the spanish medium-sized company-círculo de empresarios 2014 annual report

8/12/2019 The Spanish Medium-sized Company-Crculo de Empresarios 2014 Annual Report

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2 Crculo de Empresarios. The Spanish mediu m-sized company. 2014 ANNUAL REPORT


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Part I: The Spanish medium-sized company 3

PART I: THE SPANISH MEDIUM-SIZED COMPANY

1. Project activit ies 7

2. The Spanish medium-sized company: Trends in the European context, x-ray and development 10

2.1 Trends in the medium-sized company in the European context (2008-2014) 10

2.2 X-ray of the Spanish medium-sized company 19

2.3 Development of the Spanish medium-sized company (2008-2012) 22

PART II: MONOGRAPHS

Monograph 1.

Analysis of real productivity in Spanish companies 27

Monograph 2.

Factors of business competitiveness: exporting propensity and capacity for innovation 35

PART III: STATISTICAL SOURCES FOR BUSINESS ANALYSIS

Updating of available information for the analysis of the business situation 43

Statistical sources 43

Synthesis of indicators 55

PART IV: CONTRIBUTIONS TO BUSINESS ANALYSIS

AND PROPOSALS FOR REACTIVATING THE BUSINESS FABRIC 59


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PART I

The Spanishmedium-sizedcompany


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6 Crculo de Empresarios. La empresa mediana espaola. INFORME ANUAL 2014


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Part I: The Spanish medium-sized company

1. Project activities

The project of the Crculo de Empresarios forthe Spanish medium-sized company 1 seeks toevaluate and make these firms more visible byproviding an accurate diagnosis. While they areessential for the growth of the Spanisheconomy, they have not received systematicanalysis in the economic debate. The aim is toprovide a platform and connector for availableinformation and thus generate new analysis andpolicies.

The Crculo de Empresarios seeks substantialarguments that will contribute to a realisticeconomic-financial and social analysis of ourcompanies: this will allow for connections withthe news media, the Public Administrations,research centers and the business fabric. We seek

a diagnosis that more closely reflects thereality and dynamism of the medium-sizedcompanies in Spain , because we are convincedthat they are the engines for a new model ofeconomic growth.

For this project it is essential to have a databasethat will allow us to identify concretecompanies , as opposed to official statistics thatare very complete but often anonymous. Forthis reason, the departure point is the

INFORMA database , once we have checkedit with the ample coverage of companies

provided by the Spanish Statistical Office (INE). The present study uses INFORMA (SABI) as thesource for the microeconomic analysis of theSpanish business situation.

The target of the study is the Spanish medium-sized company, with between 50 and 249employees (as defined by the EuropeanCommission). However we have excludedcompanies from the real estate and financialsectors because of their special characteristics andbecause they are in a process of restructuring, justas we have excluded the Public Administrations.

This project, which began at the end of 2012,seeks to be a long-term endeavor, and isstructured around several axes that arecomplementary and reinforce each other. There

will be an Annual Report about the Spanishmedium-sized company that is produced incollaboration with the Studies Service of theBBVA bank, monographic analyses, a study ofsuccessful cases, and forums with experts fromthe fields of academic research, statistics, policiesand the business world itself.

1 The Project Director is Elena Pisonero, President of Grupo Hispasat and a member of the Crculo de Empresarios,while Yolanda Fernndez has taken part in the technical direction.


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In this new edition of the Report we presentmonographic analyses produced incollaboration with the BBVA Studies Serviceand INE. The first of them is based on ananalysis of the productivity of Spanishcompanies, and applies the shift-sharemethodology 4, which makes it possible to breakdown real productivity into two factors:intersectoral effect and structural change. Thesecond monograph analyzes the informationprovided by INE with regard to the exporting

propensity and innovative activity of theSpanish medium-sized companies.

Academic research

All the information related to this project canbe found on the webpage of the Crculo deEmpresarios5: the principal reports, articles andanalysis of the business scene, produced bydifferent public and private organizations. InPart IV of the present report there is asummary of the principal conclusions of these

reports.

The project has also found it extremely useful to work with the business schools, whose principalaim is to train highly competent managers andthus professionalize our business fabric. Toidentify the keys to success in Spanish firms, weare working in two complementary areas:academic research and a study of successfulcases. We have asked the leading businessschools6 for an account of their academic

research into the business world as well ascompany case studies that can be incorporatedinto the bibliography that we are drawing up.

These bibliographical references will be thebasis for later organizing forums for debate

with the authors of the studies and with thecompanies themselves to analyze concretecases.

Annual ranking o f the Spanishmiddle-sized company

The aim of the study is to identify the mostsuccessful medium-sized companies fromdifferent industries and select the outstanding50. In April of 2014 we presented the study:The Top 50 medium-sized Spanish firms: Aselection of successful cases. It was carriedout by A.T. Kearney, a member company ofthe Crculo de Empresarios, in collaboration

with the work team of the project on theSpanish medium-sized company. This firstranking of the 50 most outstanding medium-sized Spanish companies is regularly includedin the current project, and we want to includethe second edition at the end of 2014.

4. The methodology has been implemented by the BBVA Research work team. 5. (http://circulodeempresarios.org/empresa-mediana-espa%C3%B1ola/acerca-del-proyecto). 6. In March of 2014 we had a meeting with ESADE Business School to determine their participation in the project, and we have

contracted with AEEDE (Spanish Association of Business Management Schools) to channel the participation of the schools.
http://circulodeempresarios.org/empresa-mediana-espa%C3%B1ola/acerca-del-proyecto)http://circulodeempresarios.org/empresa-mediana-espa%C3%B1ola/acerca-del-proyecto)http://circulodeempresarios.org/empresa-mediana-espa%C3%B1ola/acerca-del-proyecto)http://circulodeempresarios.org/empresa-mediana-espa%C3%B1ola/acerca-del-proyecto)


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10 Crculo de Empresarios. The Spanish mediu m-sized company. 2014 ANNUAL

2. The Spanish medium-sized company: Trends i n theEuropean context, x-ray and development

In the first part of this heading we analyze thedevelopment of Spanish companies in theEuropean context , using data and estimatesby Eurostat . Based on comparative companystructures , an estimate is made of theircontribution to employment, to the GVA andto the productivity of the companies rankedby size, as determined by the number of theirsalaried employees, according to criteria usedby Eurostat. In this edition of the report, wecomplement the comparison of Spanishcompanies in the EU with an analysis oftheir productive structure .

The second part is centered on the situationin Spain, with a focus on the medium-sized companies : the source for the data arethe 2012 annual accounts presented in theBusiness Register and compiled byINFORMA for SABI. This database allows usto analyze the development of the principalfinancial-economic indicators of the Spanishmedium-sized company during the period of2008-2012.

2.1. Trends in the medium-sizedcompany in the European context (2008-2014)

Comparison of th e averagecompany size

According to estimates by Eurostat, in Spainthe number of workers per company is 4.7in 2014, less than half the average in theUnited Kingdom and Germany, and one ofthe lowest among the principal EUcountries . This smaller company size can beexplained by the lesser relative presence inSpain of large and medium-sized companies,

which account for 0.8% of the total numberof companies, according to the most recentEurostat figures from 2014.

5.14.7

12.4

11.7

5.65.7

4.1 4

10.711

0

2

4

6

8

10

12

14

2008 2009 2010 2011 2012 2013 (est.) 2014 (p)

Development of the average number of emplo yees per comp any

Germany

United Kingdom

FranceSpainItaly

Source: Crculo de Empresarios according to Eurostat


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Parte I: Part I: The Spanish medium-sized company 11

During the 2008-2014 period the averagecompany size in Spain has been reduceddue to a greater presence of companies withfewer than 10 salaried workers: it rose to93.8% of the total number of Spanishcompanies in 2014 (from 93.1% in 2008). Bycontrast, there was a reduction in the relative

weight of the small and medium-sizedcompanies, while the weight of the largecompanies one of every 1,000 compoanies

was maintained. This tendency toward greater

Medium-sized Spanish companies have anaverage ratio of employees per company (95)that is very similar to Germany, Italy andPortugal. In these four cases the medium-sizedcompanies have reduced their size during theperiod analyzed, in contrast with trends amongmedium-sized companies in France and theUnited Kingdom, which have grown during theyears of crisis and now average around 110

workers per company.

Distribution ofcompanies by size.

% of total .

Source:

Crculo de Empresarios

according to Eurostat

concentration in smaller companies is alsoseen in Portugal, while in the rest of theeconomies analyzed the micro-companies lose

weight, as in the case of Germany, or remain very stable in the 2008-2014 period.

