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© 2012, Círculo de Empresarios Calle Marques de Villamagna, 3, 10ª Planta, 28001 Madrid Authors: Ofelia Marín - Lozano

- Head of the Economics Department, Círculo de Empresarios Mauro F. Guillén - Director of the Lauder Institute, The Wharton School María Grandal Bouza - Economic Roling Analyst of the Economics Department, Círculo de Empresarios Legal Deposit: M-38180-2012 Design: Tres Tipos Gráficos Printer: Imprimex

YEARBOOK 2012
INTERNATIONALIZATION OF SPANISH COMPANIES

2012 Yearbook on the Internationalization of Spanish Companies

Table of contents

Presentation Prologue

13 15 19 23 27 29 29 35 38 39

1. The world and Spanish economies in 2011-2012 1.1 International trade 1.2 Foreign direct investment 1.3 Spain’s foreign sector Analysis of the Balance of Payments: current account and capital account balance Spain’s foreign sector: changes in capital flows Spain’s foreign sector: reduced debt position Other indicators relating to the international presence of Spanish companies

2. Spanish companies from an international perspective 2.1 Shareholders Returns in a European and Global Context 2.2 Investment bank analysts and Spanish companies 2.3 Visibility of Spanish Companies in the international financial press 2.4 Conclusion

41 42 49 53 60 63 64 64 65 65 66 66 67 68 68 69 70 71 72 72 72

3. Special Mentions for the Internationalization of Spanish Companies 3.1 Major Companies with a Significant Track Record of Internationalization 3.1.1 Banco Santander 3.1.2 Iberdrola 3.1.3 OHL 3.2 Internationalization Operations in 2011 3.2.1 Línea Ferroviaria Medina-La Meca 3.2.2 Gestamp Automoción 3.3 Medium-sized Companies with a Significant Track Record of Internationalization 3.3.1 Fluidra 3.3.2 Maxam 3.3.3 Tubacex 3.3.4 Privalia 3.4 Foreign Investment in Spain 3.4.1 Ford 3.4.2 Hutchison Whampoa

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Yearbook on the Internationalization of Spanish Companies 2012

4. The New Latin Argonauts: Could they help in the internationalisation of Spain? (Author: Javier Santiso) 4.1 The Latin American diaspora 4.2 The Entrepreneur diaspora in Spain 4.3 Conclusion 5. Internationalization of the company (Author: Pablo Isla) 6. Statistical Annex 7. Bibliography

75 76 79 81 83 87 99 101

8. Recent publications of the Círculo de Empresarios

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2012 Yearbook on the Internationalization of Spanish Companies

List of Tables

Table 1.1: Table 1.2: Table 1.3: Table 1.4: Table 1.5: Table 1.6: Table 1.7: Table 1.8: Table 1.9: Table 1.10: Table 1.11: Table 1.12: Table 1.13: Table 1.14: Table 1.15: Table 2.1: Table 2.2: Table 2.3: Table 2.4: Table 2.5: Table 2.6: Table 2.7: Table 2.8: Table 2.9:

IMF forecasts on GDP growth Spanish non-financial multinationals among the world’s leaders by international presence, 2011 GDP and trade in goods by regions, 2009-2011 Main exporter of goods, 2011 Main importers of goods, 2011 Major cross-border mergers and acquisitions worldwide in 2011 Balance of payments: balances Foreign trade in goods, specialization by product Foreign trade in goods, specialization by geographical area Spain’s foreign trade performance by geographical area Geographical breakdown of remittance payments in 2010 and 2011 Foreign Direct Investment transactions in 2010 and 2011. Breakdown by sector of economic activity Foreign Direct Investment transactions in 2010 and 2011. Breakdown by geographical area International investment position. Breakdown by sector (% of GDP) International investment position Breakdown by instruments (% of GDP) Top 25 Spanish companies by total shareholder return rate in 2011 Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 2011 figures) Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 1995-2011 average) Top 10 IBEX 35 companies by total shareholder return rate (Companies and rates ranked by 1995-2011 average) Top Spanish companies by total shareholder return rate in 2010, relative to companies in the same sector in Euro area Stock market analysts` recommendations on IBEX 35 companies, 1998-2011 Top 10 Spanish companies by average recommendation from stock market analysts in 2011, compared to companies in the same sector within the Euro area Top 25 Spanish companies by references in the international financial press, 1995-2011 Top 25 Spanish companies by references in the international financial press in 20101, by publication

19 21 24 25 26 29 30 31 32 33 34 36 37 38 39 44 45 46 47 48 50 52 56 58

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2012 Yearbook on the Internationalization of Spanish Companies

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

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

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2012 Yearbook on the Internationalization of Spanish Companies

Presentation

This is the sixth edition of the Yearbook on the Internationalization of Spanish Companies, published by the Círculo de Empresarios in conjunction 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 internationalize 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 history. 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 benefits 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 relating 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 involved 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 worthwhile.

Mónica de Oriol Chair of Círculo de Empresarios

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2012 Yearbook on the Internationalization of Spanish Companies

Prologue

In 2011 the world economy continued to recover. However, this recovery was undermined by the uncertainties and lack of confidence which flooded the markets, affecting most notably 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 Outlook, 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 governments, 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 continue 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 buildup and widening of imbalances. In the specific case of the Spanish economy, according to data from the International Monetary 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 operate abroad, pursing their internationalization strategy. In addition, some bolstered their presence 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 publication, once again this year, Círculo de Empresarios wishes to offer the public an instrument 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 chapters, examines the economic context in which Spanish companies are operating both in Spain and abroad, as well as their achievements and challenges.

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Yearbook on the Internationalization of Spanish Companies 2012

Chapter one offers a brief overview of the global and national economic framework, and an analysis of the main characteristics of international trade and direct foreign investment for the period 2011-2012. The second chapter reviews, from the international standpoint, the performance of Spanish companies in terms of total shareholder returns, equity market analysts’ recommendations and companies’ coverage in the international financial press. In general, the situation in 2011 represents a continuation of the negative trends from 2010 in relation to stock market performance 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 anticipation of analysts who predict new difficulties in 2012. Owing to the problems faced by Spanish financial and non-financial companies, the coverage of Spanish companies in the international financial press increased significantly in 2011, surpassing the 2006 coverage record. This part ends with chapter three, in which Círculo de Empresarios recognizes the work of those Spanish companies which, through their internationalization, contribute to Spain’s global 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 especially significant, and for both medium and large 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 occasion, two chapters. The first chapter focuses on the importance of business diasporas, Latin ones in particular, in driving the internationalization 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 internationalization experience of this textile group, an international leader in the fashion industry.

Belén Romana, General Secretary of Círculo de Empresarios

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1
IMF forecasts on GDP growth
Percentage variation World Advanced economies United States European Union Euro area Germany France Italy Spain Japan United Kingdom Canada Other advanced economies Newly industrialized Asian economies Emerging and developing economies Sub-Saharan Africa Central and Eastern Europe Commonwealth of Independent States Russia Excluding Russia Developing Asia China India ASEAN 5 ** Middle East and North Africa Latin American and the Caribbean Brazil Mexico

The world and Spanish economies in 2011-2012

Throughout 2011, the world economy slowed down, highlighting the fragility of the recovery, 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).

Table 1.1
Source: IMF (WEO October 2012) 2010 5.1 3.0 2.4 2.1 2.0 4.0 1.7 1.8 -0.3 4.5 1.8 3.2 5.9 8.5 7.4 5.3 4.6 4.8 4.3 6.0 9.5 10.4 10.1 7.0 5.0 6.2 7.5 5.6 2011 3.8 1.6 1.8 1.6 1.4 3.1 1.7 0.4 0.4 -0.8 0.8 2.4 3.2 4.0 6.2 5.1 5.3 4.9 4.3 6.2 7.8 9.2 6.8 4.5 3.3 4.5 2.7 3.9 2012* 3.3 1.3 2.2 -0.2 -0.4 0.9 0.1 -2.3 –1.5 2.2 -0.4 1.9 2.1 2.1 5.3 5.0 2.0 4.0 3.7 4.7 6.7 7.8 4.9 5.4 5.3 3.2 1.5 3.8 2013* 3.6 1.5 2.1 0.5 0.2 0.9 0.4 -0.7 -1.3 1.2 1.1 2.0 3.0 3.6 5.6 5.7 2.6 4.1 3.8 4.8 7.2 8.2 6.0 5.8 3.6 3.9 4.0 3.5

* Forecasts ** ASEAN 5: Phillipines, Indonesia, Malasia, Thailand and Vietnam. 19

Yearbook on the Internationalization of Spanish Companies 2012

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 markets, 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 economic 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 concern 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 consolidate 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 consolidation and structural reforms to boost potential output. In the case of emerging and developing economies, there is a need to gauge the macroeconomic 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 forecasts 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 climbed a position, ranking 15th (holding a share of 2%). With regard to trade in services, Spain advanced a position to rank 8th for exports (3.4%), and remained in 14th place for imports (2.4%).

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Yearbook on the Internationalization of Spanish Companies 2012

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 total, 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 internationalization 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 economy 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 companies in the Forbes 2,000 index, which refers to the top 2,000 global companies.

Spanish non-financial multinationals among the world’s leaders by international presence, 2011
Millions of dollars and number of employees

Table 1.2
Source: WIR 2012, UNCTAD

Assets Abroad Telefónica S.A. Iberdrola S.A. Repsol YPF S.A. 147,903 88,048 58,336 Total 180,186 134,702 98,634 % of total 82.1 65.4 59.1 Abroad 63,014 23,211 44,115

Sales Total 87,346 44,896 83,572 % of total 72.1 51.7 52.8 Abroad 231,066 19,436 26,441

Employees Total 286,145 31,885 46,575 % of total 80.8 61.0 56.8

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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 global 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, commodity prices picked up, but in general terms, they remain below the levels recorded at the end of 2010.

Index of commodity prices
(2005=100) Source: IMF

230 210 190 170 150 130 110 90 70 2005M12 2006M12 2007M12 2008M12 2009M12 2010M03 2010M06 2010M09 2010M12 2011M03 2011M06 2011M09 2011M12 2012M03 2005M9 2006M3 2006M6 2006M9 2007M3 2007M6 2007M9 2008M3 2008M6 2008M9 2009M3 2009M6 2009M9

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 property 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.

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2012 Yearbook on the Internationalization of Spanish Companies

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 producing 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 remain 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 particular financial and economic uncertainly at international 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 Libya) 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).

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Yearbook on the Internationalization of Spanish Companies 2012

Table 1.3
Annual percent change at constant prices GDP 2009 World North America US Central and South America Europe European Union (27) Commonwealth of Independent States (CIS) Africa Middle East Asia China Japan India Newly industrialized countries c Developed economies Developing economies and CIS
a b a

GDP and trade in goods by regions, 2009-2011
Source: WTO Secretariat Exports 2011 2.4 1.9 1.7 4.5 1.7 1.5 4.6 2.3 4.9 3.5 9.2 -0.5 7.8 4.2 1.5 5.7 2009 -12.0 -14.8 -14.0 -8.1 -14.1 -14.5 -4.8 -3.7 -4.6 -11.4 -10.5 -24.9 -6.0 -5.7 -15.1 -7.4 2010 13.8 14.9 15.4 5.6 10.9 11.5 6.0 3.0 6.5 22.7 28.4 27.5 22.0 20.9 13.0 14.9 2011 5.0 6.2 7.2 5.3 5.0 5.2 1.8 -8.3 5.4 6.6 9.3 -0.5 16.1 6.0 4.7 5.4 2009 -12.9 -16.6 -16.4 -16.5 -14.1 -14.1 -28.0 -5.1 -7.7 -7.7 2.9 -12.2 3.6 -11.4 -14.4 -10.5 Imports 2010 13.7 15.7 14.8 22.9 9.7 9.5 18.6 7.3 7.5 18.2 22.1 10.1 22.7 17.9 10.9 18.1 2011 4.9 4.7 3.7 10.4 2.4 2.0 16.7 5.0 5.3 6.4 9.7 1.9 6.6 2.0 2.8 7.9

2010 3.8 3.2 3.0 6.1 2.2 2.1 4.7 4.6 4.5 6.4 10.4 4.0 10.1 8.0 2.9 7.2

-2.6 -3.6 -3.5 -0.3 -4.1 -4.3 -6.9 2.2 1.0 -0.1 9.2 -6.3 6.8 -0.6 -4.1 2.2

Including the Caribbean It is a supranational organization comprising 10 former Soviet republics c Hong Kong, China, Rep. of Korea, Singapore and Chinese Taipei
b

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 increases of 16.1% in India and 9.3% in China are noteworthy. Export growth in the developed economies in 2011 exceeded 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 contributed 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 countries 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 economies and the CIS (7.9%), compared with developed economies (2.8%). In 2011, exchange rates were considerably volatile, which affected the competitiveness of some economies and prompted measures to be taken (Switzerland and Brazil). The fluctuations were largely due to attitudes towards risk in relation to the sovereign debt crisis in the euro area.

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2012 Yearbook on the Internationalization of Spanish Companies

Nominal trade flows were also affected by recent economic 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 retained 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%.

Main exporter of goods, 2011
Billions of dollars and by percentage Percentage as per global total 10.4 8.1 8.1 4.5 3.6 3.3 3.0 2.9 2.9 2.6 2.6 2.5 0.1 2.4 2.5 2.2 1.2 1.0 2.0 1.9 1.7 1.6 1.6 1.6

Table 1.4
Source: WTO Annual percentage variation 20 16 17 7 15 14 19 17 30 17 17 14 14 14 17 16 23 10 45 17 12 17 35 30

Rank China United States Germany Japan Netherlands France Rep. of Korea Italy Russia Belgium United Kingdom Hong Kong, China - National exports - Reexports Canada Singapore - National exports - Reexports Saudi Arabia Mexico Chinese Taipei Spain India United Arab Emirates 15 16 17 18 19 20 13 14 1 2 3 4 5 6 7 8 9 10 11 12

Value 1,899 1,481 1,474 823 660 597 555 523 522 476 473 456 17 439 452 410 224 186 365 350 308 297 297 285

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Yearbook on the Internationalization of Spanish Companies 2012

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

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

Table 1.5
Billions of dollars and by percentage

Main importers of goods, 2011
Source: WTO

Rank United States China Germany Japan France United Kingdom Netherlands Italy Rep. of Korea Hong Kong, China - Imports-reimports Canada a Belgium India Singapore - Imports-reimports Spain Mexico Russia a Chinese Taipei Australia Turkey Imports according to FOB values 15 16 17 18 19 20 11 12 13 14 1 2 3 4 5 6 7 8 9 10

Value 2,265 1,743 1,254 854 715 636 597 557 524 511 130 462 461 451 366 180 362 361 323 281 244 241

Percentage as per global total 12.3 9.5 6.8 4.6 3.9 3.5 3.2 3.0 2.9 2.8 0.7 2.5 2.5 2.5 2.0 1.0 2.0 2.0 1.8 1.5 1.3 1.3

Annual percentage variation 15 25 19 23 17 13 16 14 23 16 16 15 17 29 18 27 11 16 30 12 21 30

a

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 travel-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.

