies (50%) offered returns higher than their peers in the euro area, while this was 39% in 2008, 28% in 2009 and 14% in 2010. In short, returns were obtained during 2011 that almost rea-ched the level of years before the crisis. For example, the proportion amounted to 54% in 2006. Clearly, as the absolute returns are still low, the relative improve-ment compared to the euro area is only a small conso-lation, but it is significant and worth mentioning (see Table A4). While in 2010, only 5 listed Spanish companies obtained a return rate one standard deviation higher than the average of their euro area peers in the same sector, in 2011 the figure stood at 26, also higher than the other years of the crisis (Tables 2.5 and A4).

Similar results are obtained if the comparison of the shareholder return rates is made with other com-panies from the same sector in the global economy

as a whole instead of from the euro area. The linear correlation between the two rankings is 90.3%. The standardized rate, taking into account the companies from the same sector, not only in the euro area but in the world offers fairly similar results. However, there are important differences. For example, Grifols, Gas Natural, Pescanova, Miquel y Costas, Distribuidora In-ternacional de Alimentación, Funespaña, Jazztel and Bankinter obtained a return rate relative to the euro area that was one standard deviation higher than their rate relative to the global total. No listed company was ranked at the other extreme, that is, with a rate re-lative to the global total that was significantly higher than its rate relative to the euro area (Table A4). Again we can see that Spanish listed companies offered higher rates of return to their shareholders com-pared to their peers in the euro area than com-pared to their peers in the global economy as a whole, which again suggests that shareholder returns in the euro area were lower than in global stock mar-kets as a whole.

Top Spanish companies by total shareholder return rate in 2010,relative to companies in the same sector in Euro area

Table 2.5

Source: Datastream International through Wharton Research Data Services

Company SectorOutright Standardized rate Standardized rate

Position % Position euro area Position World

Zinkia Entertainment Entertainment 1 62.2 1 2.83 1 2.4

Grupo Ferrovial Construction 3 31.3 2 2.03 3 1.5

Acciona Construction 4 30.7 3 2.01 4 1.48

Bolsas y Mercados Españoles

Financial services 6 25.7 4 1.9 2 1.94

Bankinter Banking 12 17.9 5 1.85 12 0.83

Miquel y Costas Paper 15 12.2 6 1.81 15 0.7

Grifols Biotechnology 2 36.2 7 1.74 44 0.04

Gas Natural Gas 9 22.8 8 1.72 36 0.22

Mapfre Insurance 7 24.3 9 1.69 5 1.4

Pescanova Fishing 21 6.3 10 1.67 34 0.25


49

In 2011, there were only two sectors in which a significant number of listed companies achieved higher return rates than their euro area peers. These were banking and construction groups. In the banking sector, Bankinter, Sabadell, CaixaBank, Popular, Bankia and BBVA offered their shareholders better returns than those of their peers in the euro area. However, only the first three achieved absolute positive returns. In construction there are diversified groups like Ferrovial, Acciona and FCC that achieved better absolute and relative returns than their coun-terparts in the euro area (Table A5). It should be re-membered that in 2010 the two sectors with the best

performance in relative terms were in infrastructure and construction. However, no sector of activity was observed in which Spanish companies offer sharehol-der returns that are higher than those of their peers in the global economy as a whole.

In short, in 2011 there was a repetition of the trend of the crisis years, with very low or negative share-holder returns, although there was an increase in the number of listed Spanish companies with share-holder returns higher than the average of their counterparts in the euro area, approaching the peak recorded in 2006.

While in 2010 the recommendations issued by in-vestment banks on listed Spanish companies were a slight improvement on 2009, these have slightly deteriorated in 2011. Since this is an indicator that looks to the future - analysts’ recom¬mendations seek to anticipate market performance - the prospects of returns in the Spanish equity market at the end of 2011 were already indicating a deterioration in 2012, regardless of the worsening of the sovereign debt cri-sis. This section looks at recommendations to buy or

sell shares in listed companies issued by equity market analysts. These recommendations can and do have a significant effect on the company’s future prospects, since they create a climate of opinion about whether or not it is advisable to include - or keep including - a particular listed company in mutual fund portfolios (see Box 2.2).

Investment bank analysts and Spanish companies 2.2

Stock market analysts` recommendations Box 2.2

The source of the data used to evaluate stock market analysts’ recommendations is I/B/E/S (Institutional Brokers Estimates System), which includes the recommen-dations of investment bank analysts (especially from abroad, although also some from Spain). The data presented here reflects the total of those recommendations. For each year, the first and last recommendations from each investment bank were taken into account. Although each investment bank uses its own classification sys-tem, the uniform categories used in the I/B/E/S database are “strong buy,” “buy,” “hold,” “underperform,” and “sell.” Furthermore, the average recommendation was calculated using a scale from 1 (“strong buy”) to 5 (“sell”), which also features in I/B/E/S

It is important to note that from April 2003 a new regulatory framework in the Uni-ted States aimed at preventing conflicts of interest and financial scandals obliged stock market analysts to provide more information regarding their recommenda-tions and other aspects of their activity. The effect has been to reduce the number of positive recommendations with respect to negative ones. Accordingly, the data after the new regulatory framework entered into force are not strictly comparable to the figures prior to that date.

50


Table 2.6 Vertical percentages

1998 1999 2000 2001 2002 2003 2004

F L F L F L F L F L F L F L

“Strong buy” 22.4 18.2 23.7 27 22.6 23.4 18.9 20.4 16.3 17.1 14.9 17.8 15.3 16.7

“Buy” 27.6 29.5 32.1 33 39.7 38.3 34.5 32.6 34.4 29.9 30.8 23.5 27.4 24.1

“Hold” 34.1 36.9 31.4 28.8 28.6 29.2 33 34.2 34.4 36.1 34.5 39.3 32.8 34.6

“Underperform” 10.8 9.7 9.5 8.8 7.7 7.4 12.2 11.3 11.9 13.9 13.7 14.1 17.8 19

“Sell” 5.1 5.7 3.3 2.4 1.4 1.7 1.5 1.5 3 3 6 5.3 6.7 5.6

Total IBEX 35 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Number 352 352 452 452 416 418 476 476 596 596 562 562 646 647

F FirstL Last

Analysts’ recommendations follow discernible pat-terns by sector and listed company, since the crisis has had different effects. During 2010, there was an increase in the number of recommendations is-sued on Ibex-35 companies (to 683) compared to 2010, which is usually interpreted as being positive. Table 2.6 shows the figures for the 1998-2011 period, considering the first and last recommen-dation issued each year for each listed company.

As in previous years, companies with the largest mar-ket capitalization are those that receive the largest number of recommendations. Repsol YPF heads the list with 43, followed by Telefónica with 42, BBVA with 41, Banco Santander with 40, Iberdrola with 33, and Inditex and Mediaset with 32 each (see Table A6). In the period elapsed between the last recommenda-tions issued by investment banks on Ibex-35 secu-rities in 2010 and the first issued in 2011 there was a notable deterioration, especially in the number of

“underperforms” (from 11.8% to 15.2% of the total) and “sells” (from 6.7% to 7.6%), although the number of “strong buys” rose slightly (from 17.6% to 18.3%, see Table 2.6). However, between the first and last recom-mendations of 2011, the tone of negative recommen-dations was more modest, as the number of “under-performs” increased and the number of “sells” fell. In general, the changes seen in 2011 were not as striking as in previous years, although the year ended with a slightly worse balance of recommendations on Ibex-35 securities than at the end of 2010.

The medium term trend of analysts’ recommenda-tions shows several ups and downs. This is because investment banks react to both the macroeconomic, financial and competitive situation and to the speci-fic trends of each sector and company, making their recommendations vary substantially. After some ups and downs between 1997 and 2001, 2002 saw a de-terioration in recommendations due to the crisis in Argentina and its repercussions elsewhere in Latin


51

2005 2006 2007 2008 2009 2010 2011

F L F L F L F L F L F L F L

“Strong buy” 14.1 16.3 17.7 17.3 16.6 18.6 17.5 22.1 15.8 21.1 18.7 17.6 18.3 19

“Buy” 26.2 21.5 26.4 18.7 23.9 26.3 28.5 22.7 23.2 21.3 28.5 29.9 27.4 24.5

“Hold” 32.3 32 33.2 35 33.6 32.8 26.8 25.6 31.2 29 33.3 34 31.5 32.4

“Underperform” 18.2 23.3 15.2 20.3 19.3 17.1 20 22.6 19.6 20.8 12.5 11.8 15.2 17.6

“Sell” 9.2 6.9 7.5 8.7 6.7 5.3 7.1 7.1 10.1 7.8 7 6.7 7.6 6.6

Total IBEX 35 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Number 595 596 572 572 586 586 634 634 525 525 568 568 683 683

Note: Data prior to April 2003 are not comparable to data subsequent to that date because of the regulatory change in the United States aimed at pre-venting conflicts of interest between investment banks and financial intermediaries. The figures were calculated based on companies listed in the IBEX 35 in each year

Stock market analysts` recommendations on IBEX 35 companies, 1998-2011 Source: I/B/E/S (Institutional Brokers Estimates System) throught Wharton Research Data Services

America, a region in which more than half of Ibex-35 companies held major investments. From 2003 on-wards, recommendations improved slightly, but did not reach the levels of the late 1990s, perhaps due to regulatory changes in the activities of stock market analysts in the wake of financial scandals in the US (see Box 2.2).

Investment bank analysts’ recommendations tend to be interpreted in line with the sector of activity ins-tead of general terms for listed companies as a whole. Table 2.7 shows the top-ten listed Spanish companies in terms of stock market analyst recommendations in 2011, standardized by sector in the euro area (the full list is given in Table A6). The interpretation of these data is the same as in Table 2.5, in other words, a potential investor will want to compare the recom-mendations obtained by Spanish companies with tho-se obtained by companies in the same sector in the same monetary region. Table 2.7 also shows the stan-dardized recommendations using figures from com-

panies in the sector worldwide. Since the I/B/E/S database gives a score of 1 to the best recommenda-tion (“strong buy”) and of 5 to the worst (“sell”), the companies with the best recommendations are those with the lowest standardized score and, of course, ne-gative, since it will always be lower than the average.

The ten companies with the best average standardi-zed recommendation by sector in the euro area during 2011 were Lets Gowex (repeating its number one po-sition obtained in 2010), Grupo San José, Grupo Nos-trum, Secuoya, Zinkia Entertainment, Grupo Tavex, Unipapel, AB Biotics, Medcom Tech and C.A.F. Five of them made the list in 2010: Lets Gowex, Grupo San José, Zinkia, Medcom Tech and C.A.F. Several of the-se companies have a strong international bias and presence, or a high technological content in the goods and services that they produce, aspects which investment banks appear to wel-come, especially against a backdrop of crisis. However, it is worth taking into account that, except

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for C.A.F., the outright number of recommendations is less than 5. Table A6 shows that the most extreme values in the average recommendation - whether at the beginning of the classification or at the end - tend to be associated with smaller companies and with a relatively small number of recommendations.

It is important to note that the comparison with com-panies in the same sector in the rest of the world does not affect results, since the correlation between the

last two columns of Table A6 is 99.5%. Most listed companies, 101 to be exact, obtained better re-commendations in comparison with their euro area peers than with their peers in the world ove-rall. In 2011, only 7 listed companies obtained a better score in comparison with their peers in the world than in the euro area (Lets Gowex, Grupo Nostrum, Secuo-ya, Zinkia Entertainment, AB Biotics, Medcom Tech and Amadeus). In 2010, 74 listed companies obtained a better score in the euro area, which indicates that

Top 10 Spanish companies by average recommendation from stock marketanalysts in 2011, compared to companies in the same sector within the Euro areaTable 2.7

Source: I/B/E/S (Institutional Brokers Estimates System)through Wharton Research Data Services

Average recommendation 1=best; 5=worst

Number of recommendations Average recommendation

Company OutrightEstandardized

Euro areaEstandardized

WorldOutright

Estandardized Euro area

Estandardized World

Lets Gowex 1 -1.01 -0.9 1 -1.71 -1.73

Grupo San José 2 -0.75 -0.65 1 -1.57 -1.48

Grupo Nostrum 1 -0.77 -0.86 1 -1.39 -1.63

Secuoya 1 -0.77 -0.86 1 -1.39 -1.63

Zinkia Entertainment 1 -0.77 -0.86 1 -1.39 -1.63

Grupo Tavex 3 -0.56 -0.52 1.33 -1.35 -1.14

Unipapel 4 -0.47 -0.28 1.25 -1.22 -1.09

AB Biotics 1 -0.68 -0.81 1 -1.21 -1.49

Medcom Tech 1 -0.68 -0.81 1 -1.21 -1.49

CAF 11 0.25 0.62 1.45 -1.03 -0.88

Note: The average recommendation was calculated giving the following values: “strong buy” = 1, “buy” = 2, “hold” = 3, “underperform” = 4, and “sell” = 5


53

there are increasingly fewer Spanish companies in the opinion of analysts that stand out compared to those in the same sector in the rest of the world.

There has been a slight decrease in the number of listed companies whose score from stock market analysts is above the euro area average, from 43% in 2010 (47 of 109 companies covered by at least one analyst) to 41% in 2011 (44 of 108

companies), a trend that confirms the decrease sin-ce the beginning of the crisis, since in 2008 the figure was 45%. Only 33% of listed Spanish companies obtained a better score than the average of com-panies in their sector worldwide, below the 39% of 2010 and the 42% of 2008. Therefore, 2011 ended with a deterioration in average recommendations ad-justed by sector compared to 2010.

Visibility of Spanish Companies in the international financial press 2.3

The international financial press continues to increase its coverage of Spanish companies. In 2011, the outright coverage record of 2006, one year before the crisis, was beaten. The four publications included in this analysis - The Financial Times, The Wall Street Journal, The Wall Street Journal Europe and The Economist – continue to underline the international presence of major Spanish companies, although during the last year many of the mentions, especially regarding financial institutions, focussed on the effects of the crisis and their solvency. In 2011, the vast majority of news items about Spanish compa-nies were tainted by the crisis, although a significant proportion reported their successes in certain emer-ging markets.

The quantity and quality of media coverage are pivotal variables since investors, analysts, directors and po-liticians from all over the world use the international financial press to obtain information and projections regarding the performance of the economy and the companies. The financial, economic and political de-cision-makers read these sources and make decisions based on information published therein. Companies can be helped or hampered by the image and currents of opinion formed about them in the international fi-nancial press. Box 2.3 describes the methodology used to gauge the presence of Spanish companies in the four leading printed media.

Methodology for compling references to Spanish companiesin the international financial press Box 2.3

Mentions of Spanish companies in the international financial press were calculated based on a three- step methodology. Firstly, a list was compiled of the almost 200 companies which in principle might appear at least once in the Financial Times, The Wall Street Journal, The Wall Street Journal Europe and The Economist between 1995 and 2011. Secondly, systematic searches were performed in those four publi-cations for articles mentioning any of the companies, using the Factiva database (Dow Jones). Lastly, data was systematically trawled to verify their accuracy.

If a company was mentioned more than once in the same article, it was counted as a single mention.

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The coverage of Spanish companies in the internatio-nal financial press has increased considerably since the 1990s, although there have been notable ups and downs. Chart 2.1 shows the number of times Spanish companies were mentioned since 1995. The two his-toric peaks of 2000 and 2006, both due major foreign investment transactions made by several companies, were exceeded in 2011.

2011 also exceeded all other years in relative terms, that is, the number of articles that mentioned Spa-nish companies relative to the total of article publis-hed in the four media. It is important to highlight that Spanish companies still attract more attention than might be expected in view of the economy’s size in a global context. To put these figures into perspective, Spain’s GDP accounts for just under 2% of the global economy, but Spanish companies were mentioned in almost 3.8% of international financial press articles, which means that in 2011 Spanish companies recei-ved coverage almost 50% higher than the Spanish economy’s weighting in the world.