In the analysis of the average business size, inaddition to the participation of thecompanies by size, it is necessary to considerthe average number of employees in the

different sized firms. Thus the smalleraverage size of Spanish companies is alsoexplained by a moderate reduction in thenumber of employees in all kinds ofcompanies . This tendency is also evident inGermany, where the average company sizefell from 12.4 employees in 2008 to 11.7 in2014.

As for the large companies , the average sizeof those in Spain (976 employees percompany) surpasses those in Germany, Italyand Portugal. Among the EU countriesanalyzed, the large British companies are theones with the highest number of employeesper company, a figure that increased duringthe 2008-2014 period.

Development of employment

As for employment in Spain, Eurostatestimates that the number of salaried workershas declined by 2.6 million persons between2008 and 2014, which represents anaccumulated drop of 19%. The companiesthat have reduced their staff the most havebeen the small and medium-sized ones, byaround 25%, while in the large companies thedecrease in jobs has been around 13%, below

Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

TOTAL

Micro(0-9)

Small(10-49)

Medium-sized (50-

249)

Large(more than

250)

Spain 93.1% 6.0% 0.8% 0.1% # 93.8% 5.4% 0.7% 0.1%Germany 82.9% 14.2% 2.5% 0.5% # 81.9% 15.1% 2.6% 0.5%France 93.7% 5.3% 0.9% 0.2% # 94.0% 5.1% 0.8% 0.2%Italy 94.3% 5.1% 0.5% 0.1% # 94.4% 5.0% 0.5% 0.1%Portugal 94.0% 5.1% 0.7% 0.1% # 94.8% 4.5% 0.7% 0.1%United of Kingdom 89.3% 8.8% 1.5% 0.4% # 89.4% 8.7% 1.5% 0.4%Source: Crculo de Empresarios acc ording to Eurostat

2014 (est. Eurostat)2008


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Development ofemployment and

number of companiesby size. (Accumulated

variation 2008-2014)

Source:



0%

-5%

-10%

-15%

-20%

-25%

-30%

SMALL (10-49)

-25.6%

MEDIUM-SIZED (50-249)

-24.5%

LARGE (More than 250)

-12.6%

EMPLOYMENT

NUMBER OF COMPANIES

the average figure for companies as a whole. As can thus be seen in the accompanyinggraph, it is the large companies ( those withmore than 250 employees) that have beenmost resistant during these crisis years.

Contribution to employment bycompanies according to size

The contribution to employment bycompanies of all sizes in the principal EUcountries has remained relatively stable inrecent years. Although variations are notsignificant, in Spain we can observe a moreimportant role in providing employmentamong both large companies and those withfewer than 10 employees in 2014, ascompared with the start of the period,according to estimates by Eurostat.

In 2014, according to Eurostat, the Spanishmicro-companies provided employmentfor 40% of the countrys active workers, apercentage surpassed only by Italy (46%)

where this kind of company represents94.4% of the total number of companies,greater than the 93.8% in Spain.

The small companies provide 21% of thejobs in Spain , similar to the small Italiancompanies but below the 23% of Germany,

where this kind of company accounts for15.1% of the total number of companies, thegreatest percentage among the countriesstudied.

Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

TOTAL

Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

Spain 93.1% 6.0% 0.8% 0.1% # 93.8% 5.4% 0.7% 0.1%Germany 82.9% 14.2% 2.5% 0.5% # 81.9% 15.1% 2.6% 0.5%France 93.7% 5.3% 0.9% 0.2% # 94.0% 5.1% 0.8% 0.2%Italy 94.3% 5.1% 0.5% 0.1% # 94.4% 5.0% 0.5% 0.1%Portugal 94.0% 5.1% 0.7% 0.1% # 94.8% 4.5% 0.7% 0.1%United of Kingdom 89.3% 8.8% 1.5% 0.4% # 89.4% 8.7% 1.5% 0.4%

2014 (est. Euro stat)2008

Average nu mber o f

employees bycompany size

SourceCrculo de Empresariosaccording to Eurostat


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Thus in Spain, companies with fewer than50 employees account for more than 60% ofall salaried workers, which means thatbusiness is very vulnerable during times ofcrisis because the smallest firms are the onesthat make the biggest cuts in their staff.

The medium-sized Spanish companiesprovide 14% of total employment , acontribution similar to companies of this

size in France. For firms of this size,Germany is the country with greaterparticipation in the business fabric (2.6% of

the total number of companies) andemployment (21% of the total).

The big British firms are larger in size thanthe average of those in the countriesconsidered, and provide 48% of totalemployment, as against the 26% in Spain .In Spain the large companies are fairlybig, but are less important in providingemployment than other EU countries .

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

25.6%

13.8%

21.0%

39.5%

37.7%

20.6%

32.2%

18.6%

36.2%

15,2%

19.2%

29.4%

20.2%

12.4%

21.5%

46.0%

21.0%

16.9%

22.4%

39.7%

4.7%

16.0%

18.0%

18.3%

Aportacin al empleopor tamaos de empresa. Estimaciones 2014

Source:Crculo de Empresarios


0%SPAIN GERMANY FRANCE ITALY PORTUGAL UK

MICRO SMALL MEDIUM-SIZED LARGE

Contribution toemployment bycompany size

% of total

Source:



Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

OTA

Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

Spain 39% 23% 15% 24% 40% 21% 14% 26%Germany 19% 22% 20% 40% 19% 23% 21% 38%France 28% 19% 16% 37% 29% 19% 15% 36%Italy 46% 22% 13% 19% 46% 21% 12% 20%Portugal 39% 23% 17% 21% 40% 22% 17% 21%United of Kingdom 20% 16% 15% 49% 18% 18% 16% 48%Source: Crculo de Empresarios according to Eurostat

2014 (est. Eurost at)2008

Contribution toemployment bycompany size.Estimates 2014


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If there were more workers in the largeSpanish companies, the impact of the crisisin the labor market would have been lesssevere. If in Spain the distribution ofemployment in companies by size weresimilar to that of the United Kingdom

where four of each 1,000 companies arelarge ones during the crisis , all otherthings being the same, more than 500,000jobs would have been saved .

Contribution to the GVA of c ompaniesby size

In Spain the big companies are increasinglyimportant in contributing to the GVA: theirshare rose from 33% of the total in 2008 to 35%in 2014. A similar increase has also come aboutin the big companies in Italy and France, whichhas made it possible to narrow the gap with

Contribution tothe GVA by

company size% of total .

Source:



Contribution

to the GVA by

company s ize.

Estimates for

2014 Source:

Crculo de Empresarios according to Eurostat

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

35.2%

16.7%

20.6%

27.5%

45.8%

20.1%

18.6%

15.5%

41.6%

14.7%

17.3%

26.4%

31.7%

16.4%

22.0%

29.9%

31.7%

22.8%

22.7%

22.8%

50.2%

16.3%

14.9%

18.6%

0% SPAIN GERMANY FRANCE ITALY PORTUGAL UK

MICRO SMALL MEDIUM-SIZED LARGE

Micro(0-9)

Small(10-49)

Medium-sized

(50-249)

Large(more than

250)

OT

AMicro(0-9)

Small(10-49)

Medium-sized (50-

249)

Large(more than

250)

Spain 28% 22% 17% 33% 27% 21% 17% 35%Germany 15% 17% 20% 48% 15% 19% 20% 46%France 26% 18% 15% 40% 26% 17% 15% 42%Italy 32% 22% 16% 29% 30% 22% 16% 32%Portugal 23% 23% 22% 32% 23% 23% 23% 32%United of Kingdom 18% 15% 16% 50% 19% 15% 16% 50%

2014 (est. Eurostat)2008


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G V A / e m p l o y e e

i n t h o u s a n d s o f e u r o s

regard to countries with a great concentrationof employment in the companies of morethan 250 employees. For their part, themedium-sized Spanish companies maintaintheir participation in the GVA while both thesmall companies and those with fewer than

worker in the firms with fewer then 10employees.

The small companies have a morebalanced participation in employment (21%)and in the GVA (21%) than the micro

70 AVERA GE OF EU COUNTRIES *

60 SPAIN

50

40

30

20

10

0

Comparativeproductivity bycompany size.

(GVA per employee inthousands of euros).

Eurostat 2014estimates

* Median productivity of Germany,France, Italy, United Kingdom andPortugal

MICRO (0-9)

SMALL (10-49)

MEDIUM-SIZED(50-249)


Source:



10 employees reduce by one percentage pointtheir weight in the total GVA generated.