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2012 Yearbook on the Internationalization of Spanish Companies

Foreign direct investment
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 economic 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 trillion 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 higher 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 economies experienced a fall in FDI inflows for the third consecutive year. In Africa, the regression is essentially explained by divestment in North Africa (specifically to Egypt and Syria, due to political instability).

1.2

FDI inflows 1980-2011
Billions of dollars

Chart 1.1
Source: UNCTAD

Developed economies Developing economies Transition economies
World 2002 2000 2003 2004 2005 2006 2007 2001 2008 2009 1997 1998 2010 1996 1999 2011
27

2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0
1984

1991

1987

1989

1990

1986

1988

1992

1993

1994

1980

1982

1983

1981

1985

1995

Yearbook on the Internationalization of Spanish Companies 2012

As to FDI outflows, flows towards advanced countries rose sharply by 25% in 2011, reaching 1.24 trillion dollars. This increase is essentially explained by reinvestment 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, interest 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, utilities, transport, communication and other services. By FDI entry modes, cross-border mergers and acquisitions 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 financial capacity of buyers. New investment (greenfield) stayed around 904 billion (more than two thirds invested in developing and transition 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 performed throughout the globe, as evidenced by the UNCTAD ranking of the largest mergers and acquisitions 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.

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2012 Yearbook on the Internationalization of Spanish Companies

Major cross-border mergers and acquisitions worldwide in 2011
US$ billions

Table 1.6
Source: UNCTAD, WIR 2012

Ranking

Amount GDF Suez Energy

Objective Company/ country /sector

Buyer Company/ country International Power PLC (United Kingdom) VimpelCom Ltd (Netherlands) Sanofi-Aventis SA (France) Takeda Pharmaceutical Co Ltd (Japan) BHP Billiton PLC (United Kingdom) SABMiller Beverage Investments Pty Ltd (Australia) BRE Retail Holdings Inc (United States) BP PLC (United Kingdom) Microsoft Corp (United States) Mitsubishi UFJ Financial Group Inc (Japan)

1 2 3 4 5 6 7 8 9 10

25.1 22.4 21.2 13.7 11.8 10.8 9.4 9.0 8.5 7.8

(Belgium) Natural gas transmission Weather Investments Srl (Italy) Telecommunications Genzyme Corp (United States) Biological products, except substance analysis Nycomed International Management GmbH (Switzerland) Pharmaceutical products Petrohawk Energy Corp (United States) Oil and natural gas Foster´s Group Ltd (Australia) Beverages Centro Properties Group (United States) Property Reliance Industries Ltd (India) Oil and natural gas Skype Global Sarl (Luxemburg) Software Morgan Stanley (United States) Bank holdings

Spain’s foreign sector
A) Analysis of the Balance of Payments: current account and capital account balance Spain’s external imbalances continued their course of adjustment in 2011. According to the data compiled in the report on the balance of payments 2011 (Table 1.7), published by the Bank of Spain in 2012, the funding requirements 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 (practically one point lower than in 2010).

1.3

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).

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Yearbook on the Internationalization of Spanish Companies 2012

Table 1.7
% of GDP

Balance of payments: balances
Source: Bank of Spain

2004 CAPACITY (+)/FUNDING (-) REQUIREMENTS Current account Goods Services - Travel and tourism - Other services Income Current transfers Capital account FINANCIAL ACCOUNT a Excluding Bank of Spain Foreign direct investment Portfolio investment Other investments Financial derivatives Bank of Spain b ERRORS AND OMISSIONS -4.2 -5.3 -6.4 2.6 3.2 -0.6 -1.4 0.0 1.0 4.1 5.8 -3.4 10.2 -1.0 0.0 -1.7 0.1

2005 -6.5 -7.4 -7.5 2.4 2.9 -0.5 -1.9 -0.4 0.9 6.7 6.9 -1.5 6.5 1.9 0.0 -0.2 -0.2

2006 -8.3 -9.0 -8.5 2.3 2.8 -0.5 -2.1 -0.7 0.6 8.7 11.3 -6.0 20.3 -3.2 -0.2 -2.6 -0.4

2007 -9.6 -10.0 -8.7 2.2 2.6 -0.4 -2.9 -0.7 0.4 9.6 8.3 -4.8 10.0 3.5 0.4 1.4 0.0

2008 -9.1 -9.7 -8.0 2.4 2.6 -0.1 -3.3 -0.9 0.5 9.2 5.9 -0.7 0.4 7.0 0.6 2.8 -0.1

2009 -4.4 -5.2 -4.0 2.4 2.5 -0.1 -2.8 -0.8 0.4 5.0 4.2 -0.1 4.3 0.5 -0.6 1.0 -0.5

2010 -3.9 -4.5 -4.4 2.6 2.5 0.1 -2.0 -0.7 0.6 4.1 2.6 -0.1 2.9 -0.9 0.8 1.5 -0.2

2011 -3.0 -3.5 -3.7 3.2 2.9 0.3 -2.4 -0.6 0.5 3.2 -7.1 -0.6 -2.3 -4.5 0.2 10.2 -0.1

a b

Variation in liabilities less variation in assets 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 increase in the services surplus and the reduction in the current transfers deficit, which offset the marked deterioration 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 downturn in global trade), against 8.7% for imports. The annual 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 competitivenessprice 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.

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2012 Yearbook on the Internationalization of Spanish Companies

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 reflect the strength of exports in the context of a downturn 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 notable 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 machinery. Exports of energy intermediate goods grew 36.7% and non-energy intermediate goods by 10.7%.

Foreign trade in goods, specialization by product
% of total

Table 1.8

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

2011
Products Foods Energy products Commodities Non-chemical semimanufacturing Non-ferrous metals Iron and steel Paper Ceramic products and similar items Other semimanufacturing Chemical products Organic chemical products Inorganic chemical products Plastics Medicines Fertilizers Tanning and dyeing products Perfumes and essential oils Rest of chemical products Capital goods Industrial machinery Office equipment and telecommunications Transport material Other capital goods Automotive sector Cars and motorcycles Auto parts Durable consumer goods Consumer manufacturing Textiles and clothing Footwear Toys Other consumer manufacturing Other goods

Exports
14.2 7.4 2.7 12.2 2.2 4.1 1.6 1.3 3.0 13.7 1.6 0.4 3.8 4.1 0.3 0.9 1.5 1.2 20.1 5.1 1.3 5.1 8.6 15.4 10.5 5.0 1.7 8.2 4.6 1.0 0.3 2.3 4.4

Imports
10.4 21.4 4.3 7.5 1.4 3.1 1.3 0.2 1.5 14.5 2.8 0.8 3.0 4.3 0.3 0.5 1.1 1.8 17.9 4.6 4.5 1.8 7.0 10.4 4.2 6.2 2.5 10.5 5.9 0.9 0.7 3.0 0.7

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Yearbook on the Internationalization of Spanish Companies 2012

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 significant 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 demand 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%. Intermediate 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 intermediate goods. By geographical areas, in real terms, purchases outside 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.

Table 1.9
% of total

Foreign trade in goods, specialization by geographical area
Source: Spanish Ministry of Economy and Competitiveness 2011

Regions/countries EUROPEAN UNION EURO AREA France Germany Italy Portugal REST OF EU United Kingdom REST OF EUROPE Russia NORTH AMERICA US LATIN AMERICA Mexico Brazil Argentina REST OF AMERICA ASIA India China Japan AFRICA Morocco Algeria OCEANÍA Australia OECD NAFTA MERCOSUR OPEC

Exports 66.0 52.8 17.9 10.2 7.9 8.0 13.3 6.4 7.6 1.2 4.2 3.7 5.6 1.4 1.2 0.5 0.1 7.9 0.6 1.6 0.9 5.4 1.9 1.2 0.8 0.7 77.8 5.6 1.8 3.9

Imports 52.8 42.8 10.8 11.8 6.6 3.9 10.0 4.0 6.9 3.2 4.5 4.1 6.1 1.4 1.4 0.8 0.6 19.8 1.1 7.1 1.2 8.9 1.2 2.2 0.5 0.3 64.2 5.9 2.3 11.2

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2012 Yearbook on the Internationalization of Spanish Companies

Spain’s foreign trade performance by geographical area
Nominal variation

Table 1.10
Source: Bank of Spain. Balance of Payments Report

Total 2005-09 Exports Total OECD EU 27 United Kingdom Euro area (EMU 16) Germany France Italy United States OPEC CIS and other Central and Eastern European countries b NIC c Rest of world Imports Total OECD EU 27 United Kingdom Euro area (EMU 16) Germany France Italy United States OPEC CIS and other Central and Eastern European countries b NIC c Rest of world
d

2010 a 17.4 16.2 15.4 15.1 15.0 10.7 12.4 25.8 12.5 11.0 26.6 25.2 25.8

2011 a 15.4 13.5 12.6 19.5 9.6 12.2 13.3 4.4 20.8 28.5 49.5 1.8 17.5

1.7 0.4 0.2 -5.3 0.7 0.7 1.7 -0.3 -0.3 9.3 9.7 8.4 5.6

-0.2 -2.5 -2.4 -5.0 -2.9 -3.7 -5.4 -4.7 2.4 6.7 6.1 -4.6 6.3

14.2 7.7 6.9 10.7 4.5 -6.6 2.0 12.1 10.1 34.9 23.1 6.9 27.2

9.6 6.5 5.9 -2.2 6.7 10.0 10.6 2.4 12.8 20.5 33.2 -3.5 10.0

Provisional data, Department of Customs Including Russia, Ukraine, Belorussia, Moldavia, Georgia, Armenia, Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Romania, Bulgaria, Albania, Croatia, Bosnia and Herzegovina, Serbia and Montenegro c Includes Republic of Korea, Taiwan, Hong Kong and Singapore d Does not include items without geographical allocation
a b

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Yearbook on the Internationalization of Spanish Companies 2012

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 payments slowed down (2.5%). Revenue from tourism gained 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 reflects, above all, higher external funding costs. By kinds of investment, the deterioration in the balance was broadbased. It is worth highlighting the increase in the portfolio investment income deficit (21.1%) and, in particular, the deficit in net interest payments

generated by bonds and debentures and money market instruments. The income deficit associated with other investment (loans, deposits and repos) likewise increased, and direct investment income surplus moderated, due to the greater fall, in absolute terms, in dividends received than in payments under this heading. The current transfers deficit fell in 2011 by 18.9%, to 0.6% of GDP, owing to a significant rise in revenue (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 logical reduction in the number of migrant arrivals explain this reduction. As usual, remittance payments are notably concentrated in Latin American destinations (Table 1.11).

Table 1.11
Main destination countries. Percentage of total

Geographical breakdown of remittance payments in 2010 and 2011 a
Source: Bank of Spain

2010 Colombia Ecuador Bolivia Romania Dominican Rep. Paraguay 17,9 12,8 8,5 5,3 4,0 4,5

2011 17,7 12,9 8,3 5,0 4,8 4,1 Morocco China Peru Brazil Pakistan Philippines

2010 4,1 3,5 3,6 3,5 1,7 1,4

2011 4,0 3,5 3,2 3,2 1,6 1,6

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.

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2012 Yearbook on the Internationalization of Spanish Companies

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 million 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 million 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 euros. This variation indirectly reflects the high level of funds raised by credit institutions in the liquidity auctions 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 geared 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). According to data from the UNCTAD, Spain was a net investor in FDI terms in an amount of 7,780 million dollars.

During the course of 2011, Spain’s foreign direct investment abroad moderated as well as, and in particular, 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 capital of Spanish companies, explains why the stock value 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 channelled 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 propertyrelated activities; professional, scientific, technical and administrative activities along with auxilary services; as well as in the manufacturing industry, financial activity and in transport and communications.

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Yearbook on the Internationalization of Spanish Companies 2012

Table 1.12
Millions of euros

Foreign Direct Investment transactions in 2010 and 2011 Breakdown by sector of economic activity
Source: Bank of Spain

Spain’s Direct Investment abroad 2010 Total Agriculture, farming, forestry and fishing Mining industries Manufacturing industry Production and distribution of electric power, gas, steam and air-conditioning, water, sewerage, waste management and decontamination Construction Retail and wholesale trade, motor vehicle and motorcycle repairs Transport and storage; information and communications Hotel and catering Financial and insurance activities Of which: CHFS * Property activities; professional, scientific, technical, administrative activities and auxiliary services Other services Unclassified Buildings Other * CHFS: Companies Holding Foreign Securities 28,949 . 891 11,140 -2,734 . 369 12,184 199 1,058 -1.820 3,106 520 2,232 825 1,407 2011 25,472 145 2,092 -5,719 2,771 105 1,903 4,832 257 13,218 -1,067 4,137 -177 1,909 613 1,296 % of total FDI 2011 . 0.57 8.21 -22.45 10.88 0.41 7.47 18.97 1.01 51.89 -4.19 16.24 -0.69 7.49 2.41 5.09

Foreign Direct Investment in Spain 2010 30,776 -80 -384 14,106 2,887 3,020 -3,050 1,261 115 4,466 882 5,815 375 2,246 3,744 -1,498 2011 19,044 . 1,276 2,275 328 603 -1.482 2,355 98 2,758 -967 3,643 111 7,040 4,748 2,292 % of total FDI 2011 . . 6.70 11.95 1.72 3.17 -7.78 12.37 0.51 14.48 -5.08 19.13 0.58 36.97 24.93 12.04

By geographical areas (Table 1.13), the euro area carried 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 investment 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).