It should come as no surprise that the most cited companies are the biggest ones. Table 2.8 shows the list of the 25 Spanish companies most frequently mentioned between 1995 and 2011. For the second consecutive year, Banco Santander overtook Tele-fónica, having been cited in 854 articles in 2010 and 1,335 in 2011, the largest number of mentions of any Spanish company throughout the period. The growth of the international media visibility of Santander has been very rapid (see Graph 2.2). After Santander and Telefónica, at some distance, are BBVA, Endesa and Repsol. In 2011, the most frequently cited companies

apart from Santander, in decreasing order, were BBVA, Telefónica, Repsol and Inditex. It is worth noting the increasing coverage of the two largest football clubs (in eighth and twentieth place) and of the savings bank groups that raised capital from the markets, Bankia and Banca Cívica (see Table 2.9).

As usual, coverage of companies in international fi-nancial media depends on their size and international projection. The most strategic sectors of the economy - such as banking or energy - also attract more atten-tion. Lastly, the international financial press tends to reflect offensive and defensive merger and acquisition movements. In 2011 The Financial Times was the me-dium that mentioned Spanish companies the most of-ten, data that confirms the trend since the 1990s (see Graph 2.3). This medium mentioned Spanish compa-nies in 4.5% of articles published in 2011, followed by The Wall Street Journal in its American and European editions with 3.6% and The Economist with 1.2%, a fi-gure which is below the proportionate weighting of the Spanish economy in the world (see Table 2.9).

Accordingly, with respect to the previous year 2011 saw an increase in international coverage of Spanish companies, especially in the case of The Financial Ti-mes. Interest in Spanish companies remains focused on their international transactions, although in 2011, as was the case in 2010, the problem of sovereign debt also boosted coverage of banks since they play a major role in debt financing. In any event, the in-ternational financial press devotes more attention to Spanish companies than warranted by the scale of the Spanish economy.


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Number of references to Spanish companiesin articles published in the international financial press, 1995-2011 Chart 2.1

Source: Factiva

Note: The media included in the analysis are the Financial Times, Wall Street Journal, Wall Street Journal Europe and The Economist. The correlation betweenthe two series of data is 0.93

4500

4000

3500

3000

2500

2000

1500

10001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Per 100,000 articles published

Number of mentions

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Top 25 Spanish companies by referencesin the international financial press, 1995-2011Table 2.8

Source: Factiva

Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Outright

19952011

Relativea 19952011

Santanderb 136 264 414 405 378 347 191 295 186 520 349 261 532 664 616 854 1335 7747 1715

Telefónica 177 400 538 362 382 1114 413 360 262 256 343 346 361 245 245 275 290 6369 6359

BBVAc 142 288 273 242 201 389 207 291 227 195 399 202 139 147 206 386 428 4362 966

Endesa 64 148 381 175 182 207 147 112 84 92 174 482 298 78 68 34 24 2750 6057

Repsol-YPF 106 251 185 65 160 193 124 162 99 130 172 181 117 147 111 105 238 2546 1210

Iberia 94 117 131 83 90 67 125 77 65 118 81 58 92 120 75 90 176 1659 3868

Iberdrola 23 43 45 56 33 145 110 48 83 32 58 158 148 233 106 104 129 1554 3423

Ferrovial 2 4 1 6 15 11 8 7 31 40 24 380 155 222 120 76 69 1171 1550

Inditex 3 0 14 7 14 17 54 39 60 73 110 92 116 102 131 103 235 1170 3220

Gas Natural 14 45 31 19 14 54 14 37 69 34 120 237 113 59 28 26 17 931 443

Real Madrid 50 41 56 41 20 15 21 35 55 32 28 21 9 57 83 37 181 782 2605

La Caixa 29 55 70 48 47 70 9 25 32 36 39 40 45 55 21 58 81 760 168

Banesto 78 48 62 34 21 8 1 53 27 55 24 30 29 36 47 58 58 669 148

Unión Fenosa

7 21 35 34 23 94 46 63 36 16 56 55 28 59 24 6 6 609 1341

BancoPopular Español

9 30 43 30 27 41 12 45 30 31 22 10 19 44 30 73 65 561 124

Altadisd 0 0 0 0 12 39 10 24 50 30 47 40 186 39 31 7 12 527 2192

Acciona 0 0 0 8 7 9 7 2 12 10 18 72 183 52 47 24 7 458 606

Caja Madrid 2 3 14 19 25 19 12 12 21 29 26 21 59 42 30 38 73 445 99

Telefónica Móviles

0 0 6 1 3 101 81 57 45 45 34 21 3 1 2 0 0 400 399

ACS 0 0 1 1 0 1 8 12 13 7 18 56 31 63 22 72 70 375 497

SacyrVallehermoso

0 0 0 0 0 0 3 4 12 6 21 52 98 93 19 23 30 361 478

Abertis 0 0 0 0 0 0 0 0 1 17 28 144 58 44 9 28 26 355 8148

Prisa 2 16 36 9 16 24 8 22 5 6 22 8 12 28 39 35 22 310 310

Bankinter 9 12 13 8 15 24 8 7 12 4 8 13 19 14 16 41 70 293 65

BancoSabadell

1 7 1 6 0 30 7 5 20 9 21 11 14 21 24 42 43 262 58

Outright total

1109 2054 2666 1889 1865 3304 1841 2044 1801 2091 2552 3304 3239 3117 2453 2843 4325 42497 ---

RelativeTotale

1131 1405 1547 1761 1758 2956 1757 1948 1573 1867 2410 3153 3257 2899 2554 2761 3956 2232 ---

Notes: The media included in the analysis are the Financial Times, Wall Street Journal, Wall Street Journal Europe and The Economist a Per 100,000 articles published on the sector in which the company operates b Prior to the merger between Santander and Central Hispano in 1999 the references to the two companies have been included c Including references to Argentaria, BBV and BBVA d Including only references to Altadis, not including references to Tabacalera e Per 100,000 articles published in the four media analyzed


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Top 5 Spanish companies by referencesin the international financial press, 1995-2011 Chart 2.2

Source: Factiva

1600

1400

1200

1000

800

600

400

200

01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Santander

Telefónica

BBVA

Endesa

Repsol

Note: The media included in the analysis are Financial Times, Wall Street Journal, Wall Street Journal Europe and The Economist

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Comapny Total FT WSJ WSJE The Economist

Santander 1335 866 333 125 11

BBVA 428 231 142 49 6

Telefónica 290 191 65 30 4

Repsol-YPF 238 142 65 30 1

Inditex 235 82 106 44 3

Real Madrid 181 52 63 58 8

Iberia 176 98 48 25 5

Bankia 132 65 46 19 2

Iberdrola 129 78 35 15 1

La Caixa 81 52 16 10 3

Caja Madrid 73 48 15 9 1

ACS 70 38 20 11 1

Bankinter 70 41 21 6 2

Caja Ahorros del Mediterráneo 70 24 26 20 0

Ferrovial 69 46 16 7 0

Banco Popular Español 65 39 19 7 0

Banesto 58 24 22 12 0

Fútbol Club Barcelona 47 4 17 23 3

Banco Sabadell 43 19 16 8 0

Banca Cívica 68 38 18 11 1

Sacyr Vallehermoso 30 21 5 4 0

Gamesa 29 20 6 2 1

Abertis 26 17 6 3 0

Endesa 24 17 5 2 0

Prisa 22 10 8 4 0

Total Spanish companies 4,325 2,459 1,236 572 58

Total for every 100,000 articlesa 3,956 4,460 3,680 3,628 1,197

Note: a Per 100,000 articles published in the media analyzed

Top 25 Spanish companies by references in the international financialpress in 20101, by publicationTable 2.9

Source: Factiva


59

Number of references to Spanish companies in articles published in the internationalfinancial press, by publication, 1995-2011 Chart 2.3

Source: Factiva

2.500

2.000

1.500

1.000

500

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FT

WSJWSJE

Economist

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2011 was generally a continuation of the negative re-sults inherited from 2010 from the standpoint of sha-reholder returns and especially in terms of investment bank analysts’ recommendations. Although the fall in shareholder returns was less than in 2010, it was another year that closed with a generally negative re-sult. Also, there were fewer companies that obtained returns of over 10%. The only aspect that offers some consolation is that returns compared to the rest of the euro area were less negative. However, regarding the worldwide economy, Spanish companies continue with their negative performance on the stock market. Therefore, it can be concluded that it is not only listed Spanish economies that are suffering, but rather the whole euro area.

Unlike 2010, investment bank analysts’ recommen-dations have also been negative. The only glimmer of hope came from the most internationalized com-panies and those that sell products or services with some technological contents, these companies per-forming better. Perhaps these trends can be used to guide the actions of the Spanish business world regar-ding external markets and the application of knowled-ge. It is also worth noting that 41% of listed Spanish companies have seen an improvement in their recom-mendations by analysts compared to their competi-tors in the same sector in the euro area, although in the worldwide economy it was only 33%.

In 2010 there was a sharp increase in the coverage of Spanish companies by the international financial press, although not for very flattering reasons. The cri-sis and the problems of many large financial and non-financial Spanish companies has led to a large number of essentially negative articles, something that does not help with the recovery of investors’ expectations about the future of the Spanish economy and Spanish companies.

To conclude, 2011 continued the negative trends of previous years. As well as the falls in shareholder re-turns, the international investment community has growing doubts about the short-term future of Spa-nish companies. The international financial press also continues to emphasise negative aspects instead of positive ones. Perhaps we should stress the improved results of those companies focusing more on foreign markets and more involved in the application of tech-nology and knowledge. These could be the two pillars of the recovery, provided that we manage to overcome our most immediate financial challenges.

2.4 Conclusion


Special Mentions for theInternationalizationof Spanish Companies

As in previous editions of the Yearbook, the Círculo de Empresarios wishes to recognize publicly the work of those Spanish companies which, through their internationalization, have contributed to the global projection of our economy.

As a result of the opinions expressed by members of the Círculo regarding companies and their operations in 2011, four categories have been identified.

The first of these comprises major companies with a significant track record of internationa-lization during recent years. In the judgement of the members of the Círculo, the three com-panies which should be highlighted in this edition of the Yearbook are, in alphabetical order, Banco Santander, Iberdrola and OHL.

Secondly, major internationalization operations that were carried out in 2011 are highlighted. These operations were selected based on the following criteria: the opening up of new business opportunities; the opening up of new geographical areas of operation for the company; a significant increase in the company’s global market share; technological innova-tion; impact on the host country; and the volume of investment, both in absolute terms and in relation to the company’s size and the size of its sector. The two international operations chosen were the award of the Medina–Mecca railway line to a large consortium of Spanish companies, and Gestamp Automoción’s acquisition of the German ThyssenKrupp group’s chassis subsidiary.

In the third category, the aim has been to recognize the efforts of many medium-sized Spanish companies’ to internationalize themselves. The idea here is to emphasize the pivotal importance of small and medium-sized companies for the Spanish economy, while at the same time encouraging them to venture overseas in order to become more competitive. On this occasion, the Círculo would like to highlight the successful international track records of four companies: Fluidra, Maxam, Tubacex and Privalia.

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3


Banco Santander, which was founded in 1857, has a strong international presence. It is the leading financial group in Spain and Latin America, as well as being the largest bank in the euro zone. Its shares are traded on the stock exchanges of Madrid, New York, London, Lisbon, Mexico, Sao Paulo, Buenos Aires and Milan, and are listed in 63 different indexes.

The key to Banco Santander’s geographical diver-sification is the appropriate balance between ma-ture and emerging markets, along with its model of subsidiaries which are independent in terms of capital and liquidity.

Its internationalization began in 1947 with the es-tablishment of its first representative office in Ha-vana, which was followed by others in Argentina, Mexico and Venezuela, as well as an office in Lon-don. In the years that followed, Banco Santander went on to purchase Banco del Hogar Argentino, its first partner in Latin America, and also establis-hed Banco Intercontinental Español (Bankinter). Subsequently, the company continued its purcha-ses in Puerto Rico and Chile, and intensified its expansion in Latin America (Argentina, Brazil, Co-lombia, Mexico, Peru and Venezuela, Chile, Puerto Rico and Uruguay) in the 1990s and 2000s.

It was in the 1980s and 1990s that Santander strengthened its presence in Europe, with acqui-sitions in Germany and Portugal, and a strategic partnership with the Royal Bank of Scotland.

In 2003, the group established Santander Consu-mer, which today has a presence in 12 European countries and the United States. In 2004, another landmark event took place: the incorporation of Abbey, the United Kingdom’s sixth largest bank, into the group. The following year, Santander rea-ched an agreement to take a 19.8% stake in Sove-reign Bancorp, the eighteenth largest bank in the United States. In a consortium with Royal Bank of Scotland and Fortis, it carried out the purchase of ABN Amro in 2007, a transaction through which it acquired Banco Real in Brazil. In 2008, Santan-der continued its growth in the United Kingdom (Alliance & Leicester and Bradford & Bingley). Two years later it entered into the commercial banking business in the United States with the acquisi-tion of Sovereign, reached an agreement on the acquisition of the non-Scottish branches of Royal Bank of Scotland (RBS), and acquired the 25% of Santander México which had previously belonged to Bank of America. In 2011, it incorporated the Scandinavian SEB group’s commercial banking business through Santander Consumer AG, and also acquired the Polish bank Bank Zachodni WBK.

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3.1 MajorCompanieswithaSignificantTrackRecordofInternationalization

Lastly, in this edition we have added a fourth category, which recognizes investments made by foreign companies in Spain which are significant for the country’s economy. This year we would like to highlight the decisions of EADS and Ford to manufacture in their Spanish production plants.

3.1.1BANCOSANTANDER


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International expansion is one of the major keys to explaining Iberdrola’s growth in the past de-cade. It has become one of the five biggest elec-tricity companies in the world, with a presence in 40 countries and all five continents. Iberdrola’s growth and diversification have enabled it to be-come one of the leading utility companies in the world, with a significant presence in the most at-tractive markets. The main areas in which Iberdro-la carries out its international activities are Spain, the United Kingdom, the United States, Brazil and Mexico.

Since the mid-nineteenth century in the United States, and since 1901 in Spain, Iberdrola has pas-sed a number of milestones in order to become a major multinational group. From the establishment of Hidroeléctrica Ibérica in 1901, and the subse-quent establishment of Hidroeléctrica Española in 1907, to the 1991 merger which gave rise to Iberdrola as it is today, both companies shared a track record littered with achievements, recogni-tion and innovation. With the incorporation of Sco-ttishPower and Iberdrola USA (previously Energy East), and the resulting creation of a major global

group, this past record has been further enriched: thus, the roots of today’s Iberdrola go back to the Americas of the nineteenth century.

In the final years of the twentieth century, the ma-jor electricity companies began to operate as true multinationals. Iberdrola was no exception, and during this period it increased its presence in Latin America.

Since 2001, Iberdrola has experienced a profound transformation. The company has consolidated its role as a global leader in the development of clean energy, and has chosen to focus on the energy sec-tor, investing in generation and networks in Spain, Mexico and Brazil. In addition, the company took the decision to make significant investments in wind power. In 2007, it underwent a major international expansion, strengthening its presence in the United Kingdom and the United States through its incorpo-ration of ScottishPower and Energy East.

In 2011, Iberdrola entered a new phase of inter-national growth with the purchase of the Brazilian company Elektro for 2,400 million dollars.

3.1.2IBERDROLA

3.1.3OHL

The product of the 1999 merger between Obras-cón, Huarte and Laín, OHL is a major international concessions and construction group.

The two major factors in its growth have been its selective internationalization, based on prudent criteria, and its R&D, which has driven productivity.