In spite of the high contribution to employmentby the micro companies in Spain (40%), theirparticipation in the GVA is around 27% in 2014,

which implies adrop in productivity per

companies, with greater weight inemployment.

The contribution to the GVA of themedium-sized companies is 17% of the totalin 2014, above that of countries like theUnited Kingdom and France.

90

80 LUXEMBURG

70

GERMANY

50 UNITED KINGDOM

40

30

BELGIUM

SPAIN

GREECE

pRODUCTIVITY empresarial. UE-15

Source:



20

10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

% employees in companies with fewer than 10 workers

Productivity andcompany size.EU-15.


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In the United Kingdom half of the GVA isgenerated by the large companies , and inGermany the figure is 46%, as against the 35%in Spain.

Comparative productivit y of t hecompanies

Work productivity increases in proportion tocompany size, so that the medium-sized andlarge companies are the ones that have thehighest ratios of GVA per employee amongthe countries studied. The productivity ofSpanish companies is similar to the average ofEU countries studied, with the exception ofthose with fewer than 10 employees . Thismay be explained in part by the fact that thereare more Spanish companies in the servicesector, as analyzed in the following point.

To compare the positive correlation betweencompany size and work productivity, we havecalculated for the 28 EU countries thepercentage of salaried workers in microcompanies and the GVA per employee inthousands of euros. As shown in theaccompanying graph, the countries in the euro

zone with the largest companies, such asGermany and the United Kingdom, are theones that achieve the highest levels ofproductivity. At the other end is Spain, one ofthe countries in this area with the highestproportion of employees in companies withfewer than 10 workers, which lowers the ratioof productivity.

As a consequence, those countries withlarger companies achieve, in general terms,higher work productivity.

Productive structure o f the medium-sizedcompany in th e European context

Companies in the service sector accountfor 79% of the Spanish business fabric , thehighest percentage among the leading EUcountries. They are predominantly small andspecialized micro companies that work in retailtrade, restaurants, professional services(including legal, consultancy and engineeringfirms, among others). As a whole, this servicesbranch accounted for 50% of the total Spanishcompanies in 2013, according to Eurostatestimates.

Productivestructure of the

business fabric.2013

Source:



100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

79%

13%

67%

23%

71%

17%

76%

13%

76%

16%

76%

15%

8% 9% 12% 10% 8% 10% 0%

SPAIN FRANCE ITALY GERMANY UK PORTUGAL

ENERGY INDUSTRY CONSTRUCTION SERVICES


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46%

14%

38%

100%

90%

80%

70%

60%

50%

40% 30%

57%

13%

57%

11%

44%

7%

46%

63%

6%

65%

9%

Productivespecialization inthe medium-sized company.2013

Source:



20%

10%

29% 30% 30%

26%

0% SPAIN FRANCE ITALY GERMANY UK PORTUGAL

ENERGY INDUSTRY CONSTRUCTION SERVICES

With regard to medium-sized Spanishcompanies, while 28.5% of the total are inthe industrial sector reaches a percentagesimilar to that in German and Frenchmedium-sized companies only 57% are inthe services sector , below the percentages inGermany or the United Kingdom. Thereduced participation of Spanish medium-sized companies in the service sector reflectsthe high atomization of this sector: it is thesmaller companies that are more importantand which demonstrate less productivity withregard to EU countries.

Germany and the United Kingdom have thegreatest importance in the medium-sized company service sector, which allows them toposition themselves in the more productivebranches of services, such as professionalactivities, which require companies of as certainsize.


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In conclusion, During the 2008-2014 period the averagesize of companies has declined slightly inSpain, due to a greater presence of companies

with fewer than 10 employees, and to themoderate reduction in the average number ofemployees at all kinds of companies.

Spanish companies have an average sizeof 4.7 employees , which is lower than that ofcompanies in the EU, due to the lack ofmedium-sized and large companies in Spain.

The medium-sized companies representjust 0.7% of the total number ofcompanies, and one of every thousandSpanish companies is a large one.

The contribution to employment of thesmall and micro companies is greater than60% in Spain, as against the 50% average inthe principal EU countries. The medium-sized Spanish companies account for 14%of the employment , a contribution similar tothat of French companies of this size .

The Spanish business fabric, where thesmaller companies are predominant, is thus

very vulnerable during phases of crisis,because it is the large companies (morethan 250 employees) that best resist thesecrisis years . The large Spanish companiesincreased their participation in the GVA andin employment by two percentage pointsfrom 2008 to 2014.

If employment in Spain were distributedby company size the way it is in theUnited Kingdom (where four of every 1,000companies are large ones) more than500,000 Spanish jobs would have beensaved during the crisis.

The productivity of Spanish companies issimilar to the average in the EU countriesunder study, with the exception of Spanishfirms with fewer than 10 employees , wherethe negative gap is higher than in othercategories. In general terms, the countries

with the largest companies achieve higher productivity .

Companies in the service sector accountfor 79% of the Spanish business fabric , thehighest percentage among the principalcountries of the EU. But the weight of theservice sector drops to 57% in themedium-sized companies, a participationsimilar to that of French medium-sizedcompanies and lower than the percentages forGermany or the United Kingdom.

The reduced participation of medium-sizedcompanies in the service sector reflects thehigh atomization of this sector in Spain, with aclear preponderance of the smaller companies:the ones that demonstrate greater negativeproductivity with regard to the EU countries.

Thus if companies in the service sector werelarger, this would increase overall productivityin the Spanish economy.

To improve the levels of productivity in Spainand achieve sustainable growth, it is necessaryto have a greater supply of middle-sizedcompanies, which are also more importantin the more productive sectors , whichallows them to compete in internationalmarkets and to innovate.


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2.2. X-ray of the Spanish medium-sized company

In this section we focus on the Spanishmiddle-sized company , basing data theannual accounts presented in the BusinessRegister and collected by INFORMA forSABI. The INFORMA database allows us toanalyze the development of the principaleconomic-financial ratios of the Spanish

companies in a homogenous way and with ahigh degree of accuracy that has been checked

with the DIRCE (Central Directory ofCompanies).

It should be remembered that the kind ofcompany we are studying has between 50 and 249employees, and that firms in the real estate andfinancial sectors have been excluded because oftheir special characteristics and because they aregoing through a restructuring process. According

to the INFORMA database, in 2012 there weresome 11,000 medium-sized companies thatemployed more than one million people.

Business situation

Before analyzing the economic-financialsituation of the Spanish medium-sized companyin 2012 (the last year for which we havecomplete information about the balance sheetsand profit and loss accounts of the companies),

we want to give a preview of the trendsrevealed by the latest published indicators.

Following the period of crisis, when companies went under and jobs were lost, the latest datafrom 2014 seems to indicate that things arechanging in the business fabric. Thus the netcreation of commercial companies has been onthe rise since the start of 2013, and in the firstmonths of 2014 there was also an increase in thenumber of salaried workers registered with theSocial Security system. In the first four months of2014, exactly 14,607 companies were created (497of them mediumsized firms), and the number ofSocial Security affiliates grew by 148,800employees (39,200 of them in medium-sizedfirms).

85,000

80,000

75,000

70,000

65,000

60,000

55,000

Net creation ofcommercial

companies(sum of 12months)

Source:

Business Register. INE.

50,000 2009 2010 2011 2012 2013 2014


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X-ray of the Spanish m edium -sizedcompany 2012

According to the latest data fromINFORMA, the average number of

workers in the medium-sized company was 100, and the average annual salary costin 2012 was 37,000 euros.

Company size as measured by average

assets was 39.2 million euros , thus placingSpanish medium-sized companies in theupper part of the range established by theEuropean Commission for these firms (from10 to 43 million euros).

In any case, average billing is 25.1 millioneuros, in the lower part of the EU medium-sized company range (from 10 to 50 millioneuros). According DIRCE data, in 2012 some30% of these companies with 50 to 249

workers had billings of between 10 and 50million euros, 7% of them billed more than 50million, and 64% had less than 10 million

euros in billings.

The medium-sized companies have a ratio ofown resources over balance of 32.7%; thelevel of indebtedness measured by the

weight of debt over own resources is at anelevated ratio of 76%; and the levels ofcoverage are reduced to minimums in theperiod analyzed because of the breakdown inresults.

The intensity of the economic crisis is amplyreflected in company results, measured boththrough economic profitability over assets

with an average of 1.3% in 2012 and,especially, through the financial profitability,

with a negative ratio of 4.7%, the reflectionof a net companies result that was alsonegative. It must be stressed that the declinein the construction sector during this period

was an important burden in overall companyresults.