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2012 Yearbook on the Internationalization of Spanish Companies

Foreign Direct Investment transactions in 2010 and 2011 a Breakdown by geographical area
Millions of euros

Table 1.13
Source: Bank of Spain

Spain’s Direct Investment abroad 2010 Total World total European Union 27 Euro area Germany France Netherlands Italy Luxembourg Portugal United Kingdom New EU members b Switzerland United States Latin America Argentina Brazil Chile Mexico Morocco Japan Australia OECD
a. b

Spain’s Direct Investment abroad 2010 CHFS -1,067 -1,611 -1,630 396 956 . . -2,849 . . . . . 122 148 . -173 . . . . -1,452 Total 30,776 22,263 19,300 3,588 -4,199 11,528 -6,953 9,893 -57 2,808 213 1,903 1,928 3,705 61 1,224 . 1,447 . 65 . 27,847 CHFS 882 -227 -262 147 -939 206 . 229 . -58 53 . 503 556 . 322 . . . . 356 Total 19,044 3,842 11,182 2,687 3,907 10,470 324 -1,404 925 -7,924 411 1,966 2,901 3,848 62 1,413 61 -169 . 87 . 8,897 46.72 0.46 2011 % of total FDI 2011 . 20.17 58.72 14.11 20.52 54.98 1.70 -7.37 4.86 -41.61 2.16 10.32 15.23 20.21 0.33 7.42 0.32 -0.89 CHFS -967 -1,917 -1,714 -146 -126 375 . -1,970 . -265 . 104 523 143 . 107 . . . . -1,123

2011 CHFS -1,820 Total 25,472 6,683 1,745 1,897 1,125 1,512 -617 -2,695 464 -362 5,105 84 2,135 8,727 -305 5,604 -66 1,556 99 . 269 16,738 1.06 65.71 % of total FDI 2011 . 26.24 6.85 7.45 4.42 5.94 -2.42 -10.58 1.82 -1.42 20.04 0.33 8.38 34.26 -1.20 22.00 -0.26 6.11 0.39

28,949 -4,295 -11,070 635 1,767 -20,950 -154 -4,501 330 6,956 -85 3,214 2,807 21,510 343 15,702 344 2,495 -568 . 540 7,144

-3,240 -3,361 . . . . -3,325 . 66 94 . 171 624 54 149 . 58 . . . -2,944

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

Transactions concerned with foreign direct investment 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 interests 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 financial activities and insurance branch. Significant acquisitions were also made in the areas of transport, storage and communications. The manufacturing industry, which accounted for a considerable proportion of Spain’s foreign investment in the period of economic expansion, recorded divestment in 2011.

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Yearbook on the Internationalization of Spanish Companies 2012

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 states, 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 destinations, 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 Position (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 contribution 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 increased in an amount of 10,010 million euros. In relation to investment instruments, all types of instrument experienced net outflows of funds, with the exception of financial derivatives. Outflows were particularly high in the case of portfolio and other investment (essentially, loans, deposits and repos), while, for foreign direct investment (FDI), net outflows of funds were moderate. Consequently, the debt balance on portfolio and other investment fell, and the positive 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), portfolio investment lost its relative weighting, both in terms of assets and liabilities, in favour of financial deriviatives. For their part, the share of other investment in foreign assets and the weighting of direct investment in liabilities increased.

Table 1.14
% of GDP

International investment position Breakdown by sector
Source: Bank of Spain

Monetary Authority Net 2006-2008 average 2009 2010 2011 7.2 4.2 2.9 -7.5 Assets 8.5 8.2 7.8 8.8 Liabilities 1.2 4.0 4.9 16.3 Net -39.1 -44.8 -43.9 -36.5

IFM Assets 44.3 47.8 44.8 49.1 Liabilities 83.4 92.6 88.7 85.6 Net -17.4 -25.8 -25.1 -23.2

AAPP Assets 3.3 2.8 2.7 3.1 Liabilities 20.7 28.6 27.7 26.3 Net -25.3 -27.4 -23.3 -25.0

OSR Assets 70.0 69.2 73.4 68.2 Liabilities 95.3 96.6 96.7 93.2

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2012 Yearbook on the Internationalization of Spanish Companies

International investment position Breakdown by instruments a
% of GDP Foreign Direct Investment Assets 2006-2008 average 2009 2010 2011
a

Table 1.15
Source: Bank of Spain Portfolio Investment Assets 34.0 29.8 24.6 19.9 Liabilities 48.3 46.8 42.9 39.7 Other investment Assets 29.7 29.4 29.3 30.9 Liabilities 29.4 30.5 32.1 32.4 Financial Derivatives Assets 5.0 6.2 7.5 10.8 Liabilities 3.5 3.4 4.1 6.1

Liabilities 18.8 19.2 20.9 21.8

31.3 34.6 38.6 38.4

Excluding Bank of Spain

D) Other indicators relating to the international presence 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 international 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. There 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 position 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 Mapfre (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 companies being Banco Santander (ranked 23rd), Telefónica (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 Spanish companies, with Sol Meliá ranked 15th. In Millward 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).

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2012 Yearbook on the Internationalization of Spanish Companies

2

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 economies, 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 activity 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 perspective the performance of Spanish companies in terms of their shareholder returns, their recommendations by equity market analysts and their presence in the international financial 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 companies, 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 inclined 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 international 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 services offered by Spanish companies may be influenced by an improvement in their image or the way they are perceived.

41

Yearbook on the Internationalization of Spanish Companies 2012

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 difficulties 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

Equity markets mediate between capital investors and listed companies. Shareholders are remunerated 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 companies in terms of the focus of their activity in other countries competing to obtain share capital. Accordingly, 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).

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 contributing share capital. To measure shareholder remuneration we have calculated an annual rate expressed as a percentage based on the following formula:

TRTA =

V + D + R + AutoC AC CBC 100 Vt 1

Where: A V is the increase in the total market value of company stock between the beginning 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,

42

2012 Yearbook on the Internationalization of Spanish Companies

CBC are revenues from the exercise of convertible bonds, and V-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 managers and stock market analysts consult this information and examine it in de- tail. 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.

In 2011, only 16 of the 129 listed companies obtained return rates of more than 10%. In the previous year, which was also poor for shareholders, there 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 Zinkia 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 manufacturing 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, Acciona, 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 recovery 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 (Tables 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 Ibex35 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 produced 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.

43

Yearbook on the Internationalization of Spanish Companies 2012

Table 2.1

Top 25 Spanish companies by total shareholder return rate in 2011a
Source: Datastream International through Wharton Research Data Services

COMPANY Zinkia Entertainment Grifols* Grupo Ferrovial* Acciona* Unipapel Bolsas y Mercados Españoles* Mapfre* Sotogrande Gas Natural* Testa Inmuebles en Renta Repsol YPF* Bankinter* Cie Automotive Inditex* Miquel y Costas Zardoya Otis Distribuidora Internacional de Alimentación Laboratorios Farmacéuticos Rovi FCC* Abertis* Pescanova Jazztel Urbar Ingenieros CVNE Renta 4
Notes:
* a

SECTOR Entertainment Biotechnology Construction Construction Household poducts Financial services Insurance Real-estate Gas Real-estate Oil and gas Banking Auto parts Fashion Paper Machinery Food trade Pharmaceutical Construction Transport services Fishing Telecommunications Machinery Alcoholic beveranges Financial services

RANKED
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

%
62.2 36.2 31.3 30.7 29.2 25.7 24.3 23.8 22.8 18.7 18.1 17.9 16.9 15.3 12.2 10 9.1 8.7 8.2 7.1 6.3 5.1 4.6 4.3 4.1

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

44

2012 Yearbook on the Internationalization of Spanish Companies

Top 10 IBEX 35 companies by total shareholder return rate
Companies and rates ranked by 2011 figures

Table 2.2

Source: Datastream International Through Wharton Research Data Services

1995 Company 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 b Average Grifols Grupo Ferrovial Acciona BME Mapfre Gas Natural Repsol YPF 53 -19.6 1.7 -15.4 36.2 7.6

2007 2011 b Average 7.6

-

-

-

-

-

-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

-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

27.4 68.4

18.8 60.9

3.9 5.3

-3.3 96.8

-27.9 -25.7

27.9 -14.3

-1.7 -2.5

21.1 -2

47.9 4.6

2.6 26

31.1 6.7

24.7 30.6

52.8 -9.7 36.3

-58.1 -16.8 -50.6

37.4 30.1 -3.4

-14 -24.7 -20

25.7 24.3 22.8 8.1 8.5 -1.8 -8.6

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 S&P 500 a FTSE 100 a IBEX 35 a Mercado Mundial a CAC 40 a

36.9 37.6 26 22.4

28.7 23 16.9 47.1

24.9 33.4 28.7 44.5

18.1 28.6 17.5 38.6

27.2 21 20.6 20.1

-4.8 -9.1 -8.2 -20.5

-5.4 -11.9 -14.1 -6.1

-15 -22.1 -22.2 -26.5

28.3 28.7 17.9 32.2

5.3 10.9 11.2 21.1

1.7 4.9 20.8 22

19 15.8 14.4 36

8.9 5.5 7.4 10.7

-31.9 -37 -28.3 -36.5

22.7 26.5 27.3 38.3

14.1 15.1 12.6 -12.9

8.4 2.1 -2.2 -7.7

9.5 8.1 7.1 9.8

2.4 -0.2 1.5 -4.8

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

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 b

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

45

Yearbook on the Internationalization of Spanish Companies 2012

Table 2.3
Companies and rates ranked by 1995-2011 average

Top 10 IBEX 35 companies by total shareholder return rate
Source: Datastream International through Wharton Research Data Services

Company

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1995 2011 b

2007 2011 b

Average Average ACS Red Eléctrica Abengoa OHL Indra Sistemas Acciona Enagas Telefónica Abertis Inditex 5.7 12.9 312.6 53 -28 7.7 70 10.6 7.5 13.5 -4.5 28.4 40.1 32.5 31.4 64.5 62.7 59.6 27.1 -2.6 36.1 -16 -14.9 12 11.3 6.1 -5.8 -31.3 -2.3 19.9 18.8 -7.8 3.5

-14.3

-10.4

63.8 242.9

68.4 95.2

0 -38.6

61.4 -28.5

-17.7 33.6

-17.6 -25.3

5.4 49.8

28.1 6.4

72.7 116.8

125.6 76.5

-12.7 -0.9

-50.8 -56.2

93.2 107.6

-18 22.1

-10 -13.2

16.4 16.4

-9.4 -0.9

-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 30.7 0.6 -14.7 7.1 15.3

15.8

-8.9

-26.2 11.4 52.1 -

52.1 84.4 41.3 -

152.1 46.8 23.1 -

182.1 54 24.1 -

-19.2 104.3 -26.4 -

-29.7 -29 5.2 -

6.4 -11.1 30.6 -

-3 -41 4.9 5.7

26 52.6 46.6 20.4 -28.1

38.1 46 22.7 45.6 36.9

48 32.3 -1.2 40.8 29.3

52 13.9 31.2 13.4 50.7

55.8 16 41.7 4.8 4.6

-58.2 -20 -25.4 -38 -23.3

6.2 4.5 29.3 35.8 41.9

-40.3 1.3 -7.7 -6.8 31.5

14.4 14.2 13.7 13.5 13.4

-11.6 -0.3 1.5 -2.5 11.6

IBEX 35 a DJIA a S&P 500 a FTSE 100 a Mercado Mundial a DAX 30 a CAC 40 a

22.4 36.9 37.6 26 16.8 7

47.1 28.7 23 16.9 13.1 28.2

44.5 24.9 33.4 28.7 13.4 47.1

38.6 18.1 28.6 17.5 21.7 17.7

20.1 27.2 21 20.6 32.5 39.1

-20.5 -4.8 -9.1 -8.2 -15.3 -7.5

-6.1 -5.4 -11.9 -14.1 -16.2 -19.8

-26.5 -15 -22.1 -22.2 -16.8 -43.9

32.2 28.3 28.7 17.9 37.8 37.1

21.1 5.3 10.9 11.2 17.9 7.3

22 1.7 4.9 20.8 13.6 27.1

36 19 15.8 14.4 23.8 22

10.7 8.9 5.5 7.4 15.1 22.3

-36.5 -31.9 -37 -28.3 -43.3 -40.4

38.3 22.7 26.5 27.3 39.1 23.8

-12.9 14.1 15.1 12.6 15 16.1

-7.7 8.4 2.1 -2.2 -9.5 -14.7 -13.4

9.8 9.5 8.1 7.1 6.8 6.2

-4.8 2.4 -0.2 1.5 -1.1 -2.2

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

6.2

-7.1

Notes:

a b

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

46

2012 Yearbook on the Internationalization of Spanish Companies

Top 10 IBEX 35 companies by total shareholder return rate
Companies and rates ranked by 1995-2011 average

Table 2.4

Source: Datastream International through Wharton Research Data Services

Company

2007 4.6 53 36.1 -4.9 52.3 41.7 16 -0.9 52.8 -33.4

2008 -23.3 -19.6 -14.9 -35.9 -57.2 -25.4 -20 -56.2 -58.1 -19.8

2009 41.9 1.7 11.3 33.8 127.8 29.3 4.5 107.6 37.4 59.6

2010 31.5 -15.4 -5.8 13.6 21.9 -7.7 1.3 22.1 -14 13.2

2011 15.3 36.2 -2.3 18.1 -39.9 -14.7 0.6 -13.2 25.7 -5

1995 2011 b Average

2007 2011 b Average

Inditex Grifols Red Eléctrica Repsol YPF Técnicas Reunidas Telefónica Enagas OHL BME Ebro Foods DJIA a FTSE 100 a S&P 500 a Mercado Mundial a DAX 30 a IBEX 35 a CAC 40 a
Notes:
a b

13.4 7.6 18.8 10.1 1.7 13.7 14.2 16.4 8.1

11.6 7.6 3.5 1.8 1.7 1.5 -0.3 -0.9 -1.7

8.9 7.4 5.5 15.1 22.3 10.7 4.2

-31.9 -28.3 -37 -43.3 -40.4 -36.5 -40.3

22.7 27.3 26.5 39.1 23.8 38.3 27.6

14.1 12.6 15.1 15 16.1 -12.9 0.6

8.4 -2.2 2.1 -9.5 -14.7 -7.7 -13.4

9.5 7.1 8.1 6.8 6.2 9.8 6.2

2.4 1.5 -0.2 -1.1 -2.2 -4.8 -7.1

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

While the general rankings offer interesting results for all branches of the economy, from an analytic standpoint it is worth looking at the shareholder returns on a sector-by-sector basis. This is because investors 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).

47

Yearbook on the Internationalization of Spanish Companies 2012

Table 2.5

Top Spanish companies by total shareholder return rate in 2010, relative to companies in the same sector in Euro area
Source: Datastream International through Wharton Research Data Services

Company Zinkia Entertainment Grupo Ferrovial Acciona Bolsas y Mercados Españoles Bankinter Miquel y Costas Grifols Gas Natural Mapfre Pescanova

Sector Entertainment Construction Construction Financial services Banking Paper Biotechnology Gas Insurance Fishing

Outright Position 1 3 4 6 12 15 2 9 7 21 % 62.2 31.3 30.7 25.7 17.9 12.2 36.2 22.8 24.3 6.3

Standardized rate Position 1 2 3 4 5 6 7 8 9 10 euro area 2.83 2.03 2.01 1.9 1.85 1.81 1.74 1.72 1.69 1.67

Standardized rate Position 1 3 4 2 12 15 44 36 5 34 World 2.4 1.5 1.48 1.94 0.83 0.7 0.04 0.22 1.4 0.25

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 reached 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 improvement compared to the euro area is only a small consolation, 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 companies 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 Internacional 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 relative 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 compared to their peers in the euro area than compared 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 markets as a whole.