OHL is present in 30 countries and 5 continents, and 93% of its EBITDA and 90% of its portfolio pro-ceed from overseas. In 2011 it had a consolidated work-force of 25,145, almost 73% of which were overseas.

The company is currently the eighth largest con-cession company in the world (according to PWF’s 2011 rankings). It occupies the twenty-first posi-tion among the 225 major international contrac-

tors (according to Engineering News-Record’s 2011 rankings), and is the world leader in hospital construction and the leading private investor in in-frastructure in Latin America.

In 2011 alone, its OHL Construcción division, which carries out these activities both in Spain and overseas, was awarded the contract for a number of major international construction projects.

• The CHUM Hospital in Montreal: this project has a total construction budget of 1,428 million euros, of which OHL’s share is 50%.

• An urban viaduct in Kuwait City: this project’s total budget is 645.5 million euros, of which OHL’s share is 48%.

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• The Toronto metro expansion: this project’s total budget is 304.4 million euros, of which OHL’s share is 50%.

• The Marmaray Project: the first underwater rail connection between two continents (Europe and Asia) will be built under the Bosphorus Strait in Is-tanbul (Turkey). This project’s total budget is 932.8 million euros, of which OHL’s share is 70%.

• The Mecca–Medina railway line: on October 26, the Saudi Railways Organization (SRO) announced that the contract for the second phase of the high-speed Mecca–Medina line had been awarded to the Al-Shoula consortium, of which OHL is a member

along with another 11 Spanish companies and 2 Saudi companies. With a budget of 6,736 million euros, this is the largest overseas civil engineering project that has been awarded to Spanish compa-nies. OHL will receive 585 million euros for its work on this project

• Through its Czech subsidiary OHL ŽS, the com-pany has been awarded the contract for the Ural Polar project in Russia, which consists of the cons-truction of a 390 km-long railway line and has a total budget of 80,000 million roubles (approxima-tely 1,950 million euros) including VAT. This amount makes this the biggest building project in OHL’s history.

3.2 InternationalizationOperationsin2011

3.2.1 THEMEDINA–MECCARAILWAYLINE

On October 26 2011, a consortium of Spanish companies was awarded the contract for the construction and operation of the Mecca–Medina high-speed railway line, a project which has a budget of 6,736 million euros.

This is a project of historic significance, since it is the largest ever undertaken overseas and the first to include the construction of a complete high-speed railway line outside Spain. In terms of its value, as well as the expectations it has created for other Spanish companies to obtain future con-tracts in the Persian Gulf, it is the most important tendering process to have been won by Spanish companies.

Twelve companies are taking part in this project: the public companies Adif, Renfe and Ineco, and the private companies OHL, Indra, Cobra (ACS), Consultrans, Copasa, Imathia, Dimetronic, Inaben-sa and Talgo. These companies make up 88% of

the consortium, with the remainder being consti-tuted by two local firms, Al Shoula and Al Rosan.

The contract consists of the construction of the railway line (450 kilometres of dual track that will run at 320 kilometres per hour), the installation of signalling and telecommunications systems, elec-trification, and the control and operations centre. The trains will be manufactured by Talgo (35 high-speed trains, each with the capacity to carry 450 passengers, and the possibility of supplying a fur-ther 23). Renfe, in turn, will operate the line with these trains for a period of twelve years.

Given the magnitude of this project, the Saudi go-vernment opted for a tendering process divided into a number of phases: the first of these covered the design and construction of the infrastructure and stations; the second of these included the de-sign and construction of the line, the design and installation of the electromechanical systems (the

67


electricity supply, overhead power cables, tele-communications and ticketing), the supply of ro-lling stock (trains), putting the project into service, and the operation and maintenance of the line and the rolling stock for a period of 12 years.

The high-speed rail line will connect Mecca and Medina with a journey time of less than two and a half hours. The line will have stations in Mecca, Jeddah, King Abdullah Economic City (KAEC), King Abdulaziz International Airport in Jeddah and the city of Medina.

It is projected that the high-speed railway line will transport around 70 million passengers annually, given that the project’s promoters estimate a po-tential daily demand of around 166,000 passen-gers, with volumes of between 11,000 and 13,000 passengers at peak times.

3.2.2 GESTAMPAUTOMOCIÓN

Gestamp Automoción is an international group which supplies the main vehicle manufacturers. Its industrial activity is focussed on three lines of bu-siness: metal components for bodywork, chassis and mechanics.

In 2011 the company purchased the German group ThyssenKrupp’s chassis division. After receiving the approval of the European competition autho-rities, the company had to absorb ThyssenKrupp Metal Forming and consolidate its late-2009 pur-chase of Edscha.

This operation required 300 million euros in finan-cing, with this figure representing the company’s value.

The acquisition of Thyssen will augment Gestamp’s profit and loss account, which will go from a tur-nover in the chassis business of 300 million euros to more than 800 million in 2012. This figure re-presents 14% of projected revenue, and an almost three-fold increase on the pre-acquisition total.

Metal Forming has a work-force of around 5,700 employees, achieved a turnover of 1,100 million last year, and has production plants in Germany, France, the United Kingdom, Spain, Poland, Turkey and China.

Including ThyssenKrupp Metal Forming’s opera-tions, the group now has more than 23,000 em-ployees and expects its revenue to exceed 5,000 million euros in 2012. As a result of its expansion, the group now has more than 90 production plants at its disposal in Europe, North America, South America and Asia.

Gestamp has increasing levels of international projection. In Spain it produces 25% of its compo-nents. However, the company’s exposure to this country is only 5% thanks to its high volume of ex-ports. The company is especially strong in Russia and is advancing in China, India and Brazil.

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3.3Medium-sizedCompanieswithaSignificantTrackRecordofInternationalization

3.3.1 FLUIDRA

Fluidra is a multinational group with its head-quarters in Sabadell (Barcelona) which develops applications for the sustainable use of water. The company provides solutions for the conservation, piping, treatment and enjoyment of water.

It operates in 38 countries via close to 150 local offices and has production plants located in all the major markets. Fluidra’s products are distri-buted in more than 170 countries thanks to the company’s extensive commercial network. The group has a work-force of around 3,600 people (more than 50% of which are outside Spain). In 2011 it reported a turnover of 624 million euros, with only 23% of its revenue coming from the Spa-nish market.

The group’s ethos is based on the rational use of and respect for water.

Fluidra has four business units which create, pro-duce and distribute components and accessories for the swimming pool and wellness sectors, water treatment, and the control, piping and applied dis-tribution of fluids and irrigation.

In 2011 it acquired 100% of the social capital of Aquatron Inc. and Aqua Products Inc, as well as the productive assets of the Israeli company Aqua-tron Robotic Systems Ltd. The company made a down payment in U.S. dollars equivalent to 31.9 million euros.

Aqua Products and Aquatron develop, manufac-ture and distribute electronic bottom cleaners for private and public swimming pools. Both have their headquarters in the United States. The consolida-ted annual sales figure of the group of companies purchased is 44.9 million dollars, with their main markets being the United States and Europe.

With a work-force of 300 employees, the Aqua Pro-ducts and Aquatron group is present in 40 coun-tries and has a turnover of 33 million euros. It spe-cialises in the design, manufacture and distribution of electronic bottom cleaners for swimming pool, and constitutes one of the world’s most important manufacturers of these products. Its best known brands include Aquabot Bravo and Aquabot Viva, Ultrabot and UltraMAX, among others, and it also manufactures other brands for third parties. The know-how and technology which Aqua Products and Aquatron bring provide a perfect complement to those already present in the heart of Fluidra.

For Fluidra, this operation is of strategic importan-ce as it will open the door to the high-volume U. S. market in an area in which the company was not previously present – that of the residential swimming pool. The multinational has incorpora-ted a company with cutting-edge technology and capacity to innovate into its structure, and is trans-forming itself into the world leader in electronic bottom cleaners – a key product in a high-growth market which is aimed at the more than 16 million swimming pools which exist worldwide.

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3.3.2 MAXAM

Maxam is an industrial and service group which operates on a global scale, developing, manufac-turing and marketing civil explosives and initiating systems for mining, quarrying and infrastructure; cartridges and ammunition for recreational hunting and sporting use; and products for the defence in-dustry. In addition, it provides key raw materials for nitro-chemical activity, both to meet its own inter-nal needs as well as for sale to third parties. Lastly, Maxam offers its customers a serious of security-related and environmental solutions which are the product of its own technological developments in these areas.

Since it was established by Alfred Nobel in 1872, Maxam has become a global organisation made up of five business units and more than 140 compa-nies across the five continents, with 6,000 emplo-yees worldwide, manufacturing facilities in more than 40 countries and sales in over 100 countries.

Maxam is the world’s second leading company in the civil explosives sector (Maxam Civil Explosi-ves), the global leader in the manufacture of car-tridges and ammunition for recreational hunting and sporting use (Maxam Outdoors), the largest Spanish group in the defence sector (Maxam De-fence), a powerful producer of chemical raw mate-rials (Maxam Chem) and an innovator in renewable energy using its own resources (Maxam Energy).

In the past two decades, Maxam has experienced an intense transformation. In 1992 Maxam was ca-lled Unión Española de Explosivos, and was then a partner of the recently-established ERCROS, with 100% of its turnover in Spain. At that time it began a period of adjustment and restructuring, which was then followed by a phase of internatio-nal expansion – mainly between 2000 and 2007 – which turned Maxam into an industrial group with manufacturing facilities in more than 40 countries and sales in over 100 countries, 6,000 employees

across five continents and 75% of its turnover de-riving from overseas markets. In 2011 it achieved a turnover of 1,000 million euros.

In 2011 Maxam signed a joint-venture agreement with two Chinese partners with whom it had main-tained an extensive commercial relationship over a period of more than ten years. This joint venture will engage in the manufacture and marketing of civil explosives and initiating systems for China’s mining, quarrying and infrastructure construction sectors.

The factory will be located in Shandong Province. It is expected to be operational by 2013, with an initial work-force of 300 people. The project will mean an investment of 70 million euros in the co-ming years, and has the backing of the Chinese authorities at state, regional and local level.

This arrival in China strengthens Maxam’s global presence. China is one of the world’s major mining markets and has one of the world’s most active construction and infrastructure sectors. China’s extractive industry has high levels of activity owing to the country’s highly active construction sector.

The main mining regions are located in the south of Manchuria, the Liaodong Peninsula and the southern highlands. Among the country’s mineral resources, coal in particular should be highlighted. China’s coal reserves are the largest in the world. This energy potential is further complemented by the country’s significant oil reserves (the second largest in the world), as well as its natural gas, ura-nium and plutonium reserves. In addition, China’s valuable deposits of ferrous metals such as iron, magnesium, vanadium and titanium should also be noted.

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3.3.3 TUBACEX

TUBACEX, S.A. is an industrial group founded in 1963 which engages in the manufacture and sale of non-welded stainless steel pipes, which it ex-ports to more than 60 countries worldwide. The company’s sales figures have made it the world’s second largest producer in this market.

The group’s parent company is located in Llodio (Álava), and it has subsidiaries in Spain, Austria, France and the United States, as well as offices in Italy, France, the Netherlands, Germany, Poland, the Czech Republic, Hungary, Canada, China, Bra-zil and Russia.

In 2011 the companies which make up the TUBA-CEX group had a work-force of 1,875 people (40% of which are based overseas). The oil, petrochemi-cal, chemical, energy, mechanization, motor, food, aeronautical, nuclear and capital goods industries provide the majority of the group’s customers.

In 2011 it opened a new manufacturing plant at its subsidiary Schoeller Bleckmann Edelstahlro-hr GmbH (SBER) in the Austrian town of Ternitz, which produces umbilical pipes for offshore use and in which the company has invested close to 40 million euros.

This product is intended for oil and gas exploration and extraction support activities in critical pressu-re, temperature and corrosion conditions.

The new manufacturing plant, the construction of which began in 2008, is the global benchmark for this type of facility. In addition, it has succeeded in meeting the complex product certification and authorization requirements of both customers and certification bodies.

This investment is part of the company’s strategy of developing its productive capacity in the sectors of the oil, gas and energy industries which have the highest levels of specialization and added va-lue, and where high levels of growth are expected, such as oil exploration and extraction in critical conditions (offshore and deep water), and power generation in new-generation power plants.

These umbilical pipes are used to control equip-ment located on the seabed, as well as to inject fluids or corrosion inhibitors. This product is ex-tremely long and is supplied welded in coils. Its requirements are extremely high, both in terms of product performance and quality.

Tubacex has invested 40 million euros in its new manufacturing plant, and the plant’s first order is already underway. This order is destined for a global leader in the oil and gas industry which is currently expanding its North Sea oil bed.

The new facility will have the use of four latest ge-neration Pilger rolling mills, which will provide the most up-to-date systems for finishing, control and inspection, and orbital welding, as well as a new hot tube extrusion press that will complement the already existing one and increase the group’s to-tal investment in the Austrian plant to 50 million euros.

SBER is a company with a long industrial tradition. It was established in 1840 and joined the Tubacex Group in 1999 after Tubacex had acquired 100% of its shares. This subsidiary specializes in the manu-facture of high added-value pipes with small dia-meters, which complement Tubacex’s catalogue.

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3.3.4PRIVALIA

In June 2006, with a team of only five people, Lu-cas Carné and José Manuel Villanueva founded an Internet-based private sales club dealing in top-brand fashion. In its first year the company had a turnover of 400,000 euros. Six years later, Priva-lia has a turnover of more than 300 million euros, a work-force of more than 1,000 and 11 million members. It leads in every market in which it has a presence: in Spain, Italy, Brazil and Mexico.

Three-quarters of Privalia’s income currently pro-ceeds from overseas and Brazil, which is the coun-try with the greatest potential for growth, is set to become the company’s main market in 2012, ahead of the European countries which occupy a similar position in the overall business.

One of the keys to explaining Privalia’s success is the company’s physical presence in the countries in which it operates, which allows it to be close to its suppliers and customers, as well as the im-petus of a model which enables brands to cash in and customers to buy at discount prices, whi-le at the same time “always protecting the ima-ge of the brand”. Privalia is committed to offering brands “with a certain level of prestige” and which offer quality products at affordable prices that fit the profile of the companies customers, who are mainly women aged 25 to 40 who are looking for a smart way to shop.

In 2011 Privalia purchased 100% of Dress for Less, one of Germany’s leading online retailers of fashion and accessories, from Palamon Capital Partners, a pan-European private equity fund. As a result, the company became a European-wide leader in online fashion retail, operating in Spain, Germany and Italy. This acquisition significantly expands

Privalia’s geographical reach in Europe, and also extends its business model to the discounted and full-price open sales markets.

As part of this transaction, Privalia conducted a new round of financing to the tune of 88 million euros, which was subscribed to by General Atlan-tic, Highland Capital Partners, Index Ventures and Insight Venture Partners. Dress for Less’s mana-ging partners, Mirco Schultis and Holger Hengst-ler, went on to become significant shareholders in Privalia.

Founded in 1999, Dress for Less runs a distri-bution platform in the open-sales sector, both at a discount and at full price. It has more than 500,000 active users and a total customer base of over one million people in more than 50 countries worldwide.

In order to support its international growth, Privalia planned to extend its three sales models to all the markets in which it operates: the model known as ‘flash’ – Privalia’s business base – which focuses on special offers on out-of-season items; Dress for Less’s model, which is based on a permanent ‘outlet’; and the model which is the subject of the group’s latest project – the Claire+Bruce business unit – which is based on the retail of branded fas-hion at full price.

Moreover, Privalia has defied the recession, ope-ning new businesses such as Privalia Travel, the group’s travel agency division.

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3.4 ForeignInvestmentinSpain

3.4.1FORD

Ford is set to invest 812 million euros in its Almus-safes production plant in Valencia, which has been awarded the contract to manufacture the new ge-neration Kuga SUV (230 million) and the Transit Connect commercial vehicle (582 million).