2012 Average number of employees per company 100.0 Average assets per company (millions of euros) 39.2

Turnover per company (millions of euros) 25.1 Turnover per employee (thousands of euros) 250.8 Average cost per salaried worker (thousands of euros) 37.0

Current assets/current liabilities 1.16 Own funds/Balance 32.7% Debt with cost /Own funds 76.0% Coverage of indebtedness (EBITDA/Financial expenses) 1.55 Debt/EBITDA 7.80

Profitability of own resources (EBIT/Own funds) 3.8%

Economic profitability (EBIT/Assets) 1.3% Financial profitability (Net benefit/Own funds) -4.7%

Principaleconomic-financialratios.

Medium-sizedcompanies *

Source:


according to data from INFORMA

* The real estate and financing

sectors are excluded.


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2008 2009 2010 2011 2012 Average number of employees per company 98.1 98.8 98.7 99.4 100.0Average assets per company (millions of euros) 27.5 30.1 33.0 34.3 39.2Turnover per company (millions of euros) 23.6 21.8 23.7 23.8 25.1Turnover per employee (thousands of euros) 240.8 221.0 240.2 239.2 250.8 principales ratios. Average cost per salaried worker (thousand of euros) 34.0 34.9 35.6 36.4 37.0 Empresas medianas*

Current assets/ Current liabilities 1.27 1.30 1.34 1.30 1.16 Source: Own funds/Balance 34.0% 33.9% 33.0% 33.2% 32.7% Crculo de Empresarios, accordingDebt with cost/Own funds 84.6% 80.8% 82.7% 79.4% 76.0% to INFORMA data Debt coverage (EBITDA/Financial expenses) 1.75 2.86 3.28 2.87 0.77Debt/EBITDA 4.86 5.50 5.19 5.16 7.80 * Excludes the real estate and

Profitability of own resources (EBIT/Own resources) 10.7% 7.9% 9.4% 9.1% 3.8%financial services sectors.

Economic profitability (EBIT/Assets) 3.6% 2.7% 3.1% 3.0% 1.3%Financial profitability (Net benefit/Own funds) 5.3% 4.6% 5.5% 4.3% -4.7%

In any case the coverage ratio is worsening as a consequence of a steeper fall in EBITDAthan in financing costs during the period andthe debt to EBITDA ratio has picked up,reflecting companies declining ability toservice their debt through profit generation.

In conclusion, The latest available data reveals that 2012 canbe considered as the year of company survivalbecause it produced the greatest damage tothe business fabric and the most notable dropin company results. In any case, the medium-sized companies that have survived arelarger and more productive.

Thus, during this crisis phase the Spanishmiddle-sized company has beenstrengthened in terms of size , as measuredby the average number of employees, averageassets per company and average business

volume.

The middle-sized company has increased itsproductivity in recent years, as reflected in the

accumulated increase in the turnover peremployee: 4.2% during the 2008-2012 period,

when it surpassed 250,000 euros.

The largest companies were the most profitable ones: in spite of the setbacks ofthe crisis years they had an EBIT/Assets ratioof 3.7%. For the medium-sized companies theratio was 1.3%, and for the small ones it was0.5%.

In spite of the volatility of the ratios used inrecent years, they demonstrate some hardfacts: the strengthening of the middle-sized

company in terms of size, the increase in productivity , and the deterioration ofresults during the crisis years.

Companies of 50 to249 employees.Development of theprincipal ratios.Medium-sizedcompanies*


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PART II

AnalysisMonographs


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,;..tJ'

\

., ,l.


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Part II: Analysis Monographs 27

Part II: Analysis Monographs

MONOGRAPH 1. Analysis of real productivityin Spanish companies 2009-2012*

1. Methodology

In the Annual Report on the Spanishmedium-sized company that we published inOctober of 2013, we estimated the impact onproductivity that might come about through arestructuring of the business fabric by size.

The aim of this present report is to examinethis effect sector by sector. To do so, we haveapplied the shift-share method 7, which makes itpossible to break down growth in realproductivity as the sum of two factors (see theannex for more details):

The intersectoral effect measures the variation in aggregate productivity that isexplained by the variation in productivity ofthe companies in each sector.

Structural change measures the variationin aggregate productivity caused by the

the recomposition of production factorsamong the different economic sectors. Inother words, if the composition ofemployment does not vary over the courseof the period being analyzed, this effect

would be null. Likewise, this structural effectcan be broken down into a static part (thatmeasures the variation in productivityexplained exclusively by the change insectorial employment) and a dynamic part,

which will have a positive effect if theproduction factors have been reassigned tothose sectors with greater gains inproductivity, and a negative one if the weightof employment has increased in the sectors

with lower gains in productivity.

Variation in productivity =

Intersectoral effect + Structural change (static + dynamic)

* Drawn up by Mnica Correa (economist for the Spain Unit of BBVA Research) and Yolanda Fernndez (Technical Director ofthe Project for the Spanish Middle-sized Company of the Crculo de Empresarios and a professor at the eFEF).

7. The methodology has been implemented by the work team of BBVA Research.


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productividad por tamao empresarial

In short, if the Spanish economy has increasedits overall productivity, this methodologyallows us to distinguish just what part theproductivity of our companies is the result of

an advance in the productivity in its differentsectors, and what has been the effect on thechanges in employment among the differenteconomic sectors.

2. Development of real productivity of the companies bysize and sectors

To measure productivity in real terms,

eliminating the effect of inflation, we haveused the figures for GVA (Gross Value

Added) published by Eurostat and we havecalculated the corresponding deflators on asectorial level from information published bythe INE 8. In this way it is possible to obtainan approximate average of total productivityand of productivity by size groups of Spanishcompanies. The results of this analysis againequate increased productivity withcompany size: the GVA per employee in

the medium-sized and large companies isnotably greater than the average productivity,calculated at 40,000 euros for the totalbusiness fabric in 2012.

As can be seen in the chart, the greatestincrease in productivity over the 2009-2012

period came in the medium-sizedcompany segment, which registered anaccumulated growth of 6.3%, followed by thelarge companies, which increased their GVAratio per employee by slightly more than 4%during the period that was analyzed.

Based on available information, the sectorsanalyzed were: industry, construction, energyand different branches of the service sector.By breaking down productivity in thesesectors we can see that independent ofcompany size the firms in the energy,industry and information and communicationssectors had higher-than-average profits duringthe 2009-2012 period. By contrast, variationsin productivity in the hostelry, trade andprofessional services branches were below theaverage.

Evolucin de la GVA/employee(1) Accumulated Var. Annual Var.

2009 2012 % %

(1) miles de euros en trminos Micro-companies (0-9 employees) 26.21 26.65 1.7% 0.56% reales (ao base 2008) Small companies (10-49 employees) 38.16 39.05 2.3% 0.78%

Medium-sized companies (50-249 employees) 45.33 48.18 6.3% 2.10% Large companies (more than250 employees) 54.55 56.79 4.1% 1.37%

Total companies 38.41 40.05 4.3% 1.42%

8. The deflators have been calculated by the BBVA Research work team.

Development ofproductivity by

company size

(1) thousands ofeuros in realterms (baseyear 2008)


and BBVA Researchaccording to INE

and Eurostat data


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Energy and wastemanagement

Informationand communications

Industry

Construction

Transport and storage

Professional activities

Commerce

Other services

Hostelry

0 20 40 60 80 100 120 140 160 180 Productividad real por sectores (miles de Euros) Total empresas. Ao 2012

Source:


and BBVA Research

according INE and Eurostat

data

-4% -2% 0 2% 4% 6% 8% 10% 12% 14% 16% Variacin acumulada

Energy and waste management

Information andcommunications

Industry


Construction

de la productividad por sectores. Total empresas. (2009-2012)

Source:


and BBVA Research according to

INE and Eurostat data


Commerce

Hostelry

Other servicies

Variacin mediatotal sectores

Cumulative variationof productivity bysectors.Total companies

(2009-2012)

Average productivity allsectors

Total average variationsectors

Real productivi ty bysectors (thousands ofeuros) Total companies.Year 2012


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3. Breakdown of productivity gains

Descomposicin del

The analysis of the companies as a wholereveals an annual increase of real GVA peremployee of 1.42%: there is a high increasein productivity among medium-sizedcompanies (greater than 2% annual) and, to alesser degree, among the large ones. For theirpart, the smaller companies lost were lessproductive during the 2009-2012 period, whichhas widened the productivity gap betweencompanies of different sizes.