48

2012 Yearbook on the Internationalization of Spanish Companies

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 counterparts in the euro area (Table A5). It should be remembered 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 shareholder 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 shareholder returns, although there was an increase in the number of listed Spanish companies with shareholder returns higher than the average of their counterparts in the euro area, approaching the peak recorded in 2006.

Investment bank analysts and Spanish companies
While in 2010 the recommendations issued by investment 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 crisis. 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).

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 recommendations 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 system, 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 United States aimed at preventing conflicts of interest and financial scandals obliged stock market analysts to provide more information regarding their recommendations 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.

49

Yearbook on the Internationalization of Spanish Companies 2012

Table 2.6
Vertical percentages

1998 F “Strong buy” “Buy” “Hold” “Underperform” “Sell” Total IBEX 35 Number
F First L Last 22.4 27.6 34.1 10.8 5.1 100 352

1999 L
18.2 29.5 36.9 9.7 5.7 100 352

2000 L
27 33

2001 L
23.4 38.3 29.2 7.4 1.7 100 418

2002 L
20.4 32.6 34.2 11.3 1.5 100 476

2003 L F
14.9 30.8 34.5 13.7 6 100 562

2004 L
17.8 23.5 39.3 14.1 5.3 100 562

F
23.7 32.1 31.4 9.5 3.3 100 452

F
22.6 39.7 28.6 7.7 1.4 100 416

F
18.9 34.5 33 12.2 1.5 100 476

F
16.3 34.4 34.4 11.9 3 100 596

F
15.3 27.4 32.8 17.8 6.7 100 646

L
16.7 24.1 34.6 19 5.6 100 647

17.1 29.9 36.1 13.9 3 100 596

28.8 8.8 2.4 100 452

Analysts’ recommendations follow discernible patterns by sector and listed company, since the crisis has had different effects. During 2010, there was an increase in the number of recommendations issued on Ibex-35 companies (to 683) compared to 2010, which is usually interpreted as being positive. Table 2.6 shows the figures for the 19982011 period, considering the first and last recommendation issued each year for each listed company. As in previous years, companies with the largest market 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 recommendations issued by investment banks on Ibex-35 securities 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 recommendations of 2011, the tone of negative recommendations was more modest, as the number of “underperforms” 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’ recommendations shows several ups and downs. This is because investment banks react to both the macroeconomic, financial and competitive situation and to the specific trends of each sector and company, making their recommendations vary substantially. After some ups and downs between 1997 and 2001, 2002 saw a deterioration in recommendations due to the crisis in Argentina and its repercussions elsewhere in Latin

50

2012 Yearbook on the Internationalization of Spanish Companies

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

2005 F “Strong buy” “Buy” “Hold” “Underperform” “Sell” Total IBEX 35 Number
14.1 26.2 32.3 18.2 9.2 100 595

2006 L F
17.7 26.4 33.2 15.2 7.5 100 572

2007 L
17.3

2008 L F
17.5 28.5 26.8 20 7.1 100 634

2009 L F
15.8 23.2 31.2 19.6 10.1 100 525

2010 L F
18.7 28.5 33.3 12.5 7 100 568

2011 L
17.6 29.9 34 11.8 6.7 100 568

F
16.6 23.9 33.6 19.3 6.7 100 586

F
18.3 27.4 31.5 15.2 7.6 100 683

L
19 24.5 32.4 17.6 6.6 100 683

16.3 21.5 32 23.3 6.9 100 596

18.6 26.3 32.8 17.1 5.3 100 586

22.1 22.7 25.6 22.6 7.1 100 634

21.1 21.3 29 20.8 7.8 100 525

18.7 35 20.3 8.7 100 572

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 preventing conflicts of interest between investment banks and financial intermediaries. The figures were calculated based on companies listed in the IBEX 35 in each year

America, a region in which more than half of Ibex-35 companies held major investments. From 2003 onwards, 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 instead 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 recommendations obtained by Spanish companies with those obtained by companies in the same sector in the same monetary region. Table 2.7 also shows the standardized 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 recommendation (“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, negative, since it will always be lower than the average. The ten companies with the best average standardized recommendation by sector in the euro area during 2011 were Lets Gowex (repeating its number one position obtained in 2010), Grupo San José, Grupo Nostrum, 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 these 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 welcome, especially against a backdrop of crisis. However, it is worth taking into account that, except

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Yearbook on the Internationalization of Spanish Companies 2012

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 companies 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 recommendations in comparison with their euro area peers than with their peers in the world overall. 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, Secuoya, Zinkia Entertainment, AB Biotics, Medcom Tech and Amadeus). In 2010, 74 listed companies obtained a better score in the euro area, which indicates that

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

Average recommendation 1=best; 5=worst

Number of recommendations Company Outright 1 2 1 1 1 3 4 1 1 11 Estandardized Euro area -1.01 -0.75 -0.77 -0.77 -0.77 -0.56 -0.47 -0.68 -0.68 0.25 Estandardized World -0.9 -0.65 -0.86 -0.86 -0.86 -0.52 -0.28 -0.81 -0.81 0.62 Outright 1 1 1 1 1 1.33 1.25 1 1 1.45

Average recommendation Estandardized Euro area -1.71 -1.57 -1.39 -1.39 -1.39 -1.35 -1.22 -1.21 -1.21 -1.03 Estandardized World -1.73 -1.48 -1.63 -1.63 -1.63 -1.14 -1.09 -1.49 -1.49 -0.88

Lets Gowex Grupo San José Grupo Nostrum Secuoya Zinkia Entertainment Grupo Tavex Unipapel AB Biotics Medcom Tech CAF

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

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2012 Yearbook on the Internationalization of Spanish Companies

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 since 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 companies in their sector worldwide, below the 39% of 2010 and the 42% of 2008. Therefore, 2011 ended with a deterioration in average recommendations adjusted by sector compared to 2010.

Visibility of Spanish Companies in the international financial press
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 companies were tainted by the crisis, although a significant proportion reported their successes in certain emerging markets. The quantity and quality of media coverage are pivotal variables since investors, analysts, directors and politicians 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 decision-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 financial press. Box 2.3 describes the methodology used to gauge the presence of Spanish companies in the four leading printed media.

2.3

Methodology for compling references to Spanish companies in the international financial press
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 publications 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.

Box 2.3

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Yearbook on the Internationalization of Spanish Companies 2012

The coverage of Spanish companies in the international 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 historic 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 Spanish companies relative to the total of article published 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 received 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 Telefónica, 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 financial media depends on their size and international projection. The most strategic sectors of the economy - such as banking or energy - also attract more attention. Lastly, the international financial press tends to reflect offensive and defensive merger and acquisition movements. In 2011 The Financial Times was the medium that mentioned Spanish companies the most often, data that confirms the trend since the 1990s (see Graph 2.3). This medium mentioned Spanish companies 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 figure 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 Times. 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 international financial press devotes more attention to Spanish companies than warranted by the scale of the Spanish economy.

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2012 Yearbook on the Internationalization of Spanish Companies

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

Chart 2.1
Source: Factiva

4500

Number of mentions Per 100,000 articles published

4000

3500

3000

2500

2000

1500

1000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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

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Yearbook on the Internationalization of Spanish Companies 2012

Table 2.8

Top 25 Spanish companies by references in the international financial press, 1995-2011
Source: Factiva
Outright 1995 2011 7747 6369 4362 2750 2546 1659 1554 1171 1170 931 782 760 669 609 Relativea 1995 2011 1715 6359 966 6057 1210 3868 3423 1550 3220 443 2605 168 148 1341

Company Santanderb Telefónica BBVA
c

1995 136 177 142 64 106 94 23 2 3 14 50 29 78 7

1996 264 400 288 148 251 117 43 4 0 45 41 55 48 21

1997 414 538 273 381 185 131 45 1 14 31 56 70 62 35

1998 405 362 242 175 65 83 56 6 7 19 41 48 34 34

1999 378 382 201 182 160 90 33 15 14 14 20 47 21 23

2000 2001 347 1114 389 207 193 67 145 11 17 54 15 70 8 94 191 413 207 147 124 125 110 8 54 14 21 9 1 46

2002 295 360 291 112 162 77 48 7 39 37 35 25 53 63

2003 186 262 227 84 99 65 83 31 60 69 55 32 27 36

2004 520 256 195 92 130 118 32 40 73 34 32 36 55 16

2005 349 343 399 174 172 81 58 24 110 120 28 39 24 56

2006 261 346 202 482 181 58 158 380 92 237 21 40 30 55

2007 532 361 139 298 117 92 148 155 116 113 9 45 29 28

2008 664 245 147 78 147 120 233 222 102 59 57 55 36 59

2009 616 245 206 68 111 75 106 120 131 28 83 21 47 24

2010 854 275 386 34 105 90 104 76 103 26 37 58 58 6

2011 1335 290 428 24 238 176 129 69 235 17 181 81 58 6

Endesa Repsol-YPF Iberia Iberdrola Ferrovial Inditex Gas Natural Real Madrid La Caixa Banesto Unión Fenosa Banco Popular Español Altadisd Acciona Caja Madrid Telefónica Móviles ACS Sacyr Vallehermoso Abertis Prisa Bankinter Banco Sabadell Outright total Relative Totale

9 0 0 2 0 0 0 0 2 9 1 1109 1131

30 0 0 3 0 0 0 0 16 12 7 2054 1405

43 0 0 14 6 1 0 0 36 13 1 2666 1547

30 0 8 19 1 1 0 0 9 8 6 1889 1761

27 12 7 25 3 0 0 0 16 15 0 1865 1758

41 39 9 19 101 1 0 0 24 24 30

12 10 7 12 81 8 3 0 8 8 7

45 24 2 12 57 12 4 0 22 7 5 2044 1948

30 50 12 21 45 13 12 1 5 12 20 1801 1573

31 30 10 29 45 7 6 17 6 4 9 2091 1867

22 47 18 26 34 18 21 28 22 8 21 2552 2410

10 40 72 21 21 56 52 144 8 13 11 3304 3153

19 186 183 59 3 31 98 58 12 19 14 3239 3257

44 39 52 42 1 63 93 44 28 14 21 3117 2899

30 31 47 30 2 22 19 9 39 16 24 2453 2554

73 7 24 38 0 72 23 28 35 41 42 2843 2761

65 12 7 73 0 70 30 26 22 70 43 4325 3956

561 527 458 445 400 375 361 355 310 293 262 42497 2232

124 2192 606 99 399 497 478 8148 310 65 58 -----

3304 1841 2956 1757

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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2012 Yearbook on the Internationalization of Spanish Companies

Top 5 Spanish companies by references in the international financial press, 1995-2011

Chart 2.2
Source: Factiva

Telefónica 1600 1400 1200 1000 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: The media included in the analysis are Financial Times, Wall Street Journal, Wall Street Journal Europe and The Economist

Santander BBVA Endesa Repsol

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Yearbook on the Internationalization of Spanish Companies 2012

Table 2.9

Top 25 Spanish companies by references in the international financial press in 20101, by publication
Source: Factiva

Comapny Santander BBVA Telefónica Repsol-YPF Inditex Real Madrid Iberia Bankia Iberdrola La Caixa Caja Madrid ACS Bankinter Caja Ahorros del Mediterráneo Ferrovial Banco Popular Español Banesto Fútbol Club Barcelona Banco Sabadell Banca Cívica Sacyr Vallehermoso Gamesa Abertis Endesa Prisa Total Spanish companies Total for every 100,000 articlesa

Total 1335 428 290 238 235 181 176 132 129 81 73 70 70 70 69 65 58 47 43 68 30 29 26 24 22 4,325 3,956

FT 866 231 191 142 82 52 98 65 78 52 48 38 41 24 46 39 24 4 19 38 21 20 17 17 10 2,459 4,460

WSJ 333 142 65 65 106 63 48 46 35 16 15 20 21 26 16 19 22 17 16 18 5 6 6 5 8 1,236 3,680

WSJE 125 49 30 30 44 58 25 19 15 10 9 11 6 20 7 7 12 23 8 11 4 2 3 2 4 572 3,628

The Economist 11 6 4 1 3 8 5 2 1 3 1 1 2 0 0 0 0 3 0 1 0 1 0 0 0 58 1,197

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

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2012 Yearbook on the Internationalization of Spanish Companies

Number of references to Spanish companies in articles published in the international financial press, by publication, 1995-2011

Chart 2.3
Source: Factiva

2.500

2.000

FT WSJ WSJE Economist

1.500

1.000

500

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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Yearbook on the Internationalization of Spanish Companies 2012

2.4
2011 was generally a continuation of the negative results inherited from 2010 from the standpoint of shareholder 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 result. 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’ recommendations have also been negative. The only glimmer of hope came from the most internationalized companies and those that sell products or services with some technological contents, these companies performing better. Perhaps these trends can be used to guide the actions of the Spanish business world regarding external markets and the application of knowledge. It is also worth noting that 41% of listed Spanish companies have seen an improvement in their recommendations by analysts compared to their competitors in the same sector in the euro area, although in the worldwide economy it was only 33%.

Conclusion
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 crisis and the problems of many large financial and nonfinancial 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 returns, the international investment community has growing doubts about the short-term future of Spanish 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 technology and knowledge. These could be the two pillars of the recovery, provided that we manage to overcome our most immediate financial challenges.

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2012 Yearbook on the Internationalization of Spanish Companies

3

Special Mentions for the Internationalization of 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 internationalization during recent years. In the judgement of the members of the Círculo, the three companies 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 innovation; 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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Yearbook on the Internationalization of Spanish Companies 2012

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

Major Companies with a Significant Track Record of Internationalization 3.1.1 BANCO SANTANDER
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 diversification is the appropriate balance between mature 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 establishment of its first representative office in Havana, which was followed by others in Argentina, Mexico and Venezuela, as well as an office in London. In the years that followed, Banco Santander went on to purchase Banco del Hogar Argentino, its first partner in Latin America, and also established Banco Intercontinental Español (Bankinter). Subsequently, the company continued its purchases in Puerto Rico and Chile, and intensified its expansion in Latin America (Argentina, Brazil, Colombia, 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 acquisitions in Germany and Portugal, and a strategic partnership with the Royal Bank of Scotland. In 2003, the group established Santander Consumer, 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 reached an agreement to take a 19.8% stake in Sovereign 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, Santander 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 acquisition 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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2012 Yearbook on the Internationalization of Spanish Companies

3.1.2 IBERDROLA
International expansion is one of the major keys to explaining Iberdrola’s growth in the past decade. It has become one of the five biggest electricity companies in the world, with a presence in 40 countries and all five continents. Iberdrola’s growth and diversification have enabled it to become one of the leading utility companies in the world, with a significant presence in the most attractive markets. The main areas in which Iberdrola 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 passed a number of milestones in order to become a major multinational group. From the establishment of Hidroeléctrica Ibérica in 1901, and the subsequent 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, recognition and innovation. With the incorporation of ScottishPower 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 major 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 sector, 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 incorporation of ScottishPower and Energy East. In 2011, Iberdrola entered a new phase of international growth with the purchase of the Brazilian company Elektro for 2,400 million dollars.