This investment is the largest in the history of the Spanish motor industry and ‘guarantees’ the futu-re of the Valencia plant.

This contract, in addition to the one awarded for the production of the Ford C-Max, brings the company’s investment programme in its Spanish production plant up until 2013 to a total of more than 1,100 million euros.

3.4.2HUTCHISONWHAMPOA

This Chinese group conducts business in a range of sectors, from operating the world’s major ports, retail distribution, property and infrastructure de-velopment, to energy, technology and information services.

In December 2011 its turnover was 388 billion Hong Kong dollars (50 million U.S. dollars).

In 2011, the company increased its holding in Ter-minal Catalunya (Tercat), which is the company that holds the concession to build and operate the con-tainer terminal at Muelle Prat in the port of Barcelo-na. Tercat’s terminal is set to become Hutchinson’s logistics platform in southern Europe.

Through its subsidiary Hutchison Port Holding, the world’s largest container operator projected an investment of 515 million euros in the port of Barcelona’s new infrastructure. In the first phase, work to the value of 200 million will be carried out, almost half of which is for construction work to be undertaken by Ferrovial and Comsa-Emte, and the remainder for the equipment, machinery and cranes required in order to render the terminal operational.

The infrastructure will occupy an area of 100 hec-tares. The terminal will enable the port to reach a capacity of five million containers in 2012, compa-red to its current capacity of almost two million.


The New Latin Argonauts:Could they help in theinternationalization of Spain?

The role of diaspora in business has been the key to the development of many countries. Ties with the Indian, Israeli or Taiwanese diaspora of Silicon Valley have been the key to developing the technology industries and services in their home countries.

Today, some of the highest densities of technology companies on the planet are situated in Mumbai, Tel Aviv and Taipei 1. In all these cases, there was an active policy of mobilising this talent, either directly or indirectly, seeking to speed up the circulation and reciprocal move-ment of people, ideas and capital.

Does Latin America have similar potential which could equally be mobilised in order to encou-rage innovation? Does Spain? And, how could a country (such as Spain) exploit a connection with these diaspora to accelerate the internationalisation of the economy and the country?

1 See Saxenian, AnnaLee. 2006. The new argonauts: regional advantage in a global economy. Cambridge, MA: Harvard University Press; and on China and India in particular: Khanna, Trun. 2008. Billions of Entrepreneurs: How China and India are Reshaping Their Futures and Yours. Cambridge, MA: Harvard Business School Press; and on the Indian diaspora in technology industries: Nanda, Ramana y Tarun Khanna. 2008. “Diasporas and domestic entrepreneurs: Evidence from the Indian software industry”, Harvard Business School Working Paper, 3. Available at http://www.hbs.edu/research/pdf/08-003.pdf

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4Javier SantisoProfessor in Economics,ESADE Business School Director,ESADEgeo Center for Global Economy andGeopolitics Founder of Start Up Spain


Let us first consider the (increasing) boom of these diaspora, especially the Latin American diaspora. There is a remarkable number of Hispanic and Latin American entrepreneurs and directors at the head of multinational companies both in United States and in Europe, either managing global corporations or creating and developing start-ups within various te-chnology sectors. These new ‘argonauts of modern times’ could be mobilised within their countries, even creating advisory structures in the highest echelons of government (in Israel, for example, there is an inno-vation committee connected directly with the Prime Minister).

In large multinational technology companies, it is not unusual to find Latin American directors. These could form a first circle of aforementioned board members and advisors. Alberto Torres is a member of the exe-cutive committee of Nokia in Finland and is also a member of the Board and Executive Vice President for all the key areas of technology solutions. The Argen-tinian, Victor Agnellini is one of the Senior Vice Pre-sidents of the Franco-American multinational Alcatel Lucent. In Madrid, his fellow countryman, Guillermo Ansaldo is a member of the executive committee of Telefónica and chairman of Telefónica Global Servi-ces. This is in addition to all those Latin Americans in the international arena holding important mana-gement positions. The most noteworthy is the Brazi-lian, Eduardo Navarro, Telefónica’s General Manager for Strategy, who joined the board of directors of the multinational in September 2012. In the Luxembourg-based multinational telecommunications company, Millicom International Cellular, the Paraguayans Mario Zanotti and Regis Romero manage operations in Latin America and Africa respectively.

We must also mention the Latin American or Hispanic managers in leading technology companies in the Uni-ted States. Particularly noteworthy is Orlando Ayala, a Colombian, who is director of emerging markets at Microsoft, a group in which the Venezuelan, Horacio Gutiérrez, is in charge of all the legal business and licensing protection, and the Mexican, Enrique Ro-dríguez, who is in charge of the television, video and music division. Likewise, the Chilean, Marcela Pérez

de Alonso forms part of the management team at the technology company HP as director of human resour-ces and is also a member of the company’s executive committee. Until 2008, the president of AMD, Intel’s biggest competitor, was the Mexican, Héctor Ruiz. At Visa, the Puerto Rican, Antonio Lucio manages the company’s global marketing and is a member of the executive committee. Many Latin Americans also ma-nage Latin American divisions, for example the Mexi-can, Jaime Valles for Cisco or the Colombian, Hernán Rincón for Microsoft.

Hispanics born or raised in the United States are also a mine of top executives. Since 2010, Symantec, a major US technology company, has been in the hands of Enrique Salem, a Hispanic engineer trained in the US and who later become President of the group. At the top of the executive chain of the telecoms giant AT & T is the Cuban-American, Ralph de la Vega, mem-ber of the executive committee of the Dallas-based multinational. Another senior executive of this com-pany is the Hispanic, Thaddeus Arroyo, who holds the position of Chief Investment Officer (CIO). At Cisco, Carlos Domínguez is a Senior Vice President in the Office’s Chairman of the Board and CEO, thus playing a key role in the multinational.

This business diaspora encompasses not only multi-national managers. We can find many Latin Americans among the creators of technology start-ups or seed capital investors in areas of innovation. In Madrid, the Argentinian, Martin Varsavsky is the founder of technology companies such as Jazztel and FON. Also in Madrid, the former president of Costa Rica, José Figueres seeks to promote innovation and start-ups on the continent via La Red Innova, connecting the-se with Europe. Meanwhile, the Mexican, José Marín founded the venture capital firm IG Expansión which seeks to promote technologies.

In Boston, one of the most active centres of US start-ups together with Palo Alto, there are several tech-nology companies, many of these created by MIT alumni such as the Puerto Rican, Javier Segura (CEO of Tap ‘n’ Tap) or the Chilean, Sandro Catanzaro (co-founder of DataXu). In Austin, there is Roy Sosa and

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4.1 The Latin American diaspora


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his brother at the helm of MPower Ventures, the tech-nology business incubator. From New York, Francisco Álvarez-Demalde, an Argentinian, who is a founding partner of Riverwood Capital, a venture capital firm based in Menlo Park, California, which specialises in technology companies. Some of its investments were in outsourcing companies such as Globant, based in Buenos Aires and with a presence across the conti-nent, or Allus, based in Colombia. In Silicon Valley, initiatives such as Traweln were also set up, bringing together entrepreneurs and investments in technolo-gy areas which collaborate with companies in Latin America. Palo Alto is home to Bling Nation, a mobile payments start-up founded by Wences Casares, who also founded Meck, a venture capital firm based in Chile, a clear example of the connection between Si-licon Valley and Latin America. California is also the home of NewScale, a technology company founded by the Chilean, Rodrigo Flores.

Some entrepreneurs, such as the Bolivian, Marcelo Claure, CEO of Brightstar, have created technology empires, in this case from Miami. An empire that has become the largest Hispanic business in the United States with a turnover in excess of 3,000m dollars. In 2010, this entrepreneur invested $1,000m in creating the first lithium investment fund (an essential mine-ral for the manufacture of technology components, found in abundance in Argentina, Chile and especia-lly Bolivia) on the New York Stock Exchange, Global X Lithium.

Miami is also home to the Internet company Weemba, founded by Constancio Larguía, who also created the Patagon website during the internet boom with Wen-ceslao Casares, which ended up being sold to Banco Santander for $550 million. This city also houses the headquarters of Neoris, a global business and IT con-sulting firm, founded and developed by Latin Ameri-cans (the current chairman is the Argentinian, Claudio Muruzábal). In this sector, we must also mention the Assa group, based in Buenos Aires and led by the Ar-gentinian, Roberto Wagmaister.

These Argonauts are not only from Europe and the US. We found an unprecedented performance in Pablo Brenner, a Uruguayan, who co-founded a company in Israel which then traded on NASDAQ. He is currently a partner in a Uruguayan venture capital company, Prospéritas Capital Partners, which specialises in technology companies, and the chairman of Taho, a wireless access provider in Brazil. There is also the Bolivian-German, Guillermo Wille, who runs one of the largest centres of innovation and development for the multinational General Electric in Bangalore (India), GE John Welch Technological Centre2.

With connections networks being woven with Palo Alto, Boston, New York or Madrid, and within the re-gion itself (with Palermo Valley in Buenos Aires, Lima Valley, Tequila Valley in Mexico City or Tech Valley in Brazil), a backbone of businesses linked to internet, new technologies, outsourcing, social networks, etc. is being created in the region. Likewise, La Red Innova seeks to link Europe and Latin America in the field of technology start-ups. Recently, some governments and national institutions in the region sought to sys-tematise these networks. At the request of various governments, the World Bank’s KD4 Project provided advice to developing relevant pilot initiatives in Chile, Mexico and Argentina. In Chile, the Fundación Chile, together with other institutions and the Chilean go-vernment, launched ChileGlobal, an initiative inspired by GlobalScots in Scotland (globalscot.com), which seeks to forge ties with the Chilean diaspora of entre-preneurs and investors in technology sectors. In Mexi-co, CONACYT (National Commission of Science and Technology) is leading the development of Mexican talent abroad (redtalentos.gob.mx).

In his work on the importance of networks and the diffusion of venture capital, Isin Guler and Mauro Gui-llén show how networks of professional contacts are central to explaining the diffusion of venture capital outside the United States and its expansion in other countries. Thus, the nineties showed that the inter-national expansion of investors in start-ups focused mainly on England and Canada, two countries with strong ties to the US, and then in Israel, where the

2 See http://ge.geglobalresearch.com/locations/bangalore-india/

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Israeli diaspora played a central role, the same as the Indian and Chinese diasporas, another two emerging countries included in the top ten destinations for the internationalisation of US venture capital firms 3.

Some of the companies currently being created in the region are Sonico, situated in Buenos Aires and co-vering much of the region, a social network with over 50 million users in 2010, co-financed by funds such as Patagonia Ventures, a company specialising in te-chnology sectors. Many more could be mentioned: in Argentina: Beepoint, Vurbia Technologies, Popego, Smowtion and InnerGames. In Chile: Bigloo, Atakama Labs and Wanako Games (sold to the French multina-tional, Vivendi). In Uruguay: Lynkos e Infocorp 4. From the social games of the Brazilian Mentez to the Argen-tinian financial services Technisys, many successful ventures are being developed. These companies are increasingly interesting to multinational groups. In 2009, the South African Naspers purchased the com-parison shopping service Buscapé for about $350 million. A few months later, France’s Vivendi bought the Brazilian telecom operator GVT for over $3,000m. The common denominator of all these companies is that their creation and growth is the result of venture capital.

These Latin American diaspora, particularly those ba-sed in Spain, could help forge links with their coun-tries of origin, particularly Brazilian companies (in the case of Eduardo Navarro and other Brazilian executi-ves in Spain), Argentinian (such as Guillermo Ansal-

do as previously mentioned, but also the Argentinian multi-entrepreneur Martin Varsavsky, founder of Jazz-tel and now of FON), Chileans (such as the CEO for Europe of the airline LATAM, based in Madrid), etc. Si-milarly, the Latin American diaspora, particularly tho-se in European multinationals, could also make good ‘ambassadors’ to mobilise and encourage the location of headquarters for Latin America of these multina-tionals. In other words, Spain should consider the strategy to mobilise such diaspora to encourage the settlement of corporate headquarters, R&D centres, etc. on the peninsula. Latin Americans based in Spain and those based in Europe could be a powerful asset in a systemic plan of action to promote this strategy. Spain, however, lacks a ‘Real Consejo Internacional’ (Royal International Council), which could be connec-ted to the royal family (the Prince for example) and with Moncloa, the seat of the Spanish government. Thus, it would have a range and an important symbo-lic category, together with an operation that could be combined with ICEX-Invest in Spain.

3 VSee Isin Guler and Mauro Guillén. 2010. “Home country network and foreign expansion: evidence from the venture capital industry”, Academy of Management Journal, 53(2): 390-410; Isin Guler and Mauro Guillén. 2010. “Institutions and the internationalization of US venture capital firms”, Academy of International Business, 41: 185-205.4 For example, in Colombia there is: ACCESO VIRTUAL (Medellín), B-SMART EU (Bogotá), COLOMBIA GAMES (Bogotá), MVM INGENIRIA DE SOFTWARE (Medellín), NET WORK TV (Bogotá), SPORTS LAB (Manizales) y VOICE 123 (Bogotá).


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In addition to the Latin American diaspora, Spain could mobilise its own diaspora, notably to foster entrepre-neurship, innovation, start-ups and venture capital.

As we mentioned in the introduction, diaspora have played a key role in the development of Israeli and Indian start-ups, two countries which clearly appear on the international radar when it comes to innovation and technology. Israel has over 4000 start-ups, all wi-dely linked to venture capital funds, particularly from the United States. The same has happened with India. Today, one in four start-ups in Silicon Valley has been created by Indians. These have been the key to the de-velopment of technology companies in their country, fomenting closer ties between Mumbai and Palo Alto.

Spain lacks this connection density: for example, the-re is no Spaniard present in Californian venture capital funds and there are only a handful of Californian start-ups, hardly any when compared with those of the Is-raeli or Indian diaspora, or even from other European countries such as England, France, Finland and Swit-zerland, all of these better organised in Silicon Valley. The culture of entrepreneurship, venture capital and start-ups is especially underdeveloped in the country. As pointed out in a recent report by McKinsey and the Fundación Entrecanales, Spain is the country with the lowest capacity for innovation given their level of income per capita: only Kuwait and Greece show wor-se outcomes for similar income levels. In 23 of the 31 indicators used by the European Commission to evaluate the innovative capacity of a country, Spain is below the European average, particularly in matters relating to entrepreneurship and technology start-ups.

Spain does not have a significant technology Argo-nauts diaspora in the United States, nor is it signifi-cant in venture capital and technology start-ups. The-re are notable exceptions such as Inaki Berenguer, a Spaniard settled in New York who founded the start-up, Pixable, which was sold in September 2012 for over $26 million to the Singapore telecommunications giant, SingTel. There is also Adeyemi Ajao, founder of Identified.com, a Californian start-up; Joaquín Ayuso,

founder of Kuapay, a start-up based in Los Angeles; Iker Marcaide, a Valencian who founded peerTransfer in Boston, another highly successful start-up. Nicira, a Californian start-up sold in 2012 for over 1,000m dollars, has a Spaniard among its founders, Martín Casado. Likewise, Javier Oliván is one of the first em-ployees of the social network Facebook and one of its top executives. However, beyond these notable exam-ples, there is little density of Spanish entrepreneurs in the US, unlike the case with Israel, India, China, and even France and Germany.

Spanish talent does exist, as shown by the recent suc-cesses of Spanish start-ups, such as BuyVip, Tuenti, Privalia, eDreams, Antevenio, Budgetplaces, Anboto, idealista, etc. All of these also point to an important ingredient: the connection with the American entre-preneurial culture. The founders of eDreams are all Stanford graduates who went on to work for several years in American technology firms. One of the crea-tors of Tuenti, Zaryn Dentzel, is a Californian who, with knowledge of the social network Facebook, came to settle in Madrid and created the largest Spanish so-cial network. The founder and CEO of Antevenio, the only Spanish start-up listed on the French Nasdaq, is Joshua Novick, an entrepreneur from New York. The founders of Privalia, José Manuel Villanueva and Lu-cas Carne, studied both in the US and then worked for Bain. Jesús Encinar arrived from Boston where he graduated from Harvard Business School and created idealista.com, another great Spanish Internet suc-cess. Others, such as Gustavo García, linked directly to US technology after the acquisition of BuyVip by Amazon for 70 million euros.