This increase in productivity was led in all thecompany groupings by the intersectoraleffect: in other words, by the increase ininternal productivity in each sector . In themedium-sized companies, if employment bysector had not varied during the period underanalysis, the annual increase in productivity

The remodeling of the sectors of industry, andespecially construction, explain in part thenegative nature of the structural change, since inthese sectors the drop in employment has beengreater than in other sectors with lower levels ofproductivity such as commerce and hostelry. Inthis way, the weight of employment in thecommerce sector has risen almost 2 percentagepoints during the 2009-2012 period, to 28% oftotal employment, and in hostelry the rise wasalmost 1 percentage point, to 11% of the totalnumber of salaried workers of all companies in2012.

Based on the available breakdown by sectors,the most productive medium-sized companiesare in the following sectors: energy,information and communications, and profe-

crecimiento de la productividad:

Total empresas, 2009-2012

(in annual % )

Notes: Productivity is calculatedas real GVA per employee.

Increase in Intersectoral Structural Static Dynamicproductivity sector change effect effect

Micro companies (0-9 employees) 0.56 1.17 -0.62 -0.67 0.05 Small companies (10-49 employees) 0.78 1.13 -0.35 -0.38 0.03 Medium-sized companies (50-249 employees) 2.10 2.44 -0.34 -0.29 -0.05 Large companies (more than 250 employees) 1.37 1.69 -0.33 -0.26 -0.07

The data for nominal GVAand employment are

provided by the EuropeanCommission (2014).

The implicit deflators ofthe GVA have been

obtained from National Accountancy (2008 base)

published by the INE.

Source:

Crculo de Empresarios and

BBVA Research according to


all other things being equal would be2.44%, as a reflection of the productivity gainsin each of the sectors analyzed.

The analysis by company size reveals that thefirms with fewer than 10 employees are theones that suffer the most from structuralchange. This negative impact is explainedbasically by the recomposition ofemployment in the less productive sectors (static effect), since the dynamic effect is

practically null in all typologies. In other words,employment has not been redirected towardthose sectors with the greatest increases inproductivity.

ssional activities, which register levels of realGVA per employee of more than 60,000euros in 2012. The companies in industry,construction and transport also were able toraise their productivity above the totalaverage. At the opposite extreme are thecompanies dedicated to commerce, hostelryand other services, with the smallest advancesin productivity.

Statistical breakdownof the i ncrease in

productivity: Totalcompanies, 2009-2012


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Professionalactivities

Construction

Industry

0 20 40 60 80 100 120 Productividad real por sectores de laempresa mediana.(miles de Euros). Ao 2012

Source:


and BBVA Research according to


Transportand storage

Comercio

Hostelry

Other services Productividad media total sectores

The medium-sized companies achievedincreased productivity of 6.3% in the 2009-2012period, led by the energy and informationand communications sectors . As he havestated,

during the 2009-2012 period the structuralchange in the medium-sized companies has hada negative, though very moderate, effect.

-4% -2% 0 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Variacin acumulada de la productividad Energy and waste

management


Construction

Industry

Proffesional activities

Commerce

por sectores.

Empresas medianas(2009-2012).

Source:


and BBVA Research

according to INE and Eurostat

data

Transport

and storageHostelry

Other S ervices Variacin mediatotal sectores

Real productivit y bysectors in the medium-sized company(thousands of euros).Year 2012

Average productivity allsectors

Total average variationsectors

Distribution ofemployment inmedium-sizedcompanies


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Distribucin del empleo en las

empresas medianas

Source: Crculo de Empresarios

and BBVA Research according

INE and Eurosta datat


Industry

Construction

Commerce

0 5% 10% 15% 20% 25% 30%

1.5% 2.2%

28.2% 27.3%

14.8% 9.7%

18.2% 19.7%

Hostelry




Other services

7.7% 8.5%

6.6% 7.0%

4.8% 5.4%

6.4% 7.0%

11.8% 13.2%

YEAR 2009

YEAR 2012

In synthesis, the results of the analysisdemonstrate that the growth in real

productivity , measured as the GVA peremployee, was very high and was led by theinternal gains within each sector . In addition,as might have been expected, the results confirmthat structural change has a negative effect as aresult of the remodeling of sectors likeconstruction.

In any case, the negative impact on productivity

is very moderate, and was not able to erodeintersectoral gains. This negative situation isexplained by the loss in relative weight of the

industrial and construction sectors, and to greateremployment in the less productive serviceactivities such as hostelry and commerce.Specifically, in 2009 the weight of employment inmedium-sized companies in the industrial andconstruction sectors was 43%, a figure thatdropped to 37% in 2012. In 2009 the commerce,hostelry and other services sectors accounted for38% of total employment, a figure that grew to41% three years later.

ANNEX:Descomposicin del crecimiento de la productividad en efectos intrasectorial, esttico y dinmico:

Donde es la productividad del sector i (i=1,, n sectores) en el ao inicial t en relacin conla productividad agregada, es el peso del empleo del sector i en el total y T hace referencia alao final del perodo analizado.

Distribution ofemployment inmedium-sized

companies

Where is the productivity of the sector i (i=1,, n sectors) in the initial year t in relation

to aggregate productivity, is the weight of employment of sector i in the total and T refersto the final ear of the eriod anal zed.


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In conclusion, Spanish companies as a whole increased theirproductivity in the 2009-2012 period by a yearly1.4%, and the medium-sized companies werethe ones with the greatest gains, some 2.1%annually.

The increase in real productivity, measured asthe GVA per employee, was very high and

was led by internal gains within each sector. The Spanish medium-sized companies arethe ones that registered the greatest increasesin intersectoral productivity , especially inthe sectors of energy and information andcommunications.

The breakdown of productivity figures showsthat the increase in productivity was led bythe intersectoral effect , whereas structuralchange has a very moderate negativeimpact on all kinds of companies.

The most productive sectors lose weightin employment among companies as a wholedue to the remodeling of sectors such asconstruction.

During the period under analysis, Spanishcompanies have combined gains inintersectoral productivity with a negativestructural change, with the medium-sizedcompanies registering the greatestadvances.


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MONOGRAPH 2. Factors of businesscompetitiveness: exporting propensity andcapacity for innovation *

1. Introduction

The present edition of this Report bringssomething new : an analysis of informationfrom the INE about exporting and innovationin Spanish medium-sized companies. Thisanalysis indicates that company size is animportant factor when opening orconsolidating overseas markets and inhaving a capacity for innovation . To carry itout we have used detailed information aboutthe companies, based on their respectivenumbers of salaried workers, which has beenprovided by the INE: the Industrial Poll, the

Annual Poll on Services, and the Poll onCompany Innovation.

According to the DIRCE (Central Directoryof Companies), in 2008 there were around26,000 Spanish medium-sized firms, a figurethat dropped to 19,000 in 2013. The changesin billing of the medium-sized companiesdemonstrates during the crisis years theincreasing importance of those firms that hadthe highest billings. Companies with billingsof more than 10 million euros had aparticipation of 37% in the 2013 total, asagainst the 32% at the start of this period(2008).

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

5% 28%

37%

31%

7% 30%

33%

29%

MORE THAN50 M

LESS THAN2 M

Distribution ofmedium-sized

companies by billing . Differences between2008 and 2013

Source:


according to DIRCE data from

INE

0% 2008 2013

* Prepared by Yolanda Fernndez with information provided by the INE.

2-10 M

10-50 M


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2. Exporting development of companies in theindus trial sector

To compare exporting capacity 9 by companysize, we have calculated the figure for overseas salesas a part of total sales of firms ranked by theirnumbers of salaried workers. The results show thatthe largest companies are the ones thatachieve a larger percentage of their billingsthanks to exports . Thus overseas sales figures forthe middle-sized and large companies are greaterthan 30% of their total sales, whereas in thecompanies with fewer than 50 employees thispercentage is 14%. As for export developmentin recent years, there is a notable advanceamong medium-sized companies: in 2008 aquarter of their total sales were overseas,

and in 2012 a third of these total sales wereexports , a proportion similar to that of thebig companies.

It should also be noted that, while the totalturnover in the period 2008-2012 has dropped,for both the medium-sized companies and thelarge ones (-8.5% and -7.8%, respectively) thefigure for overseas sale has significantly increasedduring this period. Specifically, the medium-sized companies have increased theseoverseas sales by 13,8% during the five-year

period 2008-2012 , and the large companies by6.6%.

Overseas sales asa part of total sales.

