09 Annual Report
09 Annual Report 1 2
Duro Felguera, S.A. 2010 Design, desktop publishing and production: Multiplicamos las Ideas, (Gráfik Estudio) Printers: Eujoa Artes Gráficas. Aerial view of Puerto de Barcelona regasification plant (page 40) by courtesy of Enagas. Index 3
Letter from the Chairman & CEO 4 Main figures and Milestones 9 Evolution of Main figures 10 Balance sheet 12 Income Statement 14 2009 Milestones 16 Governing Bodies 18 Board of Directors 18 Committees 19 Company Structure 20 Evolution of Business 21 Stock Market Information 26 Activities by Business Segments 31 Duro Felguera Energía 32 Duro Felguera Plantas Industriales 36 Felguera - IHI 40 Felguera Montajes y Mantenimiento 42 Mompresa 44 Opemasa 45 Feresa 46 Montajes Eléctricos Industriales 47 Felguera Tecnologías de la Información 48 Tedesa 49 Felguera Calderería Pesada 50 Felguera Melt 52 Felguera Rail 53 Felguera Construcciones Mecánicas 54 International Presence 55 Corporate Responsibility Report 56 Directory 64 Corporate Governance Report 67 1 Letter from 4 the Chairman & CEO In 2009, Duro Felguera profit, order intake and backlog figures 5 registered record highs
Dear Shareholder: went from 7.5% to 9.3% which still places us over the average in our sector. It would seem obvious to say at the start of this letter, that we are going through hard times and Consolidated profits before tax also rose to 80 that the 2009 financial year was one of the million euros and profits after tax increased by hardest in living memory for most companies. 33.6% reaching a record figure for Duro Felguera But it would be equally strange to just disregard of 70.7 million. the subject not just because it has been extremely harsh and has conditioned our business over In 2009 Duro Felguera continued to increase the year, but also because it will continue to the stability of its balance of accounts and current affect business in general over the next few assets were reinforced by 33.4 million euros. years. Treasury remained at around 346 million euros and working capital finished the year at 116.3 In effect, we have been through a truly hard year million euros all of which shows a frankly positive which has put many companies to the test and, position of liquidity. where we are concerned, has measured the strength of our business model, based on The main development in the balance sheet engineering and construction of industrial plants during the year consisted in a substantial with an ever increasing, yet selective and prudent, increase in assets and short term debt due to international expansion. the major revenues from new large international contracts which in the near future should provide Well, despite such a sombre economic greater increases in treasury and sales. panorama, the 2009 financial year -the subject of this annual report- provided outstanding A more detailed analysis by segments continues figures. And they were outstanding not just to reflect the importance of the Major Projects because they reflect a substantial improvement area of the business within which Power Projects on the previous year's, but more significantly reached an income figure of 463 million euros, because they are in complete contrast with the and Industrial Plants 185 million. As a sum, times of depression and uncertainty we are these figures represent 67.5% of the group's going through. total turnover.
Whilst SERCOBE (national association of The income figures of the Specialised Services industrial equipment companies) estimates, segment which includes our erection, using data compiled from a wide sample of maintenance and operation companies, businesses, that 2009 was the worst year for increased to 212 million euros, 28% higher than our sector since statistical records exist, Duro the previous year, whilst Manufacturing with Felguera profit, order intake and backlog figures income figures of 99.7 million, showed a are at record highs and are indubitably better reduction of 19.4%. than last year's. In terms of EBITDA, the contribution made by Consolidated sales of 927.7 million euros, similar each segment as well as being positive was to figures in 2008, resulted in an EBITDA of 83.5 consistent with its sales. It is worth noting that million; a rise of 19.3%. Margins over sales Power Systems, with an operating result of 49.3 6
million euros, had a 52% share in consolidated at Claus C, for Alstom Power, in Holland; the EBITDA; Industrial Plants and Specialised manufacture of coke drums for Technip-France Services had 20% each, whilst the Manufacturing and a major extension of the Ferrominera Orinoco segment which represents 11% of income, had contract being carried in Venezuela. On the an 8% share in the total EBITDA. national market of note are two large liquefied natural gas tanks of 150,000 m3 capacity each In short, Duro Felguera has maintained notable for the Regasification Plant at El Musel (Gijón). growth rate figures in sharp contrast to the general trends of the economy, both the Spanish Our vision of the company has not changed in and international. the last few years meaning that we have been able to face this crisis with certain calm. In the But nothing of what has been said up to now sector where we operate, companies need to would be especially satisfying if this were due be forearmed in order to successfully confront to special circumstances or if it were any economic crisis, in the sense that business unsustainable. Yet the high order intakes over plans require a certain amount of time to take 2009 and derived from that, the backlog existing hold; something which the market and the at the end of the year, are sufficient reasons to current situation do not allow for. foresee that in spite of the general background And in our case, a decided direction towards of instability, Duro Felguera's business as a the international markets and specialisation in whole will continue to grow at the same levels large project management supported by of the last several years. providing services to industry are the factors that have allowed us to carry on growing despite In fact total order intake of the group doubled the declining economic scenario. last year's. We have closed 2009 with contracts totalling a value of 1,876 million euros which is Thus international sales reached peak levels for a new record figure for the company. the group, similar to the year before, representing