A paradigm case is that of Budgetplaces, a start-up created by John Erceg, an American who grew up in San Francisco and settled in Spain in 1994 to study for his MBA at IESE and then went on to work for HP. On leaving the multinational, he started up as an en-trepreneur, creating in 2003 what would be Budget-places, a start-up created in Barcelona and which now operates in several cities on several continents. This was one subject of attention at Stanford University

The Entrepreneur diaspora in Spain 4.2

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and the Davos Economic Forum in its report on nota-ble start-ups and entrepreneurs.

These examples show, if this were necessary, that we should (re)consider the issue of brain drain when it co-mes to Spain. Brains come and go: if there are oppor-tunities and facilities (or the brakes on entrepreneur-ship are loosened), those which have left will return. Most brain drain is that of IT specialists and computer programmers, who stay in the country trying to survi-ve in a job that is not their speciality; or they remain in the family home waiting for the storm to pass, losing knowledge and skills with each passing year as they do not put them into practise. These examples also show that the countries that fare best are those which not only retain talent they also attract it. Hence the importance of (re)considering not only how to retain Spanish talent, but also how to attract entrepreneurial talent from other countries, while achieving greater movement of national entrepreneurs.

A recent analysis by the US National Venture Capital Association shows, in this regard, the importance of foreign entrepreneurs to creating real US and multina-tional empires. In the past 15 years, 25% of companies created and supported by venture capital funds (VC) were started up by foreign entrepreneurs (in fact, the ‘father’ of the VC sector itself is Georges Doriot, an American born in France, who also founded the busi-ness school INSEAD). Today, the market capitalisation of these companies promoted by foreign entrepre-neurs is well in excess of 500,000m dollars and the number of employees stands at 200,000 in the US and 400,000 worldwide. Multinationals in the calibre of Intel, Sun Microsystems, eBay, Yahoo!, Google, etc. were founded or co-founded by foreigners: Andy Gro-ve, of Hungarian origin, was a co-founder of Intel; the Indian, Vinod Khosla co-founded Sun Microsystems together with a German; also Indian is Pradeep Sind-hu, the creator of Juniper Networks, the main compe-titor of Cisco today; Jerry Yang, co-founder of Yahoo! came to the US as a teenager; the founder of eBay, the Frenchman Pierre Omidyar, and that of Google, the Russian Sergey Brin, both arrived in the United States as children.

The list goes on... In all the most prominent sectors (semiconductors, biotechnology, Internet and soft-

ware) foreign entrepreneurs can be found in abundan-ce, especially those from India, France, England, Iran and now China. Of the companies studied in the afo-rementioned analysis, the Indian diaspora has created the most (a total of 32, 22% of the total), ahead of Is-rael (17 companies, 12% of the total), Taiwan (16 com-panies) and also ahead of Canada, France, England, Germany, Australia, China and Iran. However, the ability to attract entrepreneurial talent goes beyond companies founded by foreigners: today, many of the CEOs of US multinationals are foreigners, the deans of the business schools in Chicago or Harvard are Indian, and the president of the largest law firm in the United States, Baker & McKenzie, is Brazilian. Much of this talent comes into the country to study at MIT, Stan-ford or Harvard, these thereby being authentic mines of foreign entrepreneurs who later seek to settle in America.

Spain is not without its appeal to foreign entrepre-neurs. In fact, business schools are increasingly at-tracting talent as they are constantly situated at the top of the world’s best, particularly IESE, ESADE and the Instituto de Empresa (Business Institute). Many create start-ups in the country, such as the Swede Niklas Gustafson (founder of conZumo.com), the Norwegian Christian Nyborg (co-founder of MÁSmo-vil), the Austrian Meinrad Spenger (founder of Busuu.com), the Belgian François Derbaix (serial entrepre-neur, co-founder of Toprural), the German Michael Kleindl (another entrepreneur and investor), the Mexi-can Mauricio Prieto (co-founder of eDreams) and many more. We must also add the serial entrepre-neurs from Latin America, such as Argentina’s Martin Varsavsky. Many like him have also become ‘business angels’, investing their assets in other start-ups, such as the Frenchman Alexis Bonte.

Others, such as the American, Gary Stewart, promo-te incubators such as IE Venture Lab and now Wayra, the start-up accelerator for Telefónica. Likewise, the Slovakian, Marek Fodor, now runs Seed Rocket, an incubator based in Barcelona, where Didac Lee also resides, a Chinese-born Spaniard, CEO of Inspirit and promoter of many start-ups. Moreover, others such as the Indo-American Allan Majotra, the Frenchman Nicolas Goulet (along with the Venezuelan Alberto Gó-mez) or the German Chris Pommerening, co-founded


81

some of the most active venture capital funds in the country, Axon, Adara and Active respectively. There are others who should be added to this group, such as the Mexican José Marín, founder of IG Expansion, one of the most active investors on Internet, based in Madrid.

We should (re)think how to retain Spanish entrepre-neurial talent in our country while at the same time attract foreign entrepreneurial talent. From the US to Chile to England, Start-Up Programmes are multi-plying. Spain should encourage one which seeks to reform the bankruptcy law for national entrepreneurs, facilitate entry visas for foreign entrepreneurs and, for

everybody involved, reduce red tape and offer an at-tractive tax system. In a similar manner to the way we invented ‘Spain Is Different’ with Miró to sell sun and sand, we must now sell creativity and innovation and offer the world a country which both possesses and attracts entrepreneurial talent.

Conclusions 4.3

We have outlined a few ideas on how to mobilise dias-pora for the internationalisation of the Spanish eco-nomy. We have placed special emphasis on two pos-sible ways which could easily be put into operation:

- Mobilise the Latin American diaspora, particularly those based in Spain and Europe, to encourage the lo-cation of corporate headquarters of multinationals in Spain, R+D centres, corporate venture capital funds, etc., thus strengthening the innovation ecosystem in the country while at the same consolidating jobs with higher added value.

- Mobilise the Spanish entrepreneur diaspora in the US and the foreign entrepreneur diaspora in Spain to also encourage the entrepreneurial and venture ca-pital ecosystem. Some of the most successful start-ups in Spain have been founded (in part) by foreig-ners, such as Odigeo (with a turnover today of almost 4,000m euros), Tuenti or BuyVip.

There are others who could be added to this collecti-ve, particularly Spanish executives. I refer to the many

who are on the executive committees of foreign mul-tinationals based abroad. Multinationals such as Da-none, Nestlé, Kodak, Juniper, Intel, Société Générale, Euro RSCG, Alcatel Lucent, Schneider, Essilor, Volk-swagen, Bertelsmann, etc., all of which have Spanish frontline executives. Why not also rely on these?

In fact, these ideas have been launched at ESADE. In 2012, we created Club España 2020 to bring together the Spanish and non-Spanish ‘Argonauts’ of these diaspora. Likewise, we launched Start Up Spain, a quarterly macro event that seeks to promote ‘evan-gelization’ gatherings in the country to discuss entre-preneurs, start-ups, venture capital, always with an international dimension.

If we wish to bring about change in the country – ‘re-set’ Spain, if you will - with a new production model and a renewed international boost, we need to mobili-se all the talent both within the country and outside its borders. These diaspora can play a key role. We must not forget them.


Internationalizationof the company

Each business model, each individual company has its own growth pattern that is best suited to its individual characteristics as well as the specific conditions of the market where it ope-rates. From its inception, Inditex has forged its character through the constant growth of its commercial activity, and very importantly, through internationalization.

This approach has been built around a central concept: the view that each point of sale is a hub for our activity. Accordingly, each individual shop is regarded as the pivotal point for decision-making, because the shop is the meeting place with the customer. It provides a constant source of information for the entire organisation and is the main instrument that underpins a model characterised by flexibility and the ability to adapt rapidly and continuously to market demands.

On the basis of this approach, the Inditex Group has become a global fashion retailer, capitali-zing on opportunities for growth in the five continents. It reaches its customers through eight retail outfits. In addition, in recent months, it has become multi-channel with the launch and steady expansion of online sales.

Inditex now operates in 85 markets, with a network of more than 5,000 shops belonging to the different chains (Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe), and a professional staff of over 110,000 employees worldwide.

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5Pablo IslaChairman and CEO of INDITEX


Admittedly, from the outset, Inditex was an organisa-tion designed to grow and expand its activity, interna-tionalization lying at the core of its business strategy. Looking back over the history of the organisation, from the first steps taken by its founder, Amancio Ortega, in the 1960s, it can be seen that the road has been marked by innovation, tenacity and initiative, invaria-bly with the customer as the judge of all our actions.

From its inception, the key component and driving for-ce of Zara has been expansion. Initially, the company grew within the national market, following the opening of a dozen shops in different cities in Galicia (A Co-ruña, Vigo, Lugo, Santiago de Compostela, Ourense etc.) between 1975 and 1980. Establishments were gradually opened in more remote areas; firstly, in nor-thwest Spain and later, in the rest of the mainland. The first shops in the chain were opened in Spain’s major cities between 1981 and 1988.

Shortly afterwards, the company expanded internatio-nally. In December 1988, the first shop was opened outside our borders, specifically, in the Portuguese city of Porto. This was followed in 1989 and 1990 res-pectively by openings in New York and Paris, which represent a turning point in the expansion process. In both cases, the idea of locating Zara in a world fashion capital was to make inroads into a major international market, as well as to obtain a return in terms of image.

During the 1990s, Zara was to set up operations in more and more countries, at an ever-increasing and impressive rate. In addition, new chains joined the Group - the aim being to reach customers in specific market segments - each of them with their own plans for internationalization. In most cases, Zara was the first chain to arrive in these new countries. It gained expertise which has facilitated the subsequent arrival of the other outfits and led to accelerated internatio-nal expansion of more recently created chains.

As a result, in the last ten years, Inditex has gone from having just over 1,500 shops to 5,600 today; from operating in just 40 markets, to 85 today; from having a staff of 30,000 workers to over 110,000.

Different specific aspects of this growth may be re-garded as strategic, especially the following three key elements: the product, logistics and the human com-ponent.

In relation to the product, the first question that may be raised is how this growth has affected quality and the production process. In fact, the figures are signi-ficant: the number of references or garment designs has gone from some 600, produced in the early 1980s, to over 40,000 different designs produced today. In the past, the approximate volume was no more than one million items per year which clearly contrasts with the nearly 900 million that are currently produced.

This progression in production has led to improve-ments in quality in the same proportion, owing to a number of factors. These include, notably, better pur-chasing opportunities, which are currently available to the Group and which provide access to the best and most professional suppliers around the world. Furthermore, higher quality standards, which have im-proved year on year. And finally, the customer, who is increasingly demanding in terms of the product.

The growth in commercial activity has been accompa-nied by the need to constantly increase the logistics capacity of the Group. The aim is to ensure that our customers find the product they are looking for in our shops at the right time. Since new products are sent to the shops biweekly, a logistics structure must be in place. This system was implemented in the first Zara shop, as from its opening. At present, there are eight major platforms located in different points of Spain, employing over 5,000 people. The structure must re-main one step ahead of commercial activity: we have recently announced the project for what will be the ninth platform, likewise located in Spain.

The third element is undoubtedly the most important: the human team that is part and parcel of this unique business experience. Despite the increase in sales fi-gures, the spirit in which this project was conceived has not been lost at any time. The focus is firmly on constant adaptation and permanent flexibility to solve

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85

challenges which arise on a daily basis, which is una-voidable given the company’s rapid growth rate.

Since the outset, a permanent feature of the Group’s human resources policy has been the prominence of internal promotion within the organisation, underpin-ned by considerable investment in training. A high proportion of new vacancies, across the organisation, are filled by our workers, which has implications for motivation and professional development.

In this respect, it is also important to mention the high degree of multiculturalism in our organisation, where people from over 120 nationalities work together and collaborate and who regard diversity as a value as well as a strength.

This international dimension has provided Spain with a solid basis on which to base all growth. Consequently, the Headquarters and logistics platforms have beco-me a beacon for human teams offering high added value and for research and development of advanced pioneering technology, and not forgetting the momen-tum provided by this virtuous circle for over 5,000 suppliers that accompany the Group in Spain. This prompted us recently to announce the construction of 200,000 new square metres in different Spanish loca-tions, dedicated to design, commercial activity as well as logistics, with an investment of EUR 450 million.

On this basis, Inditex has upheld its growth philoso-phy, seeking to capitalize on opportunities for growth arising throughout the world. This is precisely one of

the Group’s most prominent hallmarks. Its global as-piration has led it to operate in the five continents, opening each shop as if it were the first, with the same enthusiasm and an identical sense of service. If there is something that characterizes Inditex’s growth, be-yond the sales figures, it is without doubt the goodwill, effort and initiative of each of the people belonging to this Group, who, from the outset, have succeeded in preserving the growth ambition.


2012 Yearbook of the Internationalization of Spanish Companies

Statistical Annex

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6


2012 Yearbook of the Internationalization of Spanish Companies

89

Total shareholder return rates in the IBEX 35 Table A.1 Source: Datastream International via Wharton Research Data ServicesCompanies and indices ordered in accordance with 2011

Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201119952011 b

Average

20072011 b

Average

Grifols - - - - - - - - - - - - 53 -19.6 1.7 -15.4 36.2 7.6 7.6

GrupoFerrovial - - - - - -3.8 46.8 24.4 17.8 43.8 51 27.9 -34.1 -58 78.1 -4.1 31.3 11.2 -9.1

Acciona -26.2 52.1 152.1 182.1 -19.2 -29.7 6.4 -3 26 38.1 48 52 55.8 -58.2 6.2 -40.3 30.7 14.4 -11.6

BME - - - - - - - - - - - - 52.8 -58.1 37.4 -14 25.7

Mapfre 27.4 18.8 3.9 -3.3 -27.9 27.9 -1.7 21.1 47.9 2.6 31.1 24.7 -9.7 -16.8 30.1 -24.7 24.3 8.1 -1.8

GasNatural

68.4 60.9 5.3 96.8 -25.7 -14.3 -2.5 -2 4.6 26 6.7 30.6 36.3 -50.6 -3.4 -20 22.8 8.5 -8.6

Repsol YPF 14.6 29.1 33.5 18.8 54.7 -24.8 -1.6 -22.2 25.1 26.5 31.5 8.5 -4.9 -35.9 33.8 13.6 18.1 10.1 1.8

Bankinter 12.2 75.9 31.5 22.7 61.7 -26.4 -7.9 -26.3 41.8 23.6 22.4 29.7 7.3 -48.3 26.1 -40 17.9 7.7 -13.1

Inditex - - - - - - - 5.7 -28.1 36.9 29.3 50.7 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

DJIA a 36.9 28.7 24.9 18.1 27.2 -4.8 -5.4 -15 28.3 5.3 1.7 19 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

FCC -27.2 31.4 93.3 82.7 -36 1.2 17.2 -6.3 39.5 24.9 39.1 65.3 -31.9 -52.5 32.8 -29.8 8.2 7 -20.1

Abertis 52.1 41.3 23.1 24.1 -26.4 5.2 30.6 4.9 20.4 45.6 40.8 13.4 4.8 -38 35.8 -6.8 7.1 13.5 -2.5

Banco deSabadell - - - - - - - -4.9 26.6 12.8 31.8 56.4 -10.3 -31.7 -15.9 -20.6 2.7 1.6 -15.9