Industrialcompanies ranked by

size according tonumber of

employees .

Source:


according to data from the INE

35%

30%

25%

20%

15%

10%

5%

0%

10%

2008

2012

14%

25%

32% 29%

33%

FEWER THAN50 EMPLOYEES

FROM 50 TO 249

250OR MORE

9. Exporting propensity refers to variations in the ratio of overseas sales as a part of total sales.


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4. Technological innovation in the countries

Innovation is considered to be all kinds ofactivities of a scientific, technological,organizational, financial and commercialnature, including investment in new knowledge, thatare applied or could be applied . Based on thisdefinition, two kinds of innovations can beidentified: technological and non-technological.

Technological innovations include the newproducts (goods or services) andtechnologically new processes as well as theirtechnological improvements. Something isconsidered an innovation when it has beenmarketed ( product innovation) or has beenused in producing goods or providing services(process innovation). They include the sevenfollowing activities:

Scientific research and technologicaldevelopment (internal R+D).

Acquisition of R+D (external R+D). Acquisition of machinery, equipment,

advanced hardware or software to be usedin new or significantly improved productsor processes

Acquisition of other outside knowledgefor innovation.

Training for innovative activities. Introduction of innovation in the market. Design and other preparations for

production and/or distribution.

Non-technological innovations include newmethods for the marketing of products (goodsor services) or new methods of organizingcompany business practices, as well assignificant improvements in already existingmethods.

From the point of view of technologicalinnovations (in products or processes) andnon- technological ones (in organization ortrade), 25.9% of Spanish firms with 10 ormore salaried workers were innovators in the2010-2012 period. In any case, the

percentage of innovative firms increasedsignificantly in proportion to company size,more so than in the area of exports. Thus fullyhalf of the large companies can beconsidered to be innovative in eitherproducts and processes (387% of the total) or

Percentage of

innovative companiesaccording to

size. Average

percentage during

2010-2012 Source:


according to the INE Poll on

Company Innovation

60%

50%

40%

30%

20%

10%

0%

23.6%

INNOVATORS

INNOVATION TECHNOLOGICAL

NON-TECNOLOGICAL INNOVATION

35.3%

50.0%

SMALL MEDIUM-SIZED LARGE


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in non-technological applications (39.5%). Asfor medium-sized companies , 35.3% areinnovators , and the percentage of firms that

apply technological innovations is around22%, some 16 percentage points less than inthe companies with more than 250 employees.

In conclusion, The medium-sized companies in the industrial sector are the ones that show the greatest growth in overseas salesas a proportion of total sales. In 2008, a quarter of theirtotal billings were overseas, and in 2012 the figure hadrisen to one-third, a proportion similar to that of thebig companies.

The industrial firms achieve a larger percentage of theirbillings overseas than do the services companies, of any

size.

In the services sector, the medium-sized companiesare the ones that demonstrate the greatest ratio offoreign sales as a share of total sales, one that ishigher than that of the large companies.

In the commerce sector, it is again the medium-sizedcompanies that get a larger part of their billingsoverseas. In 2012 they had a ratio of overseas sales to totalsales of 13%, while for the large companies the figure was7.4%.

The percentage of innovative companies increasessignificantly in proportion to size, even more so thanin the case of exports. Half of the large companies can be

considered innovators, as against 35.5% of the medium-sized companies and 23.6% of the small ones.


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PART III

Statistical sourcesfor

business analysis


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Part III: Statistical sourc es for business analysis 43

Part III

Statistical sources forbusiness analysis

Updating available information for the analysis ofthe business situation

Statistical sources

INE (Nation al Institut e of Statistic s)

DIRCE (Central Directory of Companies). Statistics on Trading companies. Harmonized data in business demography. Industrial Poll of Companies. Poll on Services. Poll on Commerce. Poll on Company Innovation. Poll on company use of ICT and electronic

commerce. Statistics on Subsidiaries of Foreign

Companies in Spain. Statistics on Subsidiaries of Spanish

Companies overseas.

The Central Directory of Companies(DIRCE) groups in a single informaticssystem all the Spanish companies and theirlocal units in Spain. The basic aim is to carryout economic polls. It is updated once a yearand presented on January 1.

A statistical summary is published of theresults for companies and their local units,classified by Autonomous Communities, andby the firms legal status, main economicactivity, and number of workers. The DIRCEalso generates information with regard to: newcompanies and others that cease activities,

which are also grouped by legal status, maineconomic activity, and number of workers.


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DIRCE DATA FOR1 JANUARY 2013

Distribucin por tamao

y facturacin de las empresas espaolas

Nota: El DIRCE recoge adems

1,68 millones de empresas sin

asalariados.

Fuente: DIRCE 2013 (INE)

The latest data published by the INEcorresponds to January 1, 2013, and reveal thatthere are 3.14 million active companies, of

which 1.68 do not have salaried workers. In thedistribution by size of companies with salaried

workers which has remained very stable withrespect to the previous year it can be seen thatthe companies with fewer than 10 employeesmake up 90% of the total number. Likewise, in2013 some 95% of Spanish companies withsalaried workers had income of less than 2million euros.

Statistics of Trading Companies

These statistics offer monthly informationabout trading companies that have beencreated, firms that have been dissolved, andthose where there has been a change incapital. Data is obtained by provinces, by

Autonomous Comm and on the overallnational level including Ceuta and Melilla-

from the Central Business Register.

The INE statistics for trading companiesshow an increase of 7.1% in the number offirms created in 2013, the largest gain sincethe start of the crisis. The number ofcompanies that were dissolved rose to 24,735(8% of them due to mergers), whichrepresents an increase of 9.1%. Thus the net

creation was 68,628 new firms, 6.4% morethan in 2012.

Harmonized data in businessdemography

The general aim of the harmonized data inbusiness demography is to provide aggregateinformation about the population of companiesin Spain, taking into account those aspects havingto do with company dynamism and applying a

methodology that has been agreed upon in theEuropean Union.

Spanish companies

ranked by size andbillings

Note:The DIRCE also records 1.68

million companies without salariedworkers

Source:DIRCE 2013 (INE)

STATISTICS ONTRADING

COMPANIES.

Companies cr eated

and dissolved

Source:Trading Companies

Micro (with salaried workers) Small Medium-sized LargeFrom 1 to 9 From 10 to 49 From 50 to 249 More than 249 TOTAL

N of companies 1,326,618 113,148 18,979 3,822 1,462,567% of total 90.70% 7.70% 1.30% 0.30% 100.00%

Billing (millions of euros)Less than 2 mill. 1,303,834 77,967 5,568 510 1,387,879From 2 to 10 mill. 20,582 29,695 6,353 473 57,103From 10 to 50 mill. 1,972 5,009 5,689 1,179 13,849More than 50 mill. 230 477 1,369 1,660 3,736

2012 2013 Variation

N trading companies created 87,182 93,363 7.10%

N trading companies dissolved 22,666 24,735 9.10%

Voluntary 15,920 17198 8.00%

Merger 2,045 2,004 -2.00%

Other causes 4,701 5.533 17.70%


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Distribucin del 35 personal ocupado y

30 cifra de negocios.

Ao 2012 25

Source: 20

Encuesta Anual de

Servicios del INE15 14

10 7

5

0

EMPLOYEES 33

28 TURNOVER 28

23

1719 18

13

NO SALARIEDWORKERS

MICRO (0-9)

SMALL (10-49)



and makes it possible to obtain resultsthat are broken down by AutonomousCommunity and size of company as measuredby number of employees.

Poll on Commerce

The Annual Commerce Poll studiescompanies engaged in the sale and repair ofmotors vehicles and motorcycles, retail trade,

wholesale trade, and business intermediaries.In 2012, all medium-sized and largecompanies dedicated to this commercerepresented only 0.5% of the total number of

companies, although they accounted for32.6% of employment and more than 46% ofthe total billings in this sector.

Poll on CompanyInnovation

The Poll on Company Innovation offersindicators on different aspects of this process.

The study was directed to a sampling ofmore than 39,000 companies with 10 ormore salaried workers in the industrial,construction and services sectors . Since2006 the study has included the agricultural,

Distribution of

the number ofcompanies,

employees andturnover.

Year 2012

Source: INE Annual Commerce Poll

60

49.6 50

40

30

20

12 10

0

5.2

45.5

36.5

24.9

4.2

NUMBER OF COMPANIES

EMPLOYEES

TURNOVER

23.5 18.9

16.3

9.7

0.4 0.1

22.9

30.1

FEWER THAN2 WORKERS

FROM 2 TO

9 WORKERS SMALL (10-49)


LARGE (More than 250 )

Distribution ofemployees and

turnover.Year 2012

Source:INE Annual Poll on Services


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livestock, hunting fishing and forestry areas.