3.1.3 OHL
The product of the 1999 merger between Obrascón, 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 proceed 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 concession company in the world (according to PWF’s 2011 rankings). It occupies the twenty-first position among the 225 major international contractors (according to Engineering News-Record’s 2011 rankings), and is the world leader in hospital construction and the leading private investor in infrastructure 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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Yearbook on the Internationalization of Spanish Companies 2012

• 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 Istanbul (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 highspeed 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 companies. OHL will receive 585 million euros for its work on this project • Through its Czech subsidiary OHL ŽS, the company has been awarded the contract for the Ural Polar project in Russia, which consists of the construction of a 390 km-long railway line and has a total budget of 80,000 million roubles (approximately 1,950 million euros) including VAT. This amount makes this the biggest building project in OHL’s history.

3.2

Internationalization Operations in 2011

3.2.1 THE MEDINA–MECCA RAILWAY LINE

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 highspeed railway line outside Spain. In terms of its value, as well as the expectations it has created for other Spanish companies to obtain future contracts 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, Inabensa and Talgo. These companies make up 88% of

the consortium, with the remainder being constituted 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, electrification, and the control and operations centre. The trains will be manufactured by Talgo (35 highspeed trains, each with the capacity to carry 450 passengers, and the possibility of supplying a further 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 government 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 design and construction of the line, the design and installation of the electromechanical systems (the

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2012 Yearbook on the Internationalization of Spanish Companies

electricity supply, overhead power cables, telecommunications and ticketing), the supply of rolling 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 potential daily demand of around 166,000 passengers, with volumes of between 11,000 and 13,000 passengers at peak times.

3.2.2 GESTAMP AUTOMOCIÓN
Gestamp Automoción is an international group which supplies the main vehicle manufacturers. Its industrial activity is focussed on three lines of business: 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 authorities, the company had to absorb ThyssenKrupp Metal Forming and consolidate its late-2009 purchase of Edscha. This operation required 300 million euros in financing, 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 turnover in the chassis business of 300 million euros to more than 800 million in 2012. This figure represents 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 operations, the group now has more than 23,000 employees 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 components. However, the company’s exposure to this country is only 5% thanks to its high volume of exports. The company is especially strong in Russia and is advancing in China, India and Brazil.

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Yearbook on the Internationalization of Spanish Companies 2012

3.3 Medium-sized Companies with a Significant Track Record of Internationalization 3.3.1 FLUIDRA

Fluidra is a multinational group with its headquarters 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 distributed 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 Spanish market. The group’s ethos is based on the rational use of and respect for water. Fluidra has four business units which create, produce and distribute components and accessories for the swimming pool and wellness sectors, water treatment, and the control, piping and applied distribution 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 Aquatron Robotic Systems Ltd. The company made a down payment in U.S. dollars equivalent to 31.9 million euros.

Aqua Products and Aquatron develop, manufacture and distribute electronic bottom cleaners for private and public swimming pools. Both have their headquarters in the United States. The consolidated 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 Products and Aquatron group is present in 40 countries and has a turnover of 33 million euros. It specialises 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 importance 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 incorporated a company with cutting-edge technology and capacity to innovate into its structure, and is transforming 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, manufacturing 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 industry. In addition, it provides key raw materials for nitro-chemical activity, both to meet its own internal needs as well as for sale to third parties. Lastly, Maxam offers its customers a serious of securityrelated 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 companies across the five continents, with 6,000 employees 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 Explosives), the global leader in the manufacture of cartridges and ammunition for recreational hunting and sporting use (Maxam Outdoors), the largest Spanish group in the defence sector (Maxam Defence), a powerful producer of chemical raw materials (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 called 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 international 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 deriving 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 maintained 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 coming 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, uranium 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 exports 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, Brazil and Russia. In 2011 the companies which make up the TUBACEX group had a work-force of 1,875 people (40% of which are based overseas). The oil, petrochemical, 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 Edelstahlrohr 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 pressure, 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 value, 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 equipment located on the seabed, as well as to inject fluids or corrosion inhibitors. This product is extremely 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 generation 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 total 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 manufacture of high added-value pipes with small diameters, which complement Tubacex’s catalogue.

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3.3.4 PRIVALIA

In June 2006, with a team of only five people, Lucas Carné and José Manuel Villanueva founded an Internet-based private sales club dealing in topbrand fashion. In its first year the company had a turnover of 400,000 euros. Six years later, Privalia 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 proceeds from overseas and Brazil, which is the country 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 impetus of a model which enables brands to cash in and customers to buy at discount prices, while at the same time “always protecting the image 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 Atlantic, Highland Capital Partners, Index Ventures and Insight Venture Partners. Dress for Less’s managing partners, Mirco Schultis and Holger Hengstler, went on to become significant shareholders in Privalia. Founded in 1999, Dress for Less runs a distribution 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 fashion at full price. Moreover, Privalia has defied the recession, opening new businesses such as Privalia Travel, the group’s travel agency division.

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3.4

Foreign Investment in Spain

3.4.1 FORD
Ford is set to invest 812 million euros in its Almussafes production plant in Valencia, which has been awarded the contract to manufacture the new generation 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 future 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.

3.4.2 HUTCHISON WHAMPOA
This Chinese group conducts business in a range of sectors, from operating the world’s major ports, retail distribution, property and infrastructure development, 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 Terminal Catalunya (Tercat), which is the company that holds the concession to build and operate the container terminal at Muelle Prat in the port of Barcelona. 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 hectares. The terminal will enable the port to reach a capacity of five million containers in 2012, compared to its current capacity of almost two million.

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4

The New Latin Argonauts: Could they help in the internationalization of Spain?
Javier Santiso Professor in Economics, ESADE Business School Director, ESADEgeo Center for Global Economy and Geopolitics Founder of Start Up 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 movement of people, ideas and capital. Does Latin America have similar potential which could equally be mobilised in order to encourage 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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4.1

The Latin American diaspora

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 technology 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 innovation 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 executive 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 Argentinian, Victor Agnellini is one of the Senior Vice Presidents 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 Services. This is in addition to all those Latin Americans in the international arena holding important management positions. The most noteworthy is the Brazilian, Eduardo Navarro, Telefónica’s General Manager for Strategy, who joined the board of directors of the multinational in September 2012. In the Luxembourgbased 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 United 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 Rodríguez, 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 resources 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 manage Latin American divisions, for example the Mexican, 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, member of the executive committee of the Dallas-based multinational. Another senior executive of this company 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 multinational 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 these 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 startups together with Palo Alto, there are several technology 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 (cofounder of DataXu). In Austin, there is Roy Sosa and

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his brother at the helm of MPower Ventures, the technology 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 continent, or Allus, based in Colombia. In Silicon Valley, initiatives such as Traweln were also set up, bringing together entrepreneurs and investments in technology 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 Silicon 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 mineral for the manufacture of technology components, found in abundance in Argentina, Chile and especially 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 Wenceslao 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 consulting firm, founded and developed by Latin Americans (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 Argentinian, 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 region 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 systematise 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 government, launched ChileGlobal, an initiative inspired by GlobalScots in Scotland (globalscot.com), which seeks to forge ties with the Chilean diaspora of entrepreneurs and investors in technology sectors. In Mexico, 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 Guillén 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 international 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 covering 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 technology 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 multinational, Vivendi). In Uruguay: Lynkos e Infocorp 4. From the social games of the Brazilian Mentez to the Argentinian 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 comparison 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 based in Spain, could help forge links with their countries of origin, particularly Brazilian companies (in the case of Eduardo Navarro and other Brazilian executives in Spain), Argentinian (such as Guillermo Ansal-

do as previously mentioned, but also the Argentinian multi-entrepreneur Martin Varsavsky, founder of Jazztel and now of FON), Chileans (such as the CEO for Europe of the airline LATAM, based in Madrid), etc. Similarly, the Latin American diaspora, particularly those in European multinationals, could also make good ‘ambassadors’ to mobilise and encourage the location of headquarters for Latin America of these multinationals. 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 connected 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 symbolic 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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The Entrepreneur diaspora in Spain
In addition to the Latin American diaspora, Spain could mobilise its own diaspora, notably to foster entrepreneurship, 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 widely 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 development of technology companies in their country, fomenting closer ties between Mumbai and Palo Alto. Spain lacks this connection density: for example, there is no Spaniard present in Californian venture capital funds and there are only a handful of Californian startups, hardly any when compared with those of the Israeli or Indian diaspora, or even from other European countries such as England, France, Finland and Switzerland, 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 worse 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 Argonauts diaspora in the United States, nor is it significant in venture capital and technology start-ups. There are notable exceptions such as Inaki Berenguer, a Spaniard settled in New York who founded the startup, 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 employees of the social network Facebook and one of its top executives. However, beyond these notable examples, 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 successes 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 entrepreneurial culture. The founders of eDreams are all Stanford graduates who went on to work for several years in American technology firms. One of the creators 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 social 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 Lucas 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 success. 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 entrepreneur, creating in 2003 what would be Budgetplaces, 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

4.2

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and the Davos Economic Forum in its report on notable start-ups and entrepreneurs. These examples show, if this were necessary, that we should (re)consider the issue of brain drain when it comes to Spain. Brains come and go: if there are opportunities and facilities (or the brakes on entrepreneurship 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 survive 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 multinational 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 business school INSEAD). Today, the market capitalisation of these companies promoted by foreign entrepreneurs 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 Grove, 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 Sindhu, the creator of Juniper Networks, the main competitor 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 abundance, especially those from India, France, England, Iran and now China. Of the companies studied in the aforementioned analysis, the Indian diaspora has created the most (a total of 32, 22% of the total), ahead of Israel (17 companies, 12% of the total), Taiwan (16 companies) 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, Stanford 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 entrepreneurs. In fact, business schools are increasingly attracting 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 MÁSmovil), the Austrian Meinrad Spenger (founder of Busuu. com), the Belgian François Derbaix (serial entrepreneur, co-founder of Toprural), the German Michael Kleindl (another entrepreneur and investor), the Mexican Mauricio Prieto (co-founder of eDreams) and many more. We must also add the serial entrepreneurs 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, promote 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 Gómez) or the German Chris Pommerening, co-founded

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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 entrepreneurial talent in our country while at the same time attract foreign entrepreneurial talent. From the US to Chile to England, Start-Up Programmes are multiplying. 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 attractive 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
We have outlined a few ideas on how to mobilise diaspora for the internationalisation of the Spanish economy. We have placed special emphasis on two possible ways which could easily be put into operation: - Mobilise the Latin American diaspora, particularly those based in Spain and Europe, to encourage the location 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 capital ecosystem. Some of the most successful startups in Spain have been founded (in part) by foreigners, such as Odigeo (with a turnover today of almost 4,000m euros), Tuenti or BuyVip. There are others who could be added to this collective, particularly Spanish executives. I refer to the many who are on the executive committees of foreign multinationals based abroad. Multinationals such as Danone, Nestlé, Kodak, Juniper, Intel, Société Générale, Euro RSCG, Alcatel Lucent, Schneider, Essilor, Volkswagen, 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 ‘evangelization’ gatherings in the country to discuss entrepreneurs, start-ups, venture capital, always with an international dimension. If we wish to bring about change in the country – ‘reset’ Spain, if you will - with a new production model and a renewed international boost, we need to mobilise all the talent both within the country and outside its borders. These diaspora can play a key role. We must not forget them.

4.3

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5

Internationalization of the company

Pablo Isla Chairman and CEO of INDITEX

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 operates. 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, capitalizing 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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Yearbook on the Internationalization of Spanish Companies 2012

Admittedly, from the outset, Inditex was an organisation designed to grow and expand its activity, internationalization 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, invariably with the customer as the judge of all our actions. From its inception, the key component and driving force 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 Coruña, Vigo, Lugo, Santiago de Compostela, Ourense etc.) between 1975 and 1980. Establishments were gradually opened in more remote areas; firstly, in northwest 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 internationally. 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 respectively 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 international 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 regarded as strategic, especially the following three key elements: the product, logistics and the human component. 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 significant: 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 improvements in quality in the same proportion, owing to a number of factors. These include, notably, better purchasing 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 improved year on year. And finally, the customer, who is increasingly demanding in terms of the product. The growth in commercial activity has been accompanied 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 remain 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 figures, 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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challenges which arise on a daily basis, which is unavoidable 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, underpinned 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 become a beacon for human teams offering high added value and for research and development of advanced pioneering technology, and not forgetting the momentum 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 locations, dedicated to design, commercial activity as well as logistics, with an investment of EUR 450 million. On this basis, Inditex has upheld its growth philosophy, seeking to capitalize on opportunities for growth arising throughout the world. This is precisely one of

the Group’s most prominent hallmarks. Its global aspiration 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, beyond 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.