S&P 500 a 37.6 23 33.4 28.6 21 -9.1 -11.9 -22.1 28.7 10.9 4.9 15.8 5.5 -37 26.5 15.1 2.1 8.1 -0.2

CaixaBank - - - - - - - - - - - - - -43.5 23.4 27.9 1.9 -2.4 -2.4

Enagas - - - - - - - - 52.6 46 32.3 13.9 16 -20 4.5 1.3 0.6 14.2 -0.3

FTSE 100 a 26 16.9 28.7 17.5 20.6 -8.2 -14.1 -22.2 17.9 11.2 20.8 14.4 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

RedEléctrica

- - - - - 70 7.5 -4.5 40.1 31.4 62.7 27.1 36.1 -14.9 11.3 -5.8 -2.3 18.8 3.5

Banco Popular 48.4 17.6 71.6 2.5 3 17.8 2 8.7 25.3 5.7 9.4 36.9 -12.6 -45.6 -9.7 -22.3 -4 5.9 -20.3

Ebro Foods -10.7 83.2 18.9 18.1 -22.1 -13.5 8.6 -9.4 18.8 19.9 36.3 39.3 -33.4 -19.8 59.6 13.2 -5 8.1 -1.7

BBVA 39.2 65.5 114.6 36.4 7.5 13.9 -10.6 -32.4 23.9 22.9 19.1 24.4 -5.3 -45.7 54.9 -36.6 -6.6 10.3 -13.9

IBEX 35 a 22.4 47.1 44.5 38.6 20.1 -20.5 -6.1 -26.5 32.2 21.1 22 36 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

Bankia - - - - - - - - - - - - - - - - -9 -9 -9

MercadoMundial a 16.8 13.1 13.4 21.7 32.5 -15.3 -16.2 -16.8 37.8 17.9 13.6 23.8 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

Abengoa - - 63.8 68.4 0 61.4 -17.7 -17.6 5.4 28.1 72.7 125.6 -12.7 -50.8 93.2 -18 -10 16.4 -9.4

SacyrVallehermoso

0.4 27.1 68 31.4 -42.3 -4.8 11.4 45.6 25.6 6.1 78.7 129.7 -40.1 -73.4 25.6 -40.3 -12.3 2.2 -36.3

OHL -14.3 -10.4 242.9 95.2 -38.6 -28.5 33.6 -25.3 49.8 6.4 116.8 76.5 -0.9 -56.2 107.6 22.1 -13.2 16.4 -0.9

CAC 40 a 2.8 27.6 33 34.1 54.1 1 -20.3 -31.9 19.9 11.4 26.6 20.9 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1

Iberdrola 44.2 72.6 12.2 35.7 -11.8 0 13 -5.6 21.7 23.5 27.5 47.8 28.5 -35.5 8.4 -7.7 -13.5 12.4 -6.4

Endesa 30.9 37 19.3 41.6 -11.2 -5.6 -0.4 -34.2 43 17.8 33 74.7 5.1 -18 13.4 -16 -14.5 9.3 -6.8

DAX 30 a 7 28.2 47.1 17.7 39.1 -7.5 -19.8 -43.9 37.1 7.3 27.1 22 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

Telefónica 11.4 84.4 46.8 54 104.3 -29 -11.1 -41 46.6 22.7 -1.2 31.2 41.7 -25.4 29.3 -7.7 -14.7 13.7 1.5

Amadeus IT Holding - - - - - - - - - - - - - - - - -18.7 -18.7 -18.7

Indra Sistemas -54.7 14.4 445.6 121.5 40.8 8 -4.8 -31.4 58.4 25.3 35.3 15.2 3.3 -10.7 5 -19.1 -19.9 15.8 -8.9

Banco Santander

25.9 41.4 88 14.2 34.1 3.3 -15.5 -28.2 48.6 0.3 26 30.8 8.1 -48.7 84.6 -27.7 -20.4 9.5 -10

Acerinox 0.2 57.3 22.4 -25.2 103.3 -15.9 20.5 -4 9.3 28.9 6.3 91 -25.7 -30.7 31.7 -6.9 -21.9 8.6 -13.2

ACS 5.7 12.9 312.6 53 -28 7.7 10.6 13.5 28.4 32.5 64.5 59.6 -2.6 -16 12 6.1 -31.3 19.9 -7.8

TécnicasReunidas

- - - - - - - - - - - - 52.3 -57.2 127.8 21.9 -39.9 1.7 1.7

Gamesa - - - - - - -39.8 1.4 70 21.1 22.7 70.4 54.3 -59.9 -6.4 -50.8 -43.3 -7.5 -30.5

Mediaset - - - - - - - - - - 45.1 6.1 -14.8 -53.1 48.1 -9.2 -44.3 -10.5 -21.4

Arcelor Mittal - - - - - - - - - - - - 69 -66.9 95.5 -10.3 -46.2 -12 -12

International Airlines Group

- - - - - - - - - - - - - - - - -49.8 -49.8 -49.8

Notes: a The market indices were calculated considering the companies included each year b Calculated as a geometrical average

90


Total shareholder return rates in the IBEX 35Table A.2 Source: Datastream International via Wharton Research Data ServicesCompanies and indices ordered in accordance with the 1995-2011 average

Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201119952011 b

Average

20072011 b

Average

ACS 5.7 12.9 312.6 53 -28 7.7 10.6 13.5 28.4 32.5 64.5 59.6 -2.6 -16 12 6.1 -31.3 19.9 -7.8

Red Eléctrica - - - - - 70 7.5 -4.5 40.1 31.4 62.7 27.1 36.1 -14.9 11.3 -5.8 -2.3 18.8 3.5

Abengoa - - 63.8 68.4 0 61.4 -17.7 -17.6 5.4 28.1 72.7 125.6 -12.7 -50.8 93.2 -18 -10 16.4 -9.4

OHL -14.3 -10.4 242.9 95.2 -38.6 -28.5 33.6 -25.3 49.8 6.4 116.8 76.5 -0.9 -56.2 107.6 22.1 -13.2 16.4 -0.9

IndraSistemas

-54.7 14.4 445.6 121.5 40.8 8 -4.8 -31.4 58.4 25.3 35.3 15.2 3.3 -10.7 5 -19.1 -19.9 15.8 -8.9

Acciona -26.2 52.1 152.1 182.1 -19.2 -29.7 6.4 -3 26 38.1 48 52 55.8 -58.2 6.2 -40.3 30.7 14.4 -11.6

Enagas - - - - - - - 52.6 46 32.3 13.9 16 -20 4.5 1.3 0.6 14.2 -0.3

Telefónica 11.4 84.4 46.8 54 104.3 -29 -11.1 -41 46.6 22.7 -1.2 31.2 41.7 -25.4 29.3 -7.7 -14.7 13.7 1.5

Abertis 52.1 41.3 23.1 24.1 -26.4 5.2 30.6 4.9 20.4 45.6 40.8 13.4 4.8 -38 35.8 -6.8 7.1 13.5 -2.5

Inditex - - - - - - - 5.7 -28.1 36.9 29.3 50.7 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

Iberdrola 44.2 72.6 12.2 35.7 -11.8 0 13 -5.6 21.7 23.5 27.5 47.8 28.5 -35.5 8.4 -7.7 -13.5 12.4 -6.4

GrupoFerrovial

- - - - - -3.8 46.8 24.4 17.8 43.8 51 27.9 -34.1 -58 78.1 -4.1 31.3 11.2 -9.1

BBVA 39.2 65.5 114.6 36.4 7.5 13.9 -10.6 -32.4 23.9 22.9 19.1 24.4 -5.3 -45.7 54.9 -36.6 -6.6 10.3 -13.9

Repsol YPF 14.6 29.1 33.5 18.8 54.7 -24.8 -1.6 -22.2 25.1 26.5 31.5 8.5 -4.9 -35.9 33.8 13.6 18.1 10.1 1.8

IBEX 35 a 22.4 47.1 44.5 38.6 20.1 -20.5 -6.1 -26.5 32.2 21.1 22 36 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

DJIA a 36.9 28.7 24.9 18.1 27.2 -4.8 -5.4 -15 28.3 5.3 1.7 19 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

Banco Santander

25.9 41.4 88 14.2 34.1 3.3 -15.5 -28.2 48.6 0.3 26 30.8 8.1 -48.7 84.6 -27.7 -20.4 9.5 -10

Endesa 30.9 37 19.3 41.6 -11.2 -5.6 -0.4 -34.2 43 17.8 33 74.7 5.1 -18 13.4 -16 -14.5 9.3 -6.8

Acerinox 0.2 57.3 22.4 -25.2 103.3 -15.9 20.5 -4 9.3 28.9 6.3 91 -25.7 -30.7 31.7 -6.9 -21.9 8.6 -13.2

Gas Natural 68.4 60.9 5.3 96.8 -25.7 -14.3 -2.5 -2 4.6 26 6.7 30.6 36.3 -50.6 -3.4 -20 22.8 8.5 -8.6

Mapfre 27.4 18.8 3.9 -3.3 -27.9 27.9 -1.7 21.1 47.9 2.6 31.1 24.7 -9.7 -16.8 30.1 -24.7 24.3 8.1 -1.8

Ebro Foods -10.7 83.2 18.9 18.1 -22.1 -13.5 8.6 -9.4 18.8 19.9 36.3 39.3 -33.4 -19.8 59.6 13.2 -5 8.1 -1.7

S&P 500 a 37.6 23 33.4 28.6 21 -9.1 -11.9 -22.1 28.7 10.9 4.9 15.8 5.5 -37 26.5 15.1 2.1 8.1 -0.2

Bankinter 12.2 75.9 31.5 22.7 61.7 -26.4 -7.9 -26.3 41.8 23.6 22.4 29.7 7.3 -48.3 26.1 -40 17.9 7.7 -13.1

Grifols - - - - - - - - - - - 53 -19.6 1.7 -15.4 36.2 7.6 7.6

FTSE 100 a 26 16.9 28.7 17.5 20.6 -8.2 -14.1 -22.2 17.9 11.2 20.8 14.4 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

FCC -27.2 31.4 93.3 82.7 -36 1.2 17.2 -6.3 39.5 24.9 39.1 65.3 -31.9 -52.5 32.8 -29.8 8.2 7 -20.1

MercadoMundial a 16.8 13.1 13.4 21.7 32.5 -15.3 -16.2 -16.8 37.8 17.9 13.6 23.8 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

DAX 30 a 7 28.2 47.1 17.7 39.1 -7.5 -19.8 -43.9 37.1 7.3 27.1 22 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

CAC 40 a 2.8 27.6 33 34.1 54.1 1 -20.3 -31.9 19.9 11.4 26.6 20.9 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1

Banco Popular 48.4 17.6 71.6 2.5 3 17.8 2 8.7 25.3 5.7 9.4 36.9 -12.6 -45.6 -9.7 -22.3 -4 5.9 -20.3

SacyrVallehermoso 0.4 27.1 68 31.4 -42.3 -4.8 11.4 45.6 25.6 6.1 78.7 129.7 -40.1 -73.4 25.6 -40.3 -12.3 2.2 -36.3

Técnicas Reunidas - - - - - - - - - - - - 52.3 -57.2 127.8 21.9 -39.9 1.7 1.7

Banco de Sabadell - - - - - - - -4.9 26.6 12.8 31.8 56.4 -10.3 -31.7 -15.9 -20.6 2.7 1.6 -15.9

BME - - - - - - - - - - - - 52.8 -58.1 37.4 -14 25.7 - -

CaixaBank - - - - - - - - - - - - -43.5 23.4 27.9 1.9 -2.4 -2.4

Gamesa - - - - - - -39.8 1.4 70 21.1 22.7 70.4 54.3 -59.9 -6.4 -50.8 -43.3 -7.5 -30.5

Bankia - - - - - - - - - - - - - - - - -9 -9 -9

Mediaset - - - - - - - - - 45.1 6.1 -14.8 -53.1 48.1 -9.2 -44.3 -10.5 -21.4

Arcelor Mittal 69 -66.9 95.5 -10.3 -46.2 -12 -12

Amadeus IT Holding

- - - - - - - - - - - - - - - - -18.7 -18.7 -18.7

International Airlines Group

- - - - - - - - - - - - - - - -49.8 -49.8 -49.8

Notes: a The market indices were calculated considering the companies included each year b Calculated as a geometrical average


91

Company 2007 2008 2009 2010 2011 1995-2011 b

Average 2007-2011 b

Average

Inditex 4.6 -23.3 41.9 31.5 15.3 13.4 11.6

Grifols 53 -19.6 1.7 -15.4 36.2 7.6 7.6

Red Eléctrica 36.1 -14.9 11.3 -5.8 -2.3 18.8 3.5

DJIA a 8.9 -31.9 22.7 14.1 8.4 9.5 2.4

Repsol YPF -4.9 -35.9 33.8 13.6 18.1 10.1 1.8

Técnicas Reunidas 52.3 -57.2 127.8 21.9 -39.9 1.7 1.7

FTSE 100 a 7.4 -28.3 27.3 12.6 -2.2 7.1 1.5

Telefónica 41.7 -25.4 29.3 -7.7 -14.7 13.7 1.5

S&P 500 a 5.5 -37 26.5 15.1 2.1 8.1 -0.2

Enagas 16 -20 4.5 1.3 0.6 14.2 -0.3

OHL -0.9 -56.2 107.6 22.1 -13.2 16.4 -0.9

BME 52.8 -58.1 37.4 -14 25.7 - -

Mercado Mundial a 15.1 -43.3 39.1 15 -9.5 6.8 -1.1

Ebro Foods -33.4 -19.8 59.6 13.2 -5 8.1 -1.7

Mapfre -9.7 -16.8 30.1 -24.7 24.3 8.1 -1.8

DAX 30 a 22.3 -40.4 23.8 16.1 -14.7 6.2 -2.2

CaixaBank - -43.5 23.4 27.9 1.9 -2.4 -2.4

Abertis 4.8 -38 35.8 -6.8 7.1 13.5 -2.5

IBEX 35 a 10.7 -36.5 38.3 -12.9 -7.7 9.8 -4.8

Iberdrola 28.5 -35.5 8.4 -7.7 -13.5 12.4 -6.4

Endesa 5.1 -18 13.4 -16 -14.5 9.3 -6.8

CAC 40 a 4.2 -40.3 27.6 0.6 -13.4 6.2 -7.1

ACS -2.6 -16 12 6.1 -31.3 19.9 -7.8

Gas Natural 36.3 -50.6 -3.4 -20 22.8 8.5 -8.6

Indra Sistemas 3.3 -10.7 5 -19.1 -19.9 15.8 -8.9

Bankia - - - - -9 -9 -9

Grupo Ferrovial -34.1 -58 78.1 -4.1 31.3 11.2 -9.1

Abengoa -12.7 -50.8 93.2 -18 -10 16.4 -9.4

Banco Santander 8.1 -48.7 84.6 -27.7 -20.4 9.5 -10

Acciona 55.8 -58.2 6.2 -40.3 30.7 14.4 -11.6

Arcelor Mittal 69 -66.9 95.5 -10.3 -46.2 -12 -12

Bankinter 7.3 -48.3 26.1 -40 17.9 7.7 -13.1

Acerinox -25.7 -30.7 31.7 -6.9 -21.9 8.6 -13.2

BBVA -5.3 -45.7 54.9 -36.6 -6.6 10.3 -13.9

Banco de Sabadell -10.3 -31.7 -15.9 -20.6 2.7 1.6 -15.9

Amadeus IT Holding - - - - -18.7 -18.7 -18.7

FCC -31.9 -52.5 32.8 -29.8 8.2 7 -20.1

Banco Popular -12.6 -45.6 -9.7 -22.3 -4 5.9 -20.3

Mediaset -14.8 -53.1 48.1 -9.2 -44.3 -10.5 -21.4

Gamesa 54.3 -59.9 -6.4 -50.8 -43.3 -7.5 -30.5

Sacyr Vallehermoso -40.1 -73.4 25.6 -40.3 -12.3 2.2 -36.3

International Airlines Group - - - - -49.8 -49.8 -49.8

Notes: a Market indices calculated based on companies included each year

b Calculated as a geometrical average

Total shareholder return rate in the IBEX 35 Table A.3 Source: Datastream International via Wharton Research Data ServicesCompanies and indices ordered in accordance

with the 2007-2011 average

92


Ranking of Spanish companies with the largest total shareholder return rate in 2011,relative to companies in the same sector in the euro areaTable A.4