Poll on company use of ICT andelectronic commerce

This Poll presents information to measure theuse of ICT and electronic commerce atcompanies in the European Union. Followingthe methodology recommended by Eurostat,the poll considers a twofold time scope: the

variables on the use of ICT refer to January of2013, while the period of reference for generalcompany information, electronic commerceand ICT training is from 2012. The studysurveyed 15,423 companies of 10 or moreemployees and 10,667 firms of fewer than10 workers located in Spain.

Statistics on Subsidiaries ofForeign Companies in Spain

The Statistics on Subsidiaries of ForeignCompanies in Spain ( FILINT ) comes outeach year with the aim of providinginformation about the principalcharacteristics, economic indicators, structureand activity of the subsidiaries of foreigncompanies operating in Spain, in both theindustrial and services sector .

According to the most recent report publishedby the INE, in 2011 there were 8,986subsidiaries of foreign companies in thesectors of Industry, Commerce and OtherServices not involving the financial markets.

These companies generated a turnover of422,347 million euros and employed 1,235,250persons. The subsidiaries of foreign firms inSpain in these sectors represented 0.5% ofthe total number of companies .

The turnover and employment they generated were, respectively , 26.0% and 12.4% of thetotal.

Statistics on Subsidiaries of SpanishCompanies Overseas

The Statistics on Subsidiaries of SpanishCompanies Overseas (FILEXT) comes outeach year with the aim of providinginformation about the principal variables thatdetermine the structure and activity of thesesubsidiaries of Spanish companies. It includessubsidiaries whose principal activities are in

the fields of Construction, Commerce, andNon-financial Services. This information isbroken down by activity, size and country orgeographic area of the subsidiary firm.

In 2011 there were 4,183 Spanish subsidiariesoverseas in the sectors of Industry,Construction, Commerce and Other Services.

They generated a turnover of 198,330 millioneuros. With regard to employment, theyprovided 788,356 jobs. The Services sector

was the largest one among these overseasfirms (32.2%), generating 39.0% of thetotal turnover and employing one of everytwo people working in all these subsidiaries.


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Bank of Spain

Annual Central Balance Sheet The Annual Report presents information about the balances and profit and loss accounts ofnon-financial companies in 2012, based on a sample of more than 7,300 companies (30% ofthem middle-sized) that voluntarily take part and that represent 27% of the GVA generated byall Spains non-financial firms.

CENTRAL DEBALANCES ANUAL Small Medium-sized Large TOTAL

(CBA). 2012 Fewer than 50 empl. From 50 to 249 Mmore than 250 Distribucin por

tamao de las N companies 3,743 2,233 1,399 7,375 empresas espaolas % of total 50.8% 30.3% 19.0%

Fuente: N employees 66,000 209,000 1,914,000 2,189,000 Central de Balances del Banco % of total 3.0% 9.5% 87.4%

de Espaa

This information is complemented by an analysis of the results of the small and medium-sizedSpanish non-financial companies. It was drawn up based on the annual accounts deposited atbusiness registers (CBB). Regarding the CBB database, it has information about 470,000companies with employees, of which some 10.000 firms are medium-sized, or 2.2% of the total.

ANNUAL CENTRALBALANCE SHEET.

2012Breakdown by si ze of

Spanish companies

Source:Central Balance Sheet of the Bank of

Spain

CBB INFORMATIONON PYMES (*). 2011 Distribution

of Spanishcompanies by size

Source:

Central Balance Sheet ofthe Bank of Spain

(*) Integra la informacin delas cuentas depositadas en los

Registros Mercantiles

Micro Small Medium-sized Large TOTALUp to 9 empl. From 10 to 49 From 50 to 249 More than 250

N of companies 373,804 85,569 10,205 1,399 470,977% of total 79.4% 18.2% 2.2% 0.3%

N employees 1,072,000 1,276,000 633,800 1,914,000 4,895,800

% of total 21.9% 26.1% 12.9% 39.1%


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Directorate-General of Indus try and th e Small and Medium-sized Company (Pyme)

Pyme Figures Each month the Directorate-General of Industry and Pyme releases a report, titled PymeFigures. (Pyme is the acronym in Spanish for Small and medium-sized companies). It isbased on data provided by the Ministry of Employment and Social Security about companiesregistered in the Social Security system. In addition to the number of companies ranked by size,there is information about the workers in companies with employees.

Portrait of the Pyme Each year the Directorate-General of Industry and Pyme also releases a comparison of the datathat is published annually in the DIRCE (Central Directory of Companies), which makes itpossible to analyze the situation among companies depending on their size, sector orgeographical location. The latest report analyzing this DIRCE information dates from January1, 2013.

SEPI Foun dation

The Poll on Business Strategies (ESEE) Each year the SEPI Foundation carries out a poll aimed at industrial and manufacturingcompanies located in Spain, and called the Poll on Business Strategies (ESEE, in Spanish). Theorigin of the ESEE is the agreement signed in 1990 between the Ministry of Industry and theSEPI Foundation, which took responsibility for designing, controlling and carrying out the poll.It surveys companies with 10 or more workers in what is usually known as the manufacturingindustry. It includes all of Spain and appears annually.

Summary of the ESEE questionnaire: Activity, Products and Processes. Clients and Suppliers. Costs and Prices. Markets served. Technological activities: questions about R+D activities, patent registration, innovations in product

and price, and payments for and income from licenses and technical assistance. Overseas Business. Employment. Accounting data.


N of companies 1,025 122,638 20,972 4,227 1,172,945% of total 87.4% 10.5% 1.8% 0.4% 100%

N employees 2,595,200 2,385,700 2,069,300 5,013,200 12,063,400

% of total 21.5% 19.8% 17.2% 41.6% 100%

Companies and

salaried workersregistered at SocialSecurity. Apri l 2014

Source:Pyme figures


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Tax Ag ency

Data on overseas business by company characteristics As of June of 2014, the Department of Customs and Special Taxation has published thestatistics on overseas business according to the principal characteristics of the companies: the

volume of this trade and the number of export and import firms according to their economicactivity as determined by the National Classification of Economic Activities (CNAE). Also thenumber of employees, the number of companies with which there are exchanges, the volume ofexports and imports, etc.

To obtain the additional information necessary to draw up these statistics, the procedure hasbeen to compare the information foreign trade with that provided by DIRCE.

The latest published data, from 2011, when compared with that from the previous year,highlights the increasing importance of the medium-sized companies in the overseassector . Thus the number of medium-sized exporting companies increased by 1.7% and theiroverseas turnover rose by 18%: the participation of these firms in the total export figure rose to24%. In other words, a quarter of the value of Spanish exports in 2011 corresponded tomedium-sized companies.

Number de companiesand volume of exports

by company size.STABLE EXPORTING

COMPANIES (*)

Source:Tax Agency

(*) Stable companies: those that duringthe referenced year, and in the threeprevious ones, presented the Intrastat

or the Single Administration Document(SAD).

Annual v ar.% of all

companies 20112010 2011

Micr o (0-9 employees) 15,624 16,086 3.0% 45%Small (10-49 employees) 13,116 13,127 0.1% 36%Medi um-sized (50-249 employees) 5,195 5,283 1.7% 15%Large (250 and more emplo yees) 1,493 1,487 -0.4% 4%

TOTAL 35,428 35,983 1.6% 100%

Annual v ar.% of all

companies 20112010 2011

Micr o (0-9 employees) 15,354 17,073 11% 9%Small (10-49 employees) 22,858 26,114 14% 14%Medi um-sized (50-249 employees) 38,057 44,971 18% 24%Large (250 and more emplo yees) 84,022 97,654 16% 53%

TOTAL 35,428 35,983 1.6% 100%

Number ofcompanies

Value export s(Mill )


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ICEX

The base of exporting companies Based on information from the Customs Department, ICEX (the Spanish Institute for Foreign

Trade) compiles a Profile of Exporting Companies as a whole and the so-called regularexporters group: those firms that have consistently exported over the past four years. TheProfile includes export figures, the geographic destination of exports, the products exported andthe different exporting sectors.

In 2013 the number of exporting firms rose to 150,992 from the 137,528 of the previous year. The number of regular exporting companies also grew: from 38,373 in 2012 to 41,163 in 2013, while more than 6,600 companies initiated or reinitiated exporting activity.