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6

Statistical Annex

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Yearbook on the Internationalization of Spanish Companies 2012

2012 Yearbook of the Internationalization of Spanish Companies

Total shareholder return rates in the IBEX 35
Companies and indices ordered in accordance with 2011 Company
Grifols Grupo Ferrovial Acciona BME Mapfre Gas Natural Repsol YPF Bankinter Inditex DJIA FCC Abertis Banco de Sabadell S&P 500 a CaixaBank Enagas FTSE 100 Red Eléctrica Banco Popular Ebro Foods BBVA IBEX 35 a Bankia Mercado Mundial a Abengoa Sacyr Vallehermoso OHL CAC 40 a Iberdrola Endesa DAX 30 a Telefónica Amadeus IT Holding Indra Sistemas Banco Santander Acerinox ACS Técnicas Reunidas Gamesa Mediaset Arcelor Mittal International Airlines Group
a a

Table A.1
Source: Datastream International via Wharton Research Data Services
2002 24.4 -3 21.1 -2 -22.2 -26.3 5.7 -15 -6.3 4.9 -4.9 -22.1 -22.2 -4.5 8.7 -9.4 -32.4 -26.5 -16.8 -17.6 45.6 -25.3 -31.9 -5.6 -34.2 -43.9 -41 -31.4 -28.2 -4 13.5 1.4 2003 17.8 26 47.9 4.6 25.1 41.8 -28.1 28.3 39.5 20.4 26.6 28.7 52.6 17.9 40.1 25.3 18.8 23.9 32.2 37.8 5.4 25.6 49.8 19.9 21.7 43 37.1 46.6 58.4 48.6 9.3 28.4 70 2004 43.8 38.1 2.6 26 26.5 23.6 36.9 5.3 24.9 45.6 12.8 10.9 46 1 1.2 31.4 5.7 19.9 22.9 21.1 17.9 28.1 6.1 6.4 1 1.4 23.5 17.8 7.3 22.7 25.3 0.3 28.9 32.5 21.1 2005 51 48 31.1 6.7 31.5 22.4 29.3 1.7 39.1 40.8 31.8 4.9 32.3 20.8 62.7 9.4 36.3 19.1 22 13.6 72.7 78.7 1 16.8 26.6 27.5 33 27.1 -1.2 35.3 26 6.3 64.5 22.7 45.1 2006 27.9 52 24.7 30.6 8.5 29.7 50.7 19 65.3 13.4 56.4 15.8 13.9 14.4 27.1 36.9 39.3 24.4 36 23.8 125.6 129.7 76.5 20.9 47.8 74.7 22 31.2 15.2 30.8 91 59.6 70.4 6.1 2007 53 -34.1 55.8 52.8 -9.7 36.3 -4.9 7.3 4.6 8.9 -31.9 4.8 -10.3 5.5 16 7.4 36.1 -12.6 -33.4 -5.3 10.7 15.1 -12.7 -40.1 -0.9 4.2 28.5 5.1 22.3 41.7 3.3 8.1 -25.7 -2.6 52.3 54.3 -14.8 69 2008 -19.6 -58 -58.2 -58.1 -16.8 -50.6 -35.9 -48.3 -23.3 -31.9 -52.5 -38 -31.7 -37 -43.5 -20 -28.3 -14.9 -45.6 -19.8 -45.7 -36.5 -43.3 -50.8 -73.4 -56.2 -40.3 -35.5 -18 -40.4 -25.4 -10.7 -48.7 -30.7 -16 -57.2 -59.9 -53.1 -66.9 2009 1.7 78.1 6.2 37.4 30.1 -3.4 33.8 26.1 41.9 22.7 32.8 35.8 -15.9 26.5 23.4 4.5 27.3 1 1.3 -9.7 59.6 54.9 38.3 39.1 93.2 25.6 107.6 27.6 8.4 13.4 23.8 29.3 5 84.6 31.7 12 127.8 -6.4 48.1 95.5 2010 -15.4 -4.1 -40.3 -14 -24.7 -20 13.6 -40 31.5 14.1 -29.8 -6.8 -20.6 15.1 27.9 1.3 12.6 -5.8 -22.3 13.2 -36.6 -12.9 15 -18 -40.3 22.1 0.6 -7.7 -16 16.1 -7.7 -19.1 -27.7 -6.9 6.1 21.9 -50.8 -9.2 -10.3 2011 36.2 31.3 30.7 25.7 24.3 22.8 18.1 17.9 15.3 8.4 8.2 7.1 2.7 2.1 1.9 0.6 -2.2 -2.3 -4 -5 -6.6 -7.7 -9 -9.5 -10 -12.3 -13.2 -13.4 -13.5 -14.5 -14.7 -14.7 -18.7 -19.9 -20.4 -21.9 -31.3 -39.9 -43.3 -44.3 -46.2 -49.8 8.1 8.5 10.1 7.7 13.4 9.5 7 13.5 1.6 8.1 -2.4 14.2 7.1 18.8 5.9 8.1 10.3 9.8 -9 6.8 16.4 2.2 16.4 6.2 12.4 9.3 6.2 13.7 -18.7 15.8 9.5 8.6 19.9 1.7 -7.5 -10.5 -12 -49.8 -1.8 -8.6 1.8 -13.1 1 1.6 2.4 -20.1 -2.5 -15.9 -0.2 -2.4 -0.3 1.5 3.5 -20.3 -1.7 -13.9 -4.8 -9 -1.1 -9.4 -36.3 -0.9 -7.1 -6.4 -6.8 -2.2 1.5 -18.7 -8.9 -10 -13.2 -7.8 1.7 -30.5 -21.4 -12 -49.8

1995 -26.2 27.4 68.4 14.6 12.2 36.9 -27.2 52.1 37.6 26 48.4 -10.7 39.2 22.4 16.8 0.4 -14.3 2.8 44.2 30.9 7 1 1.4 -54.7 25.9 0.2 5.7 -

1996 52.1 18.8 60.9 29.1 75.9 28.7 31.4 41.3 23 16.9 17.6 83.2 65.5 47.1 13.1 27.1 -10.4 27.6 72.6 37 28.2 84.4 14.4 41.4 57.3 12.9 -

1997 152.1 3.9 5.3 33.5 31.5 24.9 93.3 23.1 33.4 28.7 71.6 18.9 1 14.6 44.5 13.4 63.8 68 242.9 33 12.2 19.3 47.1 46.8 445.6 88 22.4 312.6 -

1998 182.1 -3.3 96.8 18.8 22.7 18.1 82.7 24.1 28.6 17.5 2.5 18.1 36.4 38.6 21.7 68.4 31.4 95.2 34.1 35.7 41.6 17.7 54 121.5 14.2 -25.2 53 -

1999 -19.2 -27.9 -25.7 54.7 61.7 27.2 -36 -26.4 21 20.6 3 -22.1 7.5 20.1 32.5 0 -42.3 -38.6 54.1 -1 1.8 -1 1.2 39.1 104.3 40.8 34.1 103.3 -28 -

2000 -3.8 -29.7 27.9 -14.3 -24.8 -26.4 -4.8 1.2 5.2 -9.1 -8.2 70 17.8 -13.5 13.9 -20.5 -15.3 61.4 -4.8 -28.5 1 0 -5.6 -7.5 -29 8 3.3 -15.9 7.7 -

2001 46.8 6.4 -1.7 -2.5 -1.6 -7.9 -5.4 17.2 30.6 -1 1.9 -14.1 7.5 2 8.6 -10.6 -6.1 -16.2 -17.7 1 1.4 33.6 -20.3 13 -0.4 -19.8 -1 1.1 -4.8 -15.5 20.5 10.6 -39.8 -

1995 2011 b Average
7.6 1 1.2 14.4

2007 2011 b Average 7.6 -9.1 -1 1.6

Notes:

a b

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

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Yearbook on the Internationalization of Spanish Companies 2012

Table A.2
Companies and indices ordered in accordance with the 1995-2011 average

Total shareholder return rates in the IBEX 35
Source: Datastream International via Wharton Research Data Services
2007 1995 2011 b 2011 b Average Average 19.9 18.8 16.4 16.4 15.8 14.4 14.2 13.7 13.5 13.4 12.4 11.2 10.3 10.1 9.8 9.5 9.5 9.3 8.6 8.5 8.1 8.1 8.1 7.7 7.6 7.1 7 6.8 6.2 6.2 5.9 2.2 1.7 1.6 -2.4 -7.5 -9 -10.5 -12 -18.7 -49.8 -7.8 3.5 -9.4 -0.9 -8.9 -11.6 -0.3 1.5 -2.5 11.6 -6.4 -9.1 -13.9 1.8 -4.8 2.4 -10 -6.8 -13.2 -8.6 -1.8 -1.7 -0.2 -13.1 7.6 1.5 -20.1 -1.1 -2.2 -7.1 -20.3 -36.3 1.7 -15.9 -2.4 -30.5 -9 -21.4 -12 -18.7 -49.8

Company ACS Red Eléctrica Abengoa OHL Indra Sistemas Acciona Enagas Telefónica Abertis Inditex Iberdrola Grupo Ferrovial BBVA Repsol YPF IBEX 35 a DJIA a Banco Santander Endesa Acerinox Gas Natural Mapfre Ebro Foods S&P 500
a

1995 5.7 -14.3 -54.7 -26.2 11.4 52.1 44.2 39.2 14.6 22.4 36.9 25.9 30.9 0.2 68.4 27.4 -10.7 37.6 12.2 26 -27.2 16.8 7 2.8 48.4 0.4 -

1996 12.9 -

1997 312.6 63.8

1998 53 68.4

1999 -28 0 -38.6 40.8 -19.2 104.3 -26.4 -11.8 7.5 54.7 20.1 27.2 34.1 -11.2 103.3 -25.7 -27.9 -22.1 21 61.7 20.6 -36 32.5 39.1 54.1 3 -42.3 -

2000 7.7 70 61.4 -28.5 8 -29.7 -29 5.2 0 -3.8 13.9 -24.8 -20.5 -4.8 3.3 -5.6 -15.9 -14.3 27.9 -13.5 -9.1 -26.4

2001 10.6 7.5 -17.7 33.6 -4.8 6.4 -11.1 30.6 13 46.8 -10.6 -1.6 -6.1 -5.4 -15.5 -0.4 20.5 -2.5 -1.7 8.6 -11.9 -7.9 -

2002 13.5 -4.5 -17.6 -25.3 -31.4 -3

2003 28.4 40.1 5.4 49.8 58.4 26 52.6

2004 32.5 31.4 28.1 6.4 25.3 38.1 46 22.7 45.6 36.9 23.5 43.8 22.9 26.5 21.1 5.3 0.3 17.8 28.9 26 2.6 19.9 10.9 23.6 11.2 24.9 17.9 7.3 11.4 5.7 6.1 12.8 21.1 -

2005 64.5 62.7 72.7 116.8 35.3 48 32.3 -1.2 40.8 29.3 27.5 51 19.1 31.5 22 1.7 26 33 6.3 6.7 31.1 36.3 4.9 22.4 20.8 39.1 13.6 27.1 26.6 9.4 78.7 31.8 22.7 45.1

2006 59.6 27.1 125.6 76.5 15.2 52 13.9 31.2 13.4 50.7 47.8 27.9 24.4 8.5 36 19 30.8 74.7 91 30.6 24.7 39.3 15.8 29.7 14.4 65.3 23.8 22 20.9 36.9 129.7 56.4 70.4 6.1

2007 2008 -2.6 36.1 -12.7 -0.9 3.3 55.8 16 41.7 4.8 4.6 28.5 -34.1 -5.3 -4.9 10.7 8.9 8.1 5.1 -16 -14.9 -50.8 -56.2 -10.7 -58.2 -20 -25.4 -38 -23.3 -35.5 -58 -45.7 -35.9 -36.5 -31.9 -48.7 -18

2009 12 11.3 93.2 107.6 5 6.2 4.5 29.3 35.8 41.9 8.4 78.1 54.9 33.8 38.3 22.7 84.6 13.4 31.7 -3.4 30.1 59.6 26.5 26.1 1.7 27.3 32.8 39.1 23.8 27.6 -9.7 25.6 127.8 -15.9 37.4 23.4 -6.4 48.1 95.5 -

2010 6.1 -5.8 -18 22.1 -19.1 -40.3 1.3 -7.7 -6.8 31.5 -7.7 -4.1 -36.6 13.6 -12.9 14.1 -27.7 -16 -6.9 -20 -24.7 13.2 15.1 -40 -15.4 12.6 -29.8 15 16.1 0.6 -22.3 -40.3 21.9 -20.6 -14 27.9

2011 -31.3 -2.3 -10 -13.2 -19.9 30.7 0.6 -14.7 7.1 15.3 -13.5 31.3 -6.6 18.1 -7.7 8.4 -20.4 -14.5 -21.9 22.8 24.3 -5 2.1 17.9 36.2 -2.2 8.2 -9.5 -14.7 -13.4 -4 -12.3 -39.9 2.7 25.7 1.9

-10.4 242.9 95.2 14.4 52.1 84.4 41.3 72.6 65.5 29.1 47.1 28.7 41.4 37 57.3 60.9 18.8 83.2 23 75.9 16.9 31.4 13.1 28.2 27.6 17.6 27.1 445.6 121.5 152.1 182.1 46.8 23.1 12.2 114.6 33.5 44.5 24.9 88 19.3 22.4 5.3 3.9 18.9 33.4 31.5 28.7 93.3 13.4 47.1 33 71.6 68 54 24.1 35.7 36.4 18.8 38.6 18.1 14.2 41.6 -25.2 96.8 -3.3 18.1 28.6 22.7 17.5 82.7 21.7 17.7 34.1 2.5 31.4 -

-41 4.9 5.7 -5.6 24.4 -32.4 -22.2 -26.5 -15 -28.2 -34.2 -4 -2 21.1 -9.4 -22.1 -26.3 -22.2 -6.3 -16.8 -43.9 -31.9 8.7 45.6 -4.9 1.4 -

46.6 20.4 -28.1 21.7 17.8 23.9 25.1 32.2 28.3 48.6 43 9.3 4.6 47.9 18.8 28.7 41.8 17.9 39.5 37.8 37.1 19.9 25.3 25.6 26.6 70 -

-25.7 -30.7 36.3 -9.7 -33.4 5.5 7.3 53 7.4 -31.9 15.1 22.3 4.2 -12.6 -50.6 -16.8 -19.8 -37 -48.3 -19.6 -28.3 -52.5 -43.3 -40.4 -40.3 -45.6

Bankinter Grifols FTSE 100 a FCC Mercado Mundial a DAX 30
a

-8.2 1.2 -15.3 -7.5 1 17.8 -4.8 -

-14.1 17.2 -16.2 -19.8 -20.3 2 11.4 -39.8 -

CAC 40 a Banco Popular Sacyr Vallehermoso Técnicas Reunidas Banco de Sabadell BME CaixaBank Gamesa Bankia Mediaset Arcelor Mittal Amadeus IT Holding International Airlines Group

-40.1 -73.4 52.3 -10.3 52.8 -57.2 -31.7 -58.1 -43.5 54.3 -14.8 69 -59.9 -53.1 -66.9 -

-50.8 -43.3 -9.2 -10.3 -9 -44.3 -46.2 -18.7 -49.8

-

-

-

-

-

-

-

-

-

-

-

-

-

Notes:

a b

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

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2012 Yearbook on the Internationalization of Spanish Companies

Total shareholder return rate in the IBEX 35
Companies and indices ordered in accordance with the 2007-2011 average Company Inditex Grifols Red Eléctrica DJIA a Repsol YPF Técnicas Reunidas FTSE 100 S&P 500 Enagas OHL BME Mercado Mundial Ebro Foods Mapfre DAX 30 a CaixaBank Abertis IBEX 35 Endesa CAC 40 a ACS Gas Natural Indra Sistemas Bankia Grupo Ferrovial Abengoa Banco Santander Acciona Arcelor Mittal Bankinter Acerinox BBVA Banco de Sabadell Amadeus IT Holding FCC Banco Popular Mediaset Gamesa Sacyr Vallehermoso International Airlines Group Notes:
a b a a a a

Table A.3
Source: Datastream International via Wharton Research Data Services 1995-2011 b Average 13.4 7.6 18.8 9.5 10.1 1.7 7.1 13.7 8.1 14.2 16.4 6.8 8.1 8.1 6.2 -2.4 13.5 9.8 12.4 9.3 6.2 19.9 8.5 15.8 -9 11.2 16.4 9.5 14.4 -12 7.7 8.6 10.3 1.6 -18.7 7 5.9 -10.5 -7.5 2.2 -49.8 2007-2011 b Average 11.6 7.6 3.5 2.4 1.8 1.7 1.5 1.5 -0.2 -0.3 -0.9 -1.1 -1.7 -1.8 -2.2 -2.4 -2.5 -4.8 -6.4 -6.8 -7.1 -7.8 -8.6 -8.9 -9 -9.1 -9.4 -10 -11.6 -12 -13.1 -13.2 -13.9 -15.9 -18.7 -20.1 -20.3 -21.4 -30.5 -36.3 -49.8