Company SectorAbsolute rate Standardized rate Standardized rate

Position % Position euro area Position World

Zinkia Entertainment Entertainment 1 62.2 1 2.83 1 2.4

Grupo Ferrovial Construction 3 31.3 2 2.03 3 1.5

Acciona Construction 4 30.7 3 2.01 4 1.48Bolsas y Mercados Españoles Financial Services 6 25.7 4 1.9 2 1.94Bankinter Banking 12 17.9 5 1.85 12 0.83Miquel y Costas Paper 15 12.2 6 1.81 15 0.7Grifols Biotechnology 2 36.2 7 1.74 44 0.04Gas Natural Gas 9 22.8 8 1.72 36 0.22Mapfre Insurance 7 24.3 9 1.69 5 1.4Pescanova Fishing 21 6.3 10 1.67 34 0.25Inditex Clothing and fashion 14 15.3 11 1.5 20 0.57Banco de Sabadell Banking 27 2.7 12 1.35 24 0.46CaixaBank Banking 32 1.9 13 1.32 25 0.44

Distribuidora Internacional de Alimentación Food industry 17 9.1 14 1.32 32 0.27

Lingotes especiales Steel 52 -8.6 15 1.3 18 0.65

Repsol YPF Oil and gas 11 18.1 16 1.23 8 1.11FCC Construction 19 8.2 17 1.2 17 0.7Abertis Transportation services 20 7.1 18 1.16 14 0.72Jazztel Telecommunications 22 5.1 19 1.15 40 0.13Sotogrande Real-estate 8 23.8 20 1.13 23 0.48Banco Popular Español Banking 41 -4 21 1.13 30 0.3Bankia Banking 42 -4.1 22 1.12 31 0.29BBVA Banking 48 -6.6 23 1.04 35 0.23CAF Transport Material 33 0.8 24 1.02 19 0.65Cie Automotive Automobile components 13 16.9 25 1.01 7 1.14Elecnor Electricity 29 2.3 26 1 43 0.06Iberpapel Gestión Paper 47 -6 27 0.98 33 0.26

Tubos Reunidos Steel 64 -15.6 28 0.94 28 0.38

Renta 4 Financial Services 25 4.1 29 0.86 9 1Banca Cívica Banking 58 -13.2 30 0.83 42 0.07Grupo Catalana Occidente Insurance accidents 38 -2.1 31 0.81 52 -0.06Abengoa Construction 53 -10 32 0.8 10 0.94Testa Inmuebles en Renta Real-estate 10 18.7 33 0.77 6 1.23Red Eléctrica de España Electricity 40 -2.3 34 0.74 48 -0.03Funespaña Miscellaneous services 28 2.7 35 0.71 71 -0.32Fluidra Construction Material 63 -15.3 36 0.71 54 -0.09CVNE Alcoholic beverages 24 4.3 37 0.7 29 0.38Zardoya Otis Machinery 16 10 38 0.67 13 0.74Acerinox Steel 75 -21.9 39 0.62 39 0.14Banco Santander Banking 72 -20.4 40 0.59 55 -0.1Viscofán Feeding 26 3.8 41 0.53 51 -0.06Urbar Ingenieros Machinery 23 4.6 42 0.49 21 0.52Sacyr Vallehermoso Construction 55 -12.3 43 0.47 47 -0.01Tubacex Steel 77 -24.8 44 0.47 45 0.03OHL Construction 57 -13.2 45 0.44 49 -0.05Duro Felguera Machinery 30 2.2 46 0.41 26 0.43

Desarrollos Especiales de Sistemas de Anclaje Machinery 31 2 47 0.41 27 0.42

Laboratorios Farmacéuticos Rovi Pharmacist 18 8.7 48 0.4 37 0.16Grifols clase B Biotechnology 54 -12.1 49 0.39 61 -0.17Union Catalana de Valores Real-estate 35 0 50 0.35 22 0.5Unipapel Household Products 5 29.2 51 0.34 11 0.85Dogi International Fabrics Textile 35 0 52 0.3 38 0.15Ercros Special chemicals 43 -4.8 53 0.25 50 -0.06Quabit Inmobiliaria Real-estate 51 -7.9 54 0.24 46 0.02Cía. General de Inversiones Sicav Investment Companies 46 -5.2 55 0.21 53 -0.08Ebro Foods Feeding 45 -5 56 0.19 64 -0.23Grupo Empresarial Ence Paper 76 -24.5 57 0.13 62 -0.19Iberdrola Electricity 59 -13.5 58 0.11 66 -0.26Endesa Electricity 60 -14.5 59 0.06 68 -0.28Telefónica Telecommunications 61 -14.7 60 0.06 77 -0.42


93

(continued)) Table A.4

Source: Datastream International via Wharton Research Data Services

Company Sector Absolute rate Standardized rate Standardized rate

Position % Position euro area Position WorldBanco Español de Crédito Banking 91 -37.3 61 0.04 80 -0.51Barón de Ley Alcoholic beverages 44 -4.9 62 0.03 58 -0.14Papeles y Cartones de Europa Paper 80 -26.9 63 0.02 65 -0.25Clínica Baviera Health Services 50 -7.1 64 0.01 85 -0.59Corporación Financiera Alba Financial Services 62 -15 65 -0.03 59 -0.17Indra Sistemas Information Services 71 -19.9 66 -0.05 73 -0.35Solaria Renewable energies 88 -32.4 67 -0.06 41 0.08Renta CorporaciónReal Estate

Real-estate 67 -18.6 68 -0.06 57 -0.13

Enagas Gas 34 0.6 69 -0.08 74 -0.36Campofrío Alimentación Feeding 56 -12.3 70 -0.1 75 -0.37Vidrala Containers 49 -6.8 71 -0.12 63 -0.21Inmolevante Real-estate 74 -21.5 72 -0.14 60 -0.17Prosegur Business Services 66 -18.1 73 -0.18 78 -0.45Sniace Special chemicals 65 -15.8 74 -0.18 70 -0.31ACS Construction 87 -31.3 75 -0.21 91 -0.68Vertice 360 Grados Publications and media 79 -26.1 76 -0.23 100 -0.8Tecnocom Telecommunications equipment 92 -37.4 77 -0.26 87 -0.64Laboratorios Almirall Pharmacist 70 -19.8 78 -0.28 84 -0.57Antena 3 Publications and media 81 -28.2 79 -0.3 103 -0.87La Seda de Barcelona Special chemicals 69 -19 80 -0.3 76 -0.39Prisa clase A Publications and media 99 -43 81 -0.3 79 -0.48Prisa clase B Publications and media 108 -47.3 82 -0.35 81 -0.54Montebalito Real-estate 82 -28.7 83 -0.35 67 -0.28IAG Airlines 109 -47.4 84 -0.35 90 -0.67Cleop Construction 84 -29.5 85 -0.38 104 -0.95Realia Business Real-estate 86 -30.1 86 -0.39 69 -0.3Indo Internacional Medical Supplies 35 0 87 -0.41 56 -0.12Prim Medical equipment 73 -21.2 88 -0.42 95 -0.73Vocento Publications and media 117 -55.4 89 -0.42 88 -0.65Gamesa Renewable energies 101 -43.3 90 -0.48 72 -0.35Amper Telecommunications equipment 98 -42.7 91 -0.51 97 -0.78Técnicas Reunidas Construction 95 -39.9 92 -0.51 105 -0.98Ezentis Telecommunications equipment 100 -43 93 -0.52 98 -0.79ArcelorMittal Steel 106 -46.2 94 -0.62 101 -0.8Nicolás Correa Machinery 85 -30.1 95 -0.64 102 -0.87Grupo Tavex Textile 78 -25.8 96 -0.65 82 -0.56Zeltia Pharmacist 93 -37.8 97 -0.71 107 -1.03Cementos PortlandValderribas

Construction Material 103 -44 98 -0.72 116 -1.35

NH Hoteles Hotels 90 -35.8 99 -0.74 92 -0.69Inypsa Informes y Proyectos Construction 107 -46.4 100 -0.74 111 -1.2Fersa Energias Renovables Electricity 96 -41.1 101 -0.85 115 -1.32Mediaset EspañaComunicación

Entertainment 104 -44.3 102 -0.86 119 -1.46

Reyal Urbis Real-estate 110 -48.4 103 -0.9 83 -0.56Service Point Solutions Business Services 97 -41.9 104 -0.92 113 -1.24Vueling Airlines Airlines 124 -60.2 105 -0.95 108 -1.15Biosearch Feeding 89 -34.7 106 -0.98 99 -0.79Fergo Aisa Real-estate 112 -51.7 107 -0.99 86 -0.61Meliá Hotels International Hotels 102 -43.5 108 106 -0.98Faes Farma Pharmacist 111 -51.1 109 -1.03 117 -1.37Metrovacesa Real-estate 118 -55.5 110 -1.1 89 -0.66Azkoyen Machinery 105 -45 111 -1.13 120 -1.48Adolfo Dominguez Clothing and fashion 94 -38.5 112 -1.14 123 -1.56Inmobiliaria Colonial Real-estate 120 -58.3 113 -1.18 93 -0.7Urbas Guadahermosa Real-estate 122 -58.9 114 -1.2 94 -0.71Grupo Empresarial San José Real-estate 123 -60.1 115 -1.23 96 -0.73Uralita Construction Material 116 -55.3 116 -1.28 126 -1.85Banco de Valencia Banking 127 -80.6 117 -1.38 124 -1.56CAM Banking 128 -80.8 118 -1.39 125 -1.57Amadeus IT Holding Financial Management 68 -18.7 119 -1.42 121 -1.5Dinamia Capital Privado Financial Services 113 -53.4 120 -1.49 118 -1.41General de Alquiler de Maquinaria

Transport Material 126 -74.8 121 -1.71 127 -1.95

Natraceutical Feeding 114 -53.6 122 -1.72 109 -1.15Cleop Construction 125 -74.5 123 -1.75 128 -2.18Bodegas Riojanas Alcoholic beverages 83 -29.5 124 -1.78 122 -1.54Natra Feeding 119 -56.5 125 -1.83 112 -1.2Deoleo Feeding 121 -58.7 126 -1.92 114 -1.24Nyesa Real-estate 129 -89.4 127 -2.06 110 -1.15Corporación Dermoestética Health Services 115 -53.7 128 -2.33 129 -2.21Hullera Vasco Leonesa Coal 39 -2.1 - - 16 0.7

Note: The Pearson correlation coefficient between the Standardized rate in the euro area and the Standardized rate in the world is 90.3%

94


Ranking by sector of the Spanish companies with the largest total shareholderreturns in 2011,relative to the companies in the same sector in the euro areaTable A.5

Company Sector Absolute rateStandardized rate

euro area WorldLingotes especiales Steel -8.6 1.3 0.65Tubos Reunidos Steel -15.6 0.94 0.38Acerinox Steel -21.9 0.62 0.14Tubacex Steel -24.8 0.47 0.03ArcelorMittal Steel -46.2 -0.62 -0.8Amadeus IT Holding Financial administration -18.7 -1.42 -1.5Viscofán Food 3.8 0.53 -0.06Ebro Foods Food -5 0.19 -0.23Campofrío Alimentación Food -12.3 -0.1 -0.37Biosearch Food -34.7 -0.98 -0.79Natraceutical Food -53.6 -1.72 -1.15Natra Food -56.5 -1.83 -1.2Deoleo Food -58.7 -1.92 -1.24Bankinter Banking 17.9 1.85 0.83Banco de Sabadell Banking 2.7 1.35 0.46CaixaBank Banking 1.9 1.32 0.44Banco Popular Español Banking -4 1.13 0.3Bankia Banking -4.1 1.12 0.29BBVA Banking -6.6 1.04 0.23Banca Cívica Banking -13.2 0.83 0.07Banco Santander Banking -20.4 0.59 -0.1Banco Español de Crédito Banking -37.3 0.04 -0.51Banco de Valencia Banking -80.6 -1.38 -1.56CAM Banking -80.8 -1.39 -1.57CVNE Alcoholic beverages 4.3 0.7 0.38Barón de Ley Alcoholic beverages -4.9 0.03 -0.14Bodegas Riojanas Alcoholic beverages -29.5 -1.78 -1.54Grifols Bio-technology 36.2 1.74 0.04Grifols clase B Bio-technology -12.1 0.39 -0.17Hullera Vasco Leonesa Coal -2.1 - 0.7Distribuidora Internacionalde Alimentación

Food industry 9.1 1.32 0.27

Cía. General de Inversiones Sicav Investment holdings -5.2 0.21 -0.08Cie Automotive Auto parts 16.9 1.01 1.14Inditex Fashion 15.3 1.5 0.57Adolfo Domínguez Fashion -38.5 -1.14 -1.56Grupo Ferrovial Construction 31.3 2.03 1.5Acciona Construction 30.7 2.01 1.48FCC Construction 8.2 1.2 0.7Abengoa Construction -10 0.8 0.94Sacyr Vallehermoso Construction -12.3 0.47 -0.01OHL Construction -13.2 0.44 -0.05ACS Construction -31.3 -0.21 -0.68Cleop Construction -29.5 -0.38 -0.95Técnicas Reunidas Construction -39.9 -0.51 -0.98Inypsa Informes y Proyectos Construction -46.4 -0.74 -1.2Cleop Construction -74.5 -1.75 -2.18Elecnor Electricity 2.3 1 0.06Red Eléctrica de España Electricity -2.3 0.74 -0.03Iberdrola Electricity -13.5 0.11 -0.26Endesa Electricity -14.5 0.06 -0.28Fersa Energias Renovables Electricity -41.1 -0.85 -1.32Solaria Renewable energy -32.4 -0.06 0.08Gamesa Renewable energy -43.3 -0.48 -0.35Zinkia Entertainment Enternainment 62.2 2.83 2.4Mediaset España Comunicación Enternainment -44.3 -0.86 -1.46Vidrala Packaging -6.8 -0.12 -0.21Tecnocom Telecommunications equipment -37.4 -0.26 -0.64Amper Telecommunications equipment -42.7 -0.51 -0.78Prim Medical equipment -21.2 -0.42 -0.73Laboratorios Farmacéuticos Rovi Pharmaceuticals 8.7 0.4 0.16Laboratorios Almirall Pharmaceuticals -19.8 -0.28 -0.57Zeltia Pharmaceuticals -37.8 -0.71 -1.03


95

(continued) Table A.5

Source: Datastream International via Wharton Research Data Services

Company Sector Absolute rateStandardized rate

euro area WorldFaes Farma Pharmaceuticals -51.1 -1.03 -1.37Gas Natural Gas 22.8 1.72 0.22Enagas Gas 0.6 -0.08 -0.36NH Hoteles Hotels -35.8 -0.74 -0.69Meliá Hotels International Hotels -43.5 - -0.98Sotogrande Real estate 23.8 1.13 0.48Testa Inmuebles en Renta Real estate 18.7 0.77 1.23Union Catalana de Valores Real estate 0 0.35 0.5Quabit Inmobiliaria Real estate -7.9 0.24 0.02Renta Corporación Real Estate Real estate -18.6 -0.06 -0.13Inmolevante Real estate -21.5 -0.14 -0.17Montebalito Real estate -28.7 -0.35 -0.28Realia Business Real estate -30.1 -0.39 -0.3Reyal Urbis Real estate -48.4 -0.9 -0.56Fergo Aisa Real estate -51.7 -0.99 -0.61Metrovacesa Real estate -55.5 -1.1 -0.66Inmobiliaria Colonial Real estate -58.3 -1.18 -0.7Urbas Guadahermosa Real estate -58.9 -1.2 -0.71Grupo Empresarial San José Real estate -60.1 -1.23 -0.73Nyesa Real estate -89.4 -2.06 -1.15IAG Airlines -47.4 -0.35 -0.67Vueling Airlines Airlines -60.2 -0.95 -1.15Zardoya Otis Machinery 10 0.67 0.74Urbar Ingenieros Machinery 4.6 0.49 0.52Duro Felguera Machinery 2.2 0.41 0.43Desarrollos Especiales deSistemas de Anclaje