European Commissio n

Observatory of European Small and Medium-sized companies Based on information from Eurostat (provided by the different National Statistics Institutes) anannual report is published about small and medium-sized companies in the European Union. Itanalyzes their contribution to growth and employment in the 27 EU countries.

We analyze these statistics in the second part of the present study so as to be able to placeSpanish companies in the European context.

The most recent report includes estimates for 2014 about the number of companies, employeesand GVA for the companies as a whole and as ranked by size. For the EU-27 as a whole, it isestimated that there are 21.4 million companies, of which 1.1% are medium-sized, and that theyprovide 17.4% of employment and 18.2% of the GVA.

Eurostat data for EU-27 companies.Estimates 2014

Source:Eurostat


N of companies 19,676,714 1,403,820 233,051 45,457 21,359,042% of total 92.1% 6.6% 1.1% 0.2%

N employees 38,369,835 27,134,078 23,125,668 44,394,691 133,024,272

% of total 28.80% 20.40% 17.40% 33.40%

GVA (mill. euros) 1,304,396 1,116,462 1,115,659 2,578,162 6.114.679

% of total 21.3% 18.3% 18.2% 42.2%


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European Central Bank

BACH (Bank for the Accounts of Companies Harmonised) database The BACH project collects annual historical series (balances, income statements and significantratios) of non-financial companies in 11 European Union countries: Germany, Austria,Belgium, Spain, Slovakia, France, Holland, Italy, Poland, Portugal and the Czech Republic.

The data is presented in percentages and absolute values (assets, net turnover, added value andemployment figure) and a statistical distribution of ratios and structures (quartiles). This datahas been available since 2000 for the combination of 104 aggregates of activity and five sizecategories as defined by net turnover.

Countries N companiesSmall and medium-sized

N companiesLarge

N companiesTOTAL

BACHDatabase. 2011

SPAIN 353,722 1,709 355,431 AUSTRIA 63,047 1,730 64,777 BELGIUM 351,243 1,873 353,116 CZECH REP. 32,817 968 33,785 GERMANY 30,278 4,619 34,897

FRANCE 219,770 6,222 225,992 ITALY 33,613 4,727 38,340 POLAND 52,002 1,601 53,603 PORTUGAL 361,220 727 361,947 TOTAL 1,497,712 24,176 1,521,888

CompNet (Competitiveness Research Network) Database In February of 2014 the European Central Bank (ECB) published a document about the newdatabase called CompNet. It contains information about the business balance sheet ofcompanies in 11 EU countries, broken down into 58 sectors, for the 1995-2011 period. Usingthis information, it was possible to devise some homogeneous indicators about business

productivity and competitiveness, ranked by company size.

N companies N companies N companies %Total More than 20 employees More than 20 employees

SPAIN 245,121 22,770 9%

BELGIUM 66,842 7,757 12%

CZECH REP. 21,156 11,470 54%

SLOVAKIA 3,954 3,446 87%

SLOVENIA 16,676 2,123 13%

ESTONIA 12,186 1,849 15%GERMANY 30,688 22,401 73%

FRANCE 348,179 55,004 16%

ITALY 53,054 21,476 40%

POLAND 6,250 6,250 100%TOTAL 804,106 154,546 19%

Countries CompNetDatabase. 2011


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INFORMA

Iberian Balance Sheet Analysis System (SABI) This is an economic-financial database drawn up by INFORMA D&B in conjunction withBureau Van Dijk. It includes information about 1,247,469 Spanish companies (674,295 of them

with balance sheets at the end of 2011). Among its principal advantages: it has ample coverageof the DIRCE population and disaggregated data about each individual company, which makesit possible to identify specific firms and compare them with official statistics, which are verycomplete but anonymous. It also provides periodically updated information the companiesdeposit with the Business Registers.

For that reason we use this database in section two of the present report, which analyzes the economic-financialdevelopment of Spanish medium-sized companies during the 2008-2012 period.

AMADEUS database This is a database of economic-financial information about some 20.6 million Europeancompanies in 43 countries. In the case of Spain, it is fed by INFORMA D&B.

ORBIS databaseORBIS is a financial database, in a standardized format that makes it compatible, about more

than 123 million companies all over the world (including banks and insurance firms).

ORBIS includes informationabout:

66 million companies in Europe. 23 million companies in North America. 13.2 million companies in South and Central America. 19.1 million companies in Asia, the Middle East and Oceania. 1.3 million companies in Africa.


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2011 2012 2013 Var. 13/12 Source

N of companies cr eated 84,812 87,182 93,363 7.1% Bus. Registers

N of companies dis solved 19,784 22,666 24,735 9.1% Bus. Registers

Net companies created 65,028 64,516 68,628 6.4% Bus. Registers

N companies (w. salaried workers) 1,453,108 1,432,090 1,462,567 2.1% DIRCE- INE

Micro (1-9 employees) 1,297,971 1,286,587 1,326,618 3.1% DIRCE- INE

Small (10-49 employees) 130,448 121,601 113,148 -7.0% DIRCE- INE

Medium-sized (50-249 employees) 20,888 20,108 18,979 -5.6% DIRCE- INE

Large (more than 250 employees) 3,801 3,794 3,822 0.7% DIRCE- INE

N of companies in S. Secur. 1,210,527 1,171,844 1,158,338 -1.2% Min. Em ploym ent

Micro (1-9 employees) 1,053,987 1,025,848 1,014,940 -1.1% Min. Em ploym ent

Small (10-49 employees) 130,039 121,111 118,732 -2.0% Min. Employment

Medium-sized (50-249 employees) 22,097 20,698 20,475 -1.1% Min. Employment

Large (more than 250 employees) 4,404 4,187 4,191 0.1% Min. Employment

N of work ers in S. Secur. 14,362,154 11,998,300 11,914,600 -0.7% Min. Em ploym ent

Micro (1-9 employees) 2,669,500 2,571,000 2,549,200 -0.8% Min. Em ploym ent

Small (10-49 employees) 2,535,800 2,360,300 2,312,200 -2.0% Min. Em ploym ent

Medium-sized (50-249 employees) 2,181,700 2,051,700 2,030,100 -1.1% Min. Em ploym ent Large (more than 250 employees) 5,262,200 5,015,300 5,023,100 0.2% Min. Employment

MIDDLE-SIZED COMPANIES (50-249 employees)

N companies 16,561 15,484 15,502 0.1% EUROSTAT

N employees (persons ) 1,614,403 1,513,350 1,488,133 -1.7% EUROSTAT

Average N employees/com pany 97 98 96 -1.8% EUROSTAT

GVA (millions eur os) 79,497 73,358 73,433 0.1% EUROSTAT

Productivity (thousands euros) 49 48 49 1.8% EUROSTAT

Economic-financial ratios

Turnover per company (millions euros) 23.8 25.1 INFORMA Average ass ets per company (millions eur os) 34.3 39.2 INFORMA

Turnover per employee (thousands euros ) 239.2 250.8 INFORMA

Average cos t per work er (thousands eur os) 36.4 37 INFORMA

Own assets/Balance 33.2% 32.7% INFORMA

Economic profitability 3.0% 1.3% INFORMA

Annual variat ion in employment (EPA) -1.6% -4.3% -2.8% INE

Annual variat ion of real GDP 0.1% -1.6% -1.2% INE

Synthesis ofindicators ofthe Spanishmedium-sizedcompany



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PART IV

Contributions to company analysis

and proposals forreactivating the

business fabric


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Economi c Policy Internationalization and innovation of firms:evidence and policy 57 Panel Meeting (April 2013)

PwC / SIEMENS Keys to competitiveness inSpanish industry(September 2013)

Crculo de Empresarios The Spanish medium-sized company, 2013(October 2013)

World Bank Report on Doing Business 2014:Understanding the regulations for smalland medium-sized companies (October 2013)

BANK OF SPAIN Economic bulletin

Juan Ayuso:An analysis of the credit situation in Spain (October 2013)

European Commissio n2013 annual report about the small and medium-sized companies(November 2013)

Chambers o f Commerce Business perspectives 2014(December 2013)


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Part IV: Contributions to company analysis and proposals for reactivating the business fabric 61

BANK OF SPAIN Economic bulletin

Carmen Martnez y Maristela Mulino:The development of banking credit forcompanies according to their size (January 2014)

BANK OF SPAINEconomic bulletin

Antonio Rodrguez y Patry Tello:The impact of direct investment on productivity andemployment in the Spanish manufacturing se

the spanish medium-sized company-círculo de empresarios 2014 annual report

Documents