2007 4.6 53 36.1 8.9 -4.9 52.3 7.4 41.7 5.5 16 -0.9 52.8 15.1 -33.4 -9.7 22.3 4.8 10.7 28.5 5.1 4.2 -2.6 36.3 3.3 -34.1 -12.7 8.1 55.8 69 7.3 -25.7 -5.3 -10.3 -31.9 -12.6 -14.8 54.3 -40.1 -

2008 -23.3 -19.6 -14.9 -31.9 -35.9 -57.2 -28.3 -25.4 -37 -20 -56.2 -58.1 -43.3 -19.8 -16.8 -40.4 -43.5 -38 -36.5 -35.5 -18 -40.3 -16 -50.6 -10.7 -58 -50.8 -48.7 -58.2 -66.9 -48.3 -30.7 -45.7 -31.7 -52.5 -45.6 -53.1 -59.9 -73.4 -

2009 41.9 1.7 11.3 22.7 33.8 127.8 27.3 29.3 26.5 4.5 107.6 37.4 39.1 59.6 30.1 23.8 23.4 35.8 38.3 8.4 13.4 27.6 12 -3.4 5 78.1 93.2 84.6 6.2 95.5 26.1 31.7 54.9 -15.9 32.8 -9.7 48.1 -6.4 25.6 -

2010 31.5 -15.4 -5.8 14.1 13.6 21.9 12.6 -7.7 15.1 1.3 22.1 -14 15 13.2 -24.7 16.1 27.9 -6.8 -12.9 -7.7 -16 0.6 6.1 -20 -19.1 -4.1 -18 -27.7 -40.3 -10.3 -40 -6.9 -36.6 -20.6 -29.8 -22.3 -9.2 -50.8 -40.3 -

2011 15.3 36.2 -2.3 8.4 18.1 -39.9 -2.2 -14.7 2.1 0.6 -13.2 25.7 -9.5 -5 24.3 -14.7 1.9 7.1 -7.7 -13.5 -14.5 -13.4 -31.3 22.8 -19.9 -9 31.3 -10 -20.4 30.7 -46.2 17.9 -21.9 -6.6 2.7 -18.7 8.2 -4 -44.3 -43.3 -12.3 -49.8

Telefónica

Iberdrola

Market indices calculated based on companies included each year Calculated as a geometrical average

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Yearbook on the Internationalization of Spanish Companies 2012

Table A.4
Company Zinkia Entertainment

Ranking of Spanish companies with the largest total shareholder return rate in 2011, relative to companies in the same sector in the euro area
Sector Entertainment Construction Construction Financial Services Banking Paper Biotechnology Gas Insurance Fishing Clothing and fashion Banking Banking Food industry Steel Oil and gas Construction Transportation services Telecommunications Real-estate Banking Banking Banking Transport Material Automobile components Electricity Paper Steel Financial Services Banking Insurance accidents Construction Real-estate Electricity Miscellaneous services Construction Material Alcoholic beverages Machinery Steel Banking Feeding Machinery Construction Steel Construction Machinery Machinery Pharmacist Biotechnology Real-estate Household Products Textile Special chemicals Real-estate Investment Companies Feeding Paper Electricity Electricity Telecommunications Absolute rate Position 1 3 4 6 12 15 2 9 7 21 14 27 32 17 52 11 19 20 22 8 41 42 48 33 13 29 47 64 25 58 38 53 10 40 28 63 24 16 75 72 26 23 55 77 57 30 31 18 54 35 5 35 43 51 46 45 76 59 60 61 % 62.2 31.3 30.7 25.7 17.9 12.2 36.2 22.8 24.3 6.3 15.3 2.7 1.9 9.1 -8.6 18.1 8.2 7.1 5.1 23.8 -4 -4.1 -6.6 0.8 16.9 2.3 -6 -15.6 4.1 -13.2 -2.1 -10 18.7 -2.3 2.7 -15.3 4.3 10 -21.9 -20.4 3.8 4.6 -12.3 -24.8 -13.2 2.2 2 8.7 -12.1 0 29.2 0 -4.8 -7.9 -5.2 -5 -24.5 -13.5 -14.5 -14.7 Standardized rate Position 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 euro area 2.83 2.03 2.01 1.9 1.85 1.81 1.74 1.72 1.69 1.67 1.5 1.35 1.32 1.32 1.3 1.23 1.2 1.16 1.15 1.13 1.13 1.12 1.04 1.02 1.01 1 0.98 0.94 0.86 0.83 0.81 0.8 0.77 0.74 0.71 0.71 0.7 0.67 0.62 0.59 0.53 0.49 0.47 0.47 0.44 0.41 0.41 0.4 0.39 0.35 0.34 0.3 0.25 0.24 0.21 0.19 0.13 0.11 0.06 0.06 Standardized rate Position 1 3 4 2 12 15 44 36 5 34 20 24 25 32 18 8 17 14 40 23 30 31 35 19 7 43 33 28 9 42 52 10 6 48 71 54 29 13 39 55 51 21 47 45 49 26 27 37 61 22 11 38 50 46 53 64 62 66 68 77 World 2.4 1.5 1.48 1.94 0.83 0.7 0.04 0.22 1.4 0.25 0.57 0.46 0.44 0.27 0.65 1.11 0.7 0.72 0.13 0.48 0.3 0.29 0.23 0.65 1.14 0.06 0.26 0.38 1 0.07 -0.06 0.94 1.23 -0.03 -0.32 -0.09 0.38 0.74 0.14 -0.1 -0.06 0.52 -0.01 0.03 -0.05 0.43 0.42 0.16 -0.17 0.5 0.85 0.15 -0.06 0.02 -0.08 -0.23 -0.19 -0.26 -0.28 -0.42

Grupo Ferrovial Acciona Bolsas y Mercados Españoles Bankinter Miquel y Costas Grifols Gas Natural Mapfre Pescanova Inditex Banco de Sabadell CaixaBank Distribuidora Internacional de Alimentación Lingotes especiales Repsol YPF FCC Abertis Jazztel Sotogrande Banco Popular Español Bankia BBVA CAF Cie Automotive Elecnor Iberpapel Gestión Tubos Reunidos Renta 4 Banca Cívica Grupo Catalana Occidente Abengoa Testa Inmuebles en Renta Red Eléctrica de España Funespaña Fluidra CVNE Zardoya Otis Acerinox Banco Santander Viscofán Urbar Ingenieros Sacyr Vallehermoso Tubacex OHL Duro Felguera Desarrollos Especiales de Sistemas de Anclaje Laboratorios Farmacéuticos Rovi Grifols clase B Union Catalana de Valores Unipapel Dogi International Fabrics Ercros Quabit Inmobiliaria Cía. General de Inversiones Sicav Ebro Foods Grupo Empresarial Ence Iberdrola Endesa Telefónica

92

2012 Yearbook on the Internationalization of Spanish Companies

(continued))

Table A.4
Source: Datastream International via Wharton Research Data Services

Company
Banco Español de Crédito Barón de Ley Papeles y Cartones de Europa Clínica Baviera Corporación Financiera Alba Indra Sistemas Solaria Renta Corporación Real Estate Enagas Campofrío Alimentación Vidrala Inmolevante Prosegur Sniace ACS Vertice 360 Grados Tecnocom Laboratorios Almirall Antena 3 La Seda de Barcelona Prisa clase A Prisa clase B Montebalito IAG Cleop Realia Business Indo Internacional Prim Vocento Gamesa Amper Técnicas Reunidas Ezentis ArcelorMittal Nicolás Correa Grupo Tavex Zeltia Cementos Portland Valderribas NH Hoteles Inypsa Informes y Proyectos Fersa Energias Renovables Mediaset España Comunicación Reyal Urbis Service Point Solutions Vueling Airlines Biosearch Fergo Aisa Meliá Hotels International Faes Farma Metrovacesa Azkoyen Adolfo Dominguez Inmobiliaria Colonial Urbas Guadahermosa Grupo Empresarial San José Uralita Banco de Valencia CAM Amadeus IT Holding Dinamia Capital Privado General de Alquiler de Maquinaria Natraceutical Cleop Bodegas Riojanas Natra Deoleo Nyesa Corporación Dermoestética Hullera Vasco Leonesa

Sector
Banking Alcoholic beverages Paper Health Services Financial Services Information Services Renewable energies Real-estate Gas Feeding Containers Real-estate Business Services Special chemicals Construction Publications and media Telecommunications equipment Pharmacist Publications and media Special chemicals Publications and media Publications and media Real-estate Airlines Construction Real-estate Medical Supplies Medical equipment Publications and media Renewable energies Telecommunications equipment Construction Telecommunications equipment Steel Machinery Textile Pharmacist Construction Material Hotels Construction Electricity Entertainment Real-estate Business Services Airlines Feeding Real-estate Hotels Pharmacist Real-estate Machinery Clothing and fashion Real-estate Real-estate Real-estate Construction Material Banking Banking Financial Management Financial Services Transport Material Feeding Construction Alcoholic beverages Feeding Feeding Real-estate Health Services Coal

Absolute rate
Position
91 44 80 50 62 71 88 67 34 56 49 74 66 65 87 79 92 70 81 69 99 108 82 109 84 86 35 73 117 101 98 95 100 106 85 78 93 103 90 107 96 104 110 97 124 89 112 102 111 118 105 94 120 122 123 116 127 128 68 113 126 114 125 83 119 121 129 115 39

Standardized rate
% Position
61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 -

Standardized rate
Position
80 58 65 85 59 73 41 57 74 75 63 60 78 70 91 100 87 84 103 76 79 81 67 90 104 69 56 95 88 72 97 105 98 101 102 82 107 116 92 111 115 119 83 113 108 99 86 106 117 89 120 123 93 94 96 126 124 125 121 118 127 109 128 122 112 114 110 129 16

euro area
0.04 0.03 0.02 0.01 -0.03 -0.05 -0.06 -0.06 -0.08 -0.1 -0.12 -0.14 -0.18 -0.18 -0.21 -0.23 -0.26 -0.28 -0.3 -0.3 -0.3 -0.35 -0.35 -0.35 -0.38 -0.39 -0.41 -0.42 -0.42 -0.48 -0.51 -0.51 -0.52 -0.62 -0.64 -0.65 -0.71 -0.72 -0.74 -0.74 -0.85 -0.86 -0.9 -0.92 -0.95 -0.98 -0.99 -1.03 -1.1 -1.13 -1.14 -1.18 -1.2 -1.23 -1.28 -1.38 -1.39 -1.42 -1.49 -1.71 -1.72 -1.75 -1.78 -1.83 -1.92 -2.06 -2.33 -

World
-0.51 -0.14 -0.25 -0.59 -0.17 -0.35 0.08 -0.13 -0.36 -0.37 -0.21 -0.17 -0.45 -0.31 -0.68 -0.8 -0.64 -0.57 -0.87 -0.39 -0.48 -0.54 -0.28 -0.67 -0.95 -0.3 -0.12 -0.73 -0.65 -0.35 -0.78 -0.98 -0.79 -0.8 -0.87 -0.56 -1.03 -1.35 -0.69 -1.2 -1.32 -1.46 -0.56 -1.24 -1.15 -0.79 -0.61 -0.98 -1.37 -0.66 -1.48 -1.56 -0.7 -0.71 -0.73 -1.85 -1.56 -1.57 -1.5 -1.41 -1.95 -1.15 -2.18 -1.54 -1.2 -1.24 -1.15 -2.21 0.7

-37.3 -4.9 -26.9 -7.1 -15 -19.9 -32.4 -18.6 0.6 -12.3 -6.8 -21.5 -18.1 -15.8 -31.3 -26.1 -37.4 -19.8 -28.2 -19 -43 -47.3 -28.7 -47.4 -29.5 -30.1 0 -21.2 -55.4 -43.3 -42.7 -39.9 -43 -46.2 -30.1 -25.8 -37.8 -44 -35.8 -46.4 -41.1 -44.3 -48.4 -41.9 -60.2 -34.7 -51.7 -43.5 -51.1 -55.5 -45 -38.5 -58.3 -58.9 -60.1 -55.3 -80.6 -80.8 -18.7 -53.4 -74.8 -53.6 -74.5 -29.5 -56.5 -58.7 -89.4 -53.7 -2.1

Note: The Pearson correlation coefficient between the Standardized rate in the euro area and the Standardized rate in the world is 90.3% 93

Yearbook on the Internationalization of Spanish Companies 2012

Table A.5

Ranking by sector of the Spanish companies with the largest total shareholder returns in 2011,relative to the companies in the same sector in the euro area
Standardized rate euro area
1.3 0.94 0.62 0.47 -0.62 -1.42 0.53 0.19 -0.1 -0.98 -1.72 -1.83 -1.92 1.85 1.35 1.32 1.13 1.12 1.04 0.83 0.59 0.04 -1.38 -1.39 0.7 0.03 -1.78 1.74 0.39 1.32 0.21 1.01 1.5 -1.14 2.03 2.01 1.2 0.8 0.47 0.44 -0.21 -0.38 -0.51 -0.74 -1.75 1 0.74 0.11 0.06 -0.85 -0.06 -0.48 2.83 -0.86 -0.12 -0.26 -0.51 -0.42 0.4 -0.28 -0.71

Company
Lingotes especiales Tubos Reunidos Acerinox Tubacex ArcelorMittal Amadeus IT Holding Viscofán Ebro Foods Campofrío Alimentación Biosearch Natraceutical Natra Deoleo Bankinter Banco de Sabadell CaixaBank Banco Popular Español Bankia BBVA Banca Cívica Banco Santander Banco Español de Crédito Banco de Valencia CAM CVNE Barón de Ley Bodegas Riojanas Grifols Grifols clase B Hullera Vasco Leonesa Distribuidora Internacional de Alimentación Cía. General de Inversiones Sicav Cie Automotive Inditex Adolfo Domínguez Grupo Ferrovial Acciona FCC Abengoa Sacyr Vallehermoso OHL ACS Cleop Técnicas Reunidas Inypsa Informes y Proyectos Cleop Elecnor Red Eléctrica de España Iberdrola Endesa Fersa Energias Renovables Solaria Gamesa Zinkia Entertainment Mediaset España Comunicación Vidrala Tecnocom Amper Prim Laboratorios Farmacéuticos Rovi Laboratorios Almirall Zeltia