Machinery 2 0.41 0.42

Nicolás Correa Machinery -30.1 -0.64 -0.87Azkoyen Machinery -45 -1.13 -1.48Fluidra Building materials -15.3 0.71 -0.09Cementos Portland Valderribas Building materials -44 -0.72 -1.35Uralita Building materials -55.3 -1.28 -1.85Ezentis Telecommunications materials -43 -0.52 -0.79CAF Transport mateterials 0.8 1.02 0.65General de Alquiler deMaquinaria

Transport mateterials -74.8 -1.71 -1.95

Miquel y Costas Paper 12.2 1.81 0.7Iberpapel Gestión Paper -6 0.98 0.26Grupo Empresarial Ence Paper -24.5 0.13 -0.19Papeles y Cartones de Europa Paper -26.9 0.02 -0.25Pescanova Fishing 6.3 1.67 0.25Repsol YPF Oil and gas 18.1 1.23 1.11Unipapel Household products 29.2 0.34 0.85Vertice 360 Grados Publications and media -26.1 -0.23 -0.8Antena 3 Publications and media -28.2 -0.3 -0.87Prisa clase A Publications and media -43 -0.3 -0.48Prisa clase B Publications and media -47.3 -0.35 -0.54Vocento Publications and media -55.4 -0.42 -0.65Ercros Special chemicals -4.8 0.25 -0.06Sniace Special chemicals -15.8 -0.18 -0.31La Seda de Barcelona Special chemicals -19 -0.3 -0.39Mapfre Insurance 24.3 1.69 1.4Grupo Catalana Occidente Accident insurance -2.1 0.81 -0.06Prosegur Business services -18.1 -0.18 -0.45Service Point Solutions Business services -41.9 -0.92 -1.24Indra Sistemas Information services -19.9 -0.05 -0.35Clínica Baviera Health services -7.1 0.01 -0.59Corporación Dermoestética Health services -53.7 -2.33 -2.21Abertis Transport services 7.1 1.16 0.72Funespaña Miscellaneous services 2.7 0.71 -0.32Bolsas y Mercados Españoles Financial services 25.7 1.9 1.94Renta 4 Financial services 4.1 0.86 1Corporación Financiera Alba Financial services -15 -0.03 -0.17Dinamia Capital Privado Financial services -53.4 -1.49 -1.41Indo Internacional Medical supplies 0 -0.41 -0.12Jazztel Telecommunicatios 5.1 1.15 0.13Telefónica Telecommunicatios -14.7 0.06 -0.42Dogi International Fabrics Textile 0 0.3 0.15Grupo Tavex Textile -25.8 -0.65 -0.56

Notes: The classification by sectors is used by Datastream International. These companies do not correspond exactly to the sectors, but we have preferred to maintain the classification as international investors consult this database and make decisions in line with the classifications contained therein

96


Ranking of Spanish companies with best average recommendation from stockmarket analysts in 2011, relative to companies in the sector in the euro areaTable A.6

Average recommendation score of 1 is best, and 5 is worst

CompanyNumber of recommendations Average recommendations

OutrightStandardized

euro areaStandardized

WorldOutright

Standardizedeuro area

Standardized World

Lets Gowex 1 -1.01 -0.9 1 -1.71 -1.73

Grupo San José 2 -0.75 -0.65 1 -1.57 -1.48

Grupo Nostrum 1 -0.77 -0.86 1 -1.39 -1.63

Secuoya 1 -0.77 -0.86 1 -1.39 -1.63

Zinkia Entertainment 1 -0.77 -0.86 1 -1.39 -1.63

Grupo Tavex 3 -0.56 -0.52 1.33 -1.35 -1.14

Unipapel 4 -0.47 -0.28 1.25 -1.22 -1.09

AB Biotics 1 -0.68 -0.81 1 -1.21 -1.49

Medcom Tech 1 -0.68 -0.81 1 -1.21 -1.49

CAF 11 0.25 0.62 1.45 -1.03 -0.88

Elecnor 2 -0.75 -0.65 1.5 -0.97 -0.82

Cie Automotive 5 -0.36 -0.13 1.6 -0.83 -0.61

Pescanova 8 -0.03 0.2 1.75 -0.81 -0.58

OHL 21 1.37 2.02 1.67 -0.76 -0.6

Arcelor Mittal 9 0.07 0.48 1.67 -0.75 -0.52

Papeles y Cartón 10 0.18 0.63 1.7 -0.72 -0.48

Ferrovial 27 2.04 2.86 1.74 -0.68 -0.5

Iberpapel 4 -0.47 -0.28 1.75 -0.66 -0.41

Miquel y Costas 4 -0.47 -0.28 1.75 -0.66 -0.41

Jazztel 19 0.38 1.05 1.89 -0.61 -0.57

ENCE 15 0.72 1.39 1.8 -0.61 -0.34

Vueling Airlines 9 0.01 0.03 1.89 -0.56 -0.54

Repsol 43 2.85 4.05 1.79 -0.54 -0.5

International Airlies Group 15 0.65 0.84 1.93 -0.52 -0.49

Fluidra 9 0.03 0.34 1.89 -0.5 -0.31

Ebro Foods 16 0.83 1.35 2 -0.48 -0.25

Distribuidora Intal. de Alimentación 22 1.48 2.22 2.05 -0.42 -0.18

Acciona 25 1.66 2.14 2.04 -0.42 -0.33

Vidrala 11 0.29 0.78 2 -0.38 -0.06

Amadeus 23 3.25 2.14 1.83 -0.36 -0.41

Enagas 27 1.48 2.17 1.96 -0.34 -0.26

Grupo Catalana Occidente 8 -0.05 0.06 2.13 -0.32 -0.21

Corporación Financiera Alba 12 0.4 0.93 2.08 -0.29 0.05

Sacyr Vallehermoso 17 0.85 1.16 2.18 -0.26 -0.14

Acerinox 22 1.48 2.45 2.18 -0.18 0.18

Dinamia 4 -0.46 -0.43 2.25 -0.18 -0.04

PRISA 17 1.14 1.21 2.12 -0.15 -0.07

Codere 8 0.07 0.05 2.13 -0.14 -0.06

Abertis 27 2.04 2.86 2.19 -0.14 0.09

Grupo Duro Felguera 6 -0.36 -0.1 2.17 -0.11 0.05

FAES 10 0.18 0.63 2.3 -0.05 0.35

Abengoa 21 1.37 2.02 2.29 -0.02 0.22

Técnicas Reunidas 24 1.7 2.44 2.29 -0.02 0.22

Telefónica 42 2.17 3.55 2.38 -0.01 0.07

Red Eléctrica de España 31 1.83 2.64 2.26 0 0.18

Realia 12 0.35 0.55 2.42 0.01 0.18

NH Hoteles 20 1.26 2.15 2.4 0.06 0.49

Campofrío 9 0.08 0.34 2.44 0.09 0.33

Meliá Hotels 20 1.5 1.6 2.35 0.11 0.25

Inditex 32 2.55 3.66 2.47 0.12 0.37

Mediaset 32 2.93 3.15 2.38 0.14 0.29

Banca Cívica 7 -0.15 -0.06 2.57 0.17 0.39

Grifols 22 1.61 2.06 2.27 0.22 0.35

Bolsas y Mercados Españoles 22 1.36 1.78 2.64 0.25 0.48

Viscofán 14 0.62 1.06 2.57 0.25 0.5


97

(continued)

Source: I/B/E/S (Institutional Brokers Estimates System) via Wharton Research Data Services

Table A.6

CompanyNumber of recommendations Average recommendations

OutrightStandardized

euro areaStandardized

WorldOutright

Standardizedeuro area

StandardizedWorld

Fersa 2 -0.65 -0.75 2.5 0.28 0.52

Laboratorios FAR 12 0.52 0.69 2.33 0.28 0.44

Gas Natural 26 0.93 1.81 2.65 0.33 0.43

BBVA 41 3.27 4.1 2.73 0.35 0.6

Barón de Ley 9 0.08 0.34 2.67 0.38 0.63

Iberdrola 33 1.47 2.57 2.7 0.39 0.49

Gamesa 28 2.15 3 2.68 0.45 0.73

Almirall 18 1.17 1.51 2.5 0.47 0.68

Endesa 21 0.54 1.27 2.81 0.52 0.63

ACS 24 1.7 2.44 2.75 0.54 0.82

Antena 3 28 1.08 2.03 2.82 0.54 0.65

Clínica Baviera 7 -0.02 0.01 2.57 0.55 0.78

Banco Santander 40 3.17 3.98 2.98 0.63 0.94

Renta 4 1 -0.76 -0.79 3 0.65 0.96

Banesto 22 1.36 1.78 3.05 0.71 1.03

Amper 4 -0.78 -0.57 3 0.76 0.88

Prosegur 18 1.26 1.34 3 0.83 1.15

Grupo Ezentis 1 -0.86 -0.79 3 0.84 1.15

Mapfre 23 1.46 1.9 3.26 0.94 1.31

FCC 21 1.37 2.02 3.14 1.01 1.33

Caixabank 18 0.95 1.29 3.39 1.08 1.49

Indra Sistemas 27 3.93 2.65 3.19 1.17 1.46

Cementos Portland 11 0.25 0.62 3.36 1.27 1.62

Bankia 14 0.55 0.8 3.57 1.28 1.73

Ercros 2 -0.69 -0.58 3.5 1.29 2

Tecnocom 2 -0.75 -0.65 3.5 1.44 1.81

Banco Popular Español

29 2.06 2.63 3.76 1.49 1.98

Bankinter 25 1.66 2.14 3.84 1.58 2.09

La Seda de Barcelona 4 -0.54 -0.36 3.75 1.65 2.07

Sabadell 27 1.86 2.39 3.93 1.68 2.21

Solaria Energía 4 -0.48 -0.52 3.75 1.72 2.33

Banco Pastor 12 0.35 0.55 4 1.76 2.31

Metrovacesa 7 -0.15 -0.06 4 1.76 2.31

Reyal Urbis 1 -0.76 -0.79 4 1.76 2.31

Zardoya Otis 13 0.5 1.09 3.92 1.76 2.57

Vocento 13 0.66 0.69 3.85 1.77 2.34

Adolfo Domínguez 4 -0.46 -0.38 3.75 1.78 2.06

Natra 6 -0.24 -0.09 3.83 1.89 2.17

Zeltia 7 -0.15 0.18 4.14 2.01 2.87

Azkoyen 5 -0.42 -0.22 4 2.04 2.46

Uralita 5 -0.36 -0.3 4.4 2.2 2.84

Deoleo 8 -0.03 0.2 4.13 2.27 2.56

Inmobiliaria Colonial 5 -0.36 -0.13 4.4 2.3 3.23

General de Alquiler de Maquinaria

6 -0.17 -0.21 4.33 2.31 3.01

Renta Corporación 4 -0.46 -0.43 4.5 2.32 2.98

Service Point 3 -0.64 -0.51 4.33 2.44 2.9

Natraceutical 4 -0.35 -0.4 4.25 2.44 3.22

Corporación Dermoes-tética

7 -0.02 0.01 4.29 2.48 3.28

Banco de Valencia 1 -0.76 -0.79 5 2.87 3.65

Quatib Inmobiliaria 1 -0.76 -0.79 5 2.87 3.65

Vértice Trescientos 1 -0.77 -0.86 5 3.05 3.94

Dogi International Fabrics

1 -0.78 -0.81 5 3.4 3.71

Note: The average recommenation was calculated rating the securities: “strong buy”=1, “buy”=2, “hold”=3, “underperform”=4, and “sell”=5. The Pearson co-rrelation coefficient between the Standardized average recommendation in the euro area and the Standardized average recommendation in the world is 98.7%


7. Bibliography

99

Bank of Spain (2012). Informe Anual de Balanza de Pagos y Posición de Inversión Internacional de España, 2011.

International Monetary Fund (2012) Perspectivas de la economía mundial: Hacer frente a los altos niveles de deuda y al lento crecimiento. October 2012. IMF, Washington.

International Monetary Fund (2012) Actualización de Perspectivas de la economía mundial. Frente a nuevos reve-ses, se necesitan medidas de política adicionales. June 2012. IMF, Washington.

International Monetary Fund (2012) Perspectivas de la economía mundial. Reanudación del crecimiento, peligros persistentes; April 2012.

Guillén, Mauro F. (2009) The Global Economic & Financial Crisis: A Timeline.

Ministerio de Industria, Comercio y Turismo (2012) Flujos de inversiones exteriores directas 2011. Dirección General de Comercio e Inversiones.

World Trade Organization (2012) Informe sobre el comercio mundial 2012. Comercio y políticas públicas: Análisis de las medidas no arancelarias en el siglo XXI. July 2011.

UNCTAD (2012) Informe sobre las inversiones en el mundo 2012. Hacia una nueva generación de políticas de inversión. June 2012. Naciones Unidas.

UNCTAD (2012) Global Investment Trends Monitor. October 2012.


8. Recent publications ofthe Círculo de Empresarios

101

Documents Círculo de Empresarios, PGE-2013: la hora de las Administraciones Territoriales, September/October 2012.

Así está la economía… monthly publication since February 2011 to July 2012.

Documents Círculo de Empresarios, Un sistema sanitario sostenible (II), June/July 2012.

Brown Paper 2012, El futuro del euro, July 2012.

Ante la crisis de España y del euro, June 2012.

Así está la empresa… monthly publication since June 2012.

Documents Círculo de Empresarios, PGE-2012: consolidación de emergencia como un primer paso, March/April 2012.

Joint document Círculo de Empresarios - Cepyme on las PYME como clave para recuperar el crecimiento y el empleo, February 2012.

2011 Yearbook on the Internationalization of Spanish Companies, Wharton School and Círculo de Empresarios, January 2012.

Documents Círculo de Empresarios, Un programa de ajuste y crecimiento para la próxima legislatura, October/November 2011.

Brown Paper 2010, Cómo reformar las Administraciones Territoriales, September 2011.

Documents Círculo de Empresarios, Las PYME: clave para recuperar el crecimiento y el empleo, July/September 2011.

Apuntes económicos del Círculo, number 5, June 2011, España: todavía a la espera de la recuperación.

Joint document Círculo de Empresarios – CEOE on la competitividad de la industria española, May 2011.

Documents Círculo de Empresarios, Administraciones Territoriales: propuestas para la mejora de la eficiencia y de la unidad de mercado, March/April 2011.

Ideas sobre la mesa nº 2, Los rescates de dos economías de la Zona Euro: Grecia e Irlanda, February 2011.

Apuntes económicos del Círculo, number 4, February 2011: Los desequilibrios globales.

Ideas sobre la mesa nº 1, La reforma del Código Penal, January 2011.

Apuntes económicos del Círculo, number 3, December 2010: La complicada situación creada por la inestabilidad de los mercados financieros.

2010 Yearbook on the Internationalization of Spanish Companies, Wharton School y Círculo de Empresarios, November 2010.

Education

Yearbook 2012 Internationalization of Spanish Companies