Sector
Steel Steel Steel Steel Steel Financial administration Food Food Food Food Food Food Food Banking Banking Banking Banking Banking Banking Banking Banking Banking Banking Banking Alcoholic beverages Alcoholic beverages Alcoholic beverages Bio-technology Bio-technology Coal Food industry Investment holdings Auto parts Fashion Fashion Construction Construction Construction Construction Construction Construction Construction Construction Construction Construction Construction Electricity Electricity Electricity Electricity Electricity Renewable energy Renewable energy Enternainment Enternainment Packaging Telecommunications equipment Telecommunications equipment Medical equipment Pharmaceuticals Pharmaceuticals Pharmaceuticals

Absolute rate
-8.6 -15.6 -21.9 -24.8 -46.2 -18.7 3.8 -5 -12.3 -34.7 -53.6 -56.5 -58.7 17.9 2.7 1.9 -4 -4.1 -6.6 -13.2 -20.4 -37.3 -80.6 -80.8 4.3 -4.9 -29.5 36.2 -12.1 -2.1 9.1 -5.2 16.9 15.3 -38.5 31.3 30.7 8.2 -10 -12.3 -13.2 -31.3 -29.5 -39.9 -46.4 -74.5 2.3 -2.3 -13.5 -14.5 -41.1 -32.4 -43.3 62.2 -44.3 -6.8 -37.4 -42.7 -21.2 8.7 -19.8 -37.8

World
0.65 0.38 0.14 0.03 -0.8 -1.5 -0.06 -0.23 -0.37 -0.79 -1.15 -1.2 -1.24 0.83 0.46 0.44 0.3 0.29 0.23 0.07 -0.1 -0.51 -1.56 -1.57 0.38 -0.14 -1.54 0.04 -0.17 0.7 0.27 -0.08 1.14 0.57 -1.56 1.5 1.48 0.7 0.94 -0.01 -0.05 -0.68 -0.95 -0.98 -1.2 -2.18 0.06 -0.03 -0.26 -0.28 -1.32 0.08 -0.35 2.4 -1.46 -0.21 -0.64 -0.78 -0.73 0.16 -0.57 -1.03

94

2012 Yearbook on the Internationalization of Spanish Companies

(continued)
Standardized rate euro area
-1.03 1.72 -0.08 -0.74 1.13 0.77 0.35 0.24 -0.06 -0.14 -0.35 -0.39 -0.9 -0.99 -1.1 -1.18 -1.2 -1.23 -2.06 -0.35 -0.95 0.67 0.49 0.41 0.41 -0.64 -1.13 0.71 -0.72 -1.28 -0.52 1.02 -1.71 1.81 0.98 0.13 0.02 1.67 1.23 0.34 -0.23 -0.3 -0.3 -0.35 -0.42 0.25 -0.18 -0.3 1.69 0.81 -0.18 -0.92 -0.05 0.01 -2.33 1.16 0.71 1.9 0.86 -0.03 -1.49 -0.41 1.15 0.06 0.3 -0.65

Table A.5
Source: Datastream International via Wharton Research Data Services

Company
Faes Farma Gas Natural Enagas NH Hoteles Meliá Hotels International Sotogrande Testa Inmuebles en Renta Union Catalana de Valores Quabit Inmobiliaria Renta Corporación Real Estate Inmolevante Montebalito Realia Business Reyal Urbis Fergo Aisa Metrovacesa Inmobiliaria Colonial Urbas Guadahermosa Grupo Empresarial San José Nyesa IAG Vueling Airlines Zardoya Otis Urbar Ingenieros Duro Felguera Desarrollos Especiales de Sistemas de Anclaje Nicolás Correa Azkoyen Fluidra Cementos Portland Valderribas Uralita Ezentis CAF General de Alquiler de Maquinaria Miquel y Costas Iberpapel Gestión Grupo Empresarial Ence Papeles y Cartones de Europa Pescanova Repsol YPF Unipapel Vertice 360 Grados Antena 3 Prisa clase A Prisa clase B Vocento Ercros Sniace La Seda de Barcelona Mapfre Grupo Catalana Occidente Prosegur Service Point Solutions Indra Sistemas Clínica Baviera Corporación Dermoestética Abertis Funespaña Bolsas y Mercados Españoles Renta 4 Corporación Financiera Alba Dinamia Capital Privado Indo Internacional Jazztel Telefónica Dogi International Fabrics Grupo Tavex

Sector
Pharmaceuticals Gas Gas Hotels Hotels Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Real estate Airlines Airlines Machinery Machinery Machinery Machinery Machinery Machinery Building materials Building materials Building materials Telecommunications materials Transport mateterials Transport mateterials Paper Paper Paper Paper Fishing Oil and gas Household products Publications and media Publications and media Publications and media Publications and media Publications and media Special chemicals Special chemicals Special chemicals Insurance Accident insurance Business services Business services Information services Health services Health services Transport services Miscellaneous services Financial services Financial services Financial services Financial services Medical supplies Telecommunicatios Telecommunicatios Textile Textile

Absolute rate
-51.1 22.8 0.6 -35.8 -43.5 23.8 18.7 0 -7.9 -18.6 -21.5 -28.7 -30.1 -48.4 -51.7 -55.5 -58.3 -58.9 -60.1 -89.4 -47.4 -60.2 10 4.6 2.2 2 -30.1 -45 -15.3 -44 -55.3 -43 0.8 -74.8 12.2 -6 -24.5 -26.9 6.3 18.1 29.2 -26.1 -28.2 -43 -47.3 -55.4 -4.8 -15.8 -19 24.3 -2.1 -18.1 -41.9 -19.9 -7.1 -53.7 7.1 2.7 25.7 4.1 -15 -53.4 0 5.1 -14.7 0 -25.8

World
-1.37 0.22 -0.36 -0.69 -0.98 0.48 1.23 0.5 0.02 -0.13 -0.17 -0.28 -0.3 -0.56 -0.61 -0.66 -0.7 -0.71 -0.73 -1.15 -0.67 -1.15 0.74 0.52 0.43 0.42 -0.87 -1.48 -0.09 -1.35 -1.85 -0.79 0.65 -1.95 0.7 0.26 -0.19 -0.25 0.25 1.11 0.85 -0.8 -0.87 -0.48 -0.54 -0.65 -0.06 -0.31 -0.39 1.4 -0.06 -0.45 -1.24 -0.35 -0.59 -2.21 0.72 -0.32 1.94 1 -0.17 -1.41 -0.12 0.13 -0.42 0.15 -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

95

Yearbook on the Internationalization of Spanish Companies 2012

Table A.6

Ranking of Spanish companies with best average recommendation from stock market analysts in 2011, relative to companies in the sector in the euro area

Average recommendation score of 1 is best, and 5 is worst Number of recommendations Standardized Standardized Outright euro area World
1 2 1 1 1 3 4 1 1 11 2 5 8 21 9 10 27 4 4 19 15 9 43 15 9 16 22 25 11 23 27 8 12 17 22 4 17 8 27 6 10 21 24 42 31 12 20 9 20 32 32 7 22 22 14 -1.01 -0.75 -0.77 -0.77 -0.77 -0.56 -0.47 -0.68 -0.68 0.25 -0.75 -0.36 -0.03 1.37 0.07 0.18 2.04 -0.47 -0.47 0.38 0.72 0.01 2.85 0.65 0.03 0.83 1.48 1.66 0.29 3.25 1.48 -0.05 0.4 0.85 1.48 -0.46 1.14 0.07 2.04 -0.36 0.18 1.37 1.7 2.17 1.83 0.35 1.26 0.08 1.5 2.55 2.93 -0.15 1.61 1.36 0.62 -0.9 -0.65 -0.86 -0.86 -0.86 -0.52 -0.28 -0.81 -0.81 0.62 -0.65 -0.13 0.2 2.02 0.48 0.63 2.86 -0.28 -0.28 1.05 1.39 0.03 4.05 0.84 0.34 1.35 2.22 2.14 0.78 2.14 2.17 0.06 0.93 1.16 2.45 -0.43 1.21 0.05 2.86 -0.1 0.63 2.02 2.44 3.55 2.64 0.55 2.15 0.34 1.6 3.66 3.15 -0.06 2.06 1.78 1.06

Company
Lets Gowex Grupo San José Grupo Nostrum Secuoya Zinkia Entertainment Grupo Tavex Unipapel AB Biotics Medcom Tech CAF Elecnor Cie Automotive Pescanova OHL Arcelor Mittal Papeles y Cartón Ferrovial Iberpapel Miquel y Costas Jazztel ENCE Vueling Airlines Repsol International Airlies Group Fluidra Ebro Foods Distribuidora Intal. de Alimentación Acciona Vidrala Amadeus Enagas Grupo Catalana Occidente Corporación Financiera Alba Sacyr Vallehermoso Acerinox Dinamia PRISA Codere Abertis Grupo Duro Felguera FAES Abengoa Técnicas Reunidas Telefónica Red Eléctrica de España Realia NH Hoteles Campofrío Meliá Hotels Inditex Mediaset Banca Cívica Grifols Bolsas y Mercados Españoles Viscofán

Average recommendations Standardized Standardized Outright euro area World
1 1 1 1 1 1.33 1.25 1 1 1.45 1.5 1.6 1.75 1.67 1.67 1.7 1.74 1.75 1.75 1.89 1.8 1.89 1.79 1.93 1.89 2 2.05 2.04 2 1.83 1.96 2.13 2.08 2.18 2.18 2.25 2.12 2.13 2.19 2.17 2.3 2.29 2.29 2.38 2.26 2.42 2.4 2.44 2.35 2.47 2.38 2.57 2.27 2.64 2.57 -1.71 -1.57 -1.39 -1.39 -1.39 -1.35 -1.22 -1.21 -1.21 -1.03 -0.97 -0.83 -0.81 -0.76 -0.75 -0.72 -0.68 -0.66 -0.66 -0.61 -0.61 -0.56 -0.54 -0.52 -0.5 -0.48 -0.42 -0.42 -0.38 -0.36 -0.34 -0.32 -0.29 -0.26 -0.18 -0.18 -0.15 -0.14 -0.14 -0.11 -0.05 -0.02 -0.02 -0.01 0 0.01 0.06 0.09 0.11 0.12 0.14 0.17 0.22 0.25 0.25 -1.73 -1.48 -1.63 -1.63 -1.63 -1.14 -1.09 -1.49 -1.49 -0.88 -0.82 -0.61 -0.58 -0.6 -0.52 -0.48 -0.5 -0.41 -0.41 -0.57 -0.34 -0.54 -0.5 -0.49 -0.31 -0.25 -0.18 -0.33 -0.06 -0.41 -0.26 -0.21 0.05 -0.14 0.18 -0.04 -0.07 -0.06 0.09 0.05 0.35 0.22 0.22 0.07 0.18 0.18 0.49 0.33 0.25 0.37 0.29 0.39 0.35 0.48 0.5

96

2012 Yearbook on the Internationalization of Spanish Companies

(continued)

Table A.6
Source: I/B/E/S (Institutional Brokers Estimates System) via Wharton Research Data Services

Number of recommendations Company Outright
Fersa Laboratorios FAR Gas Natural BBVA Barón de Ley Iberdrola Gamesa Almirall Endesa ACS Antena 3 Clínica Baviera Banco Santander Renta 4 Banesto Amper Prosegur Grupo Ezentis Mapfre FCC Caixabank Indra Sistemas Cementos Portland Bankia Ercros Tecnocom Banco Popular Español Bankinter La Seda de Barcelona Sabadell Solaria Energía Banco Pastor Metrovacesa Reyal Urbis Zardoya Otis Vocento Adolfo Domínguez Natra Zeltia Azkoyen Uralita Deoleo Inmobiliaria Colonial General de Alquiler de Maquinaria Renta Corporación Service Point Natraceutical Corporación Dermoestética Banco de Valencia Quatib Inmobiliaria Vértice Trescientos Dogi International Fabrics 2 12 26 41 9 33 28 18 21 24 28 7 40 1 22 4 18 1 23 21 18 27 11 14 2 2 29 25 4 27 4 12 7 1 13 13 4 6 7 5 5 8 5 6 4 3 4 7 1 1 1 1

Average recommendations Outright
2.5 2.33 2.65 2.73 2.67 2.7 2.68 2.5 2.81 2.75 2.82 2.57 2.98 3 3.05 3 3 3 3.26 3.14 3.39 3.19 3.36 3.57 3.5 3.5 3.76 3.84 3.75 3.93 3.75 4 4 4 3.92 3.85 3.75 3.83 4.14 4 4.4 4.13 4.4 4.33 4.5 4.33 4.25 4.29 5 5 5 5

Standardized euro area
-0.65 0.52 0.93 3.27 0.08 1.47 2.15 1.17 0.54 1.7 1.08 -0.02 3.17 -0.76 1.36 -0.78 1.26 -0.86 1.46 1.37 0.95 3.93 0.25 0.55 -0.69 -0.75 2.06 1.66 -0.54 1.86 -0.48 0.35 -0.15 -0.76 0.5 0.66 -0.46 -0.24 -0.15 -0.42 -0.36 -0.03 -0.36 -0.17 -0.46 -0.64 -0.35 -0.02 -0.76 -0.76 -0.77 -0.78

Standardized World
-0.75 0.69 1.81 4.1 0.34 2.57 3 1.51 1.27 2.44 2.03 0.01 3.98 -0.79 1.78 -0.57 1.34 -0.79 1.9 2.02 1.29 2.65 0.62 0.8 -0.58 -0.65 2.63 2.14 -0.36 2.39 -0.52 0.55 -0.06 -0.79 1.09 0.69 -0.38 -0.09 0.18 -0.22 -0.3 0.2 -0.13 -0.21 -0.43 -0.51 -0.4 0.01 -0.79 -0.79 -0.86 -0.81

Standardized euro area
0.28 0.28 0.33 0.35 0.38 0.39 0.45 0.47 0.52 0.54 0.54 0.55 0.63 0.65 0.71 0.76 0.83 0.84 0.94 1.01 1.08 1.17 1.27 1.28 1.29 1.44 1.49 1.58 1.65 1.68 1.72 1.76 1.76 1.76 1.76 1.77 1.78 1.89 2.01 2.04 2.2 2.27 2.3 2.31 2.32 2.44 2.44 2.48 2.87 2.87 3.05 3.4

Standardized World
0.52 0.44 0.43 0.6 0.63 0.49 0.73 0.68 0.63 0.82 0.65 0.78 0.94 0.96 1.03 0.88 1.15 1.15 1.31 1.33 1.49 1.46 1.62 1.73 2 1.81 1.98 2.09 2.07 2.21 2.33 2.31 2.31 2.31 2.57 2.34 2.06 2.17 2.87 2.46 2.84 2.56 3.23 3.01 2.98 2.9 3.22 3.28 3.65 3.65 3.94 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 correlation coefficient between the Standardized average recommendation in the euro area and the Standardized average recommendation in the world is 98.7% 97

2012 Yearbook on the Internationalization of Spanish Companies

7. Bibliography
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 reveses, 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.

99

2012 Yearbook on the Internationalization of Spanish Companies

8. Recent publications of the Círculo de Empresarios
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.

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