1 Letter from the Chairman & CEO 47% of income for the year and will surely As a consequence, backlog or works pending increase in 2010 and the following years as 90% execution, which is the same thing, at December of order intake in 2009 and 86.5% of backlog 31st was at 2,065 million euros. This contrasts at the end of the year came from markets abroad. once again with last year's 1,110 million and provides us with a reasonable outlook for future Furthermore, these figures confirm what we had income to remain at current levels over the next foreseen on other occasions: we must continue three years. our international expansion as the basic sectors of Spanish industry, power, mining, gas, oil, Furthermore, this backlog consists almost steel, etc., which had always been our main entirely of international projects which are customers, are no longer investing due to the expected to develop satisfactorily as they are downturn of the economy coinciding with an very similar to previous projects carried out by excess of installed capacity, a circumstance the company. Among them worth mentioning which will continue in the next few years. are: 1000 MW Termocentro combined cycle power plant for Electricidad de Caracas; the Having foreseen this occurrence, we have made 1 erection of three HRSGs and auxiliary equipment considerable efforts and strategic decisions in past years to penetrate and establish new Ingeniería Aplicada -E.I.A.XXI, S.A.- with over markets, signing major contracts in Brazil and 30 years experience and 200 professionals India which have allowed our entry into two operating in our business sectors. The aim is emerging economies with major potential for to reinforce the engineering area and in particular growth and which should be an importance to support the companies in the group managing source of business in the future for the group. turnkey projects in the power and industrial To this aim we have set up subsidiaries, opened sectors. sales offices and reached agreements with local partners in both countries to expand more On another subject, the development of Duro rapidly. Felguera on the Stock Market in 2009 was also highly positive, occupying fifth place in Also in Europe, where we have had a notable appreciation on the Spanish market and well presence in the last few years, we will try to above the main reference indexes. Our shares boost business in the United Kingdom in went up by 93.03% closing the year at 7.2 euros. particular where great prospects are to be had Capitalisation of the company reached 734.5 in the power sector and where we have been million euros, 354 million higher than last year, successfull in recent years. nearly double the average of the last six years and more than eight times above 2003. Working along these lines and trying to make the most of complementing traits whether technical, commercial or human, we have reorganised our companies. We have grouped together all the subsidiaries dealing with erection, Our vision of the company has not maintenance and operations into one unit or changed in the last few years segment - Specialised Services - and likewise meaning that we have been able to 7 with the workshops, all of which are located in Asturias, which have become the Manufacturing face this crisis with certain calm Segment.
But a company that has maintained a constant This growth has meant going from trading on growth over several years, could not have the Ibex Small Caps to trading on the more achieved this without making continuous selective Ibex Medium Caps, the index which investments in technology and innovation. groups together medium sized Spanish Last year 12 new projects got under way to companies. improve processes and products involving seven of the group's companies, universities and Our policy of creating value for the shareholder technological centres to the sum of 8.5 million meant increased payout which also situates euros. These projects have been supported by Duro Felguera ahead of other Spanish the Plan de Ciencia y Tecnología de Asturias companies, with greater yield per dividend and (Asturias Science and Technology Plan) or by higher payouts (65%). the Centro para el Desarrollo Tecnológico Industrial (CDTI) (Centre for Development of The company has paid out over the year a gross Industrial Technology). dividend of 0.3672 /share in four quarterly payments which has meant a profitability rate Of equal importance has been the acquisition of 6.07% over the year's mean share price, and of 35% of share capital with a call option for an almost 100% of total yield (yield per dividend additional 50% of the company Estudios de plus market appreciation). This also places the Our development on the Stock Market in 2009 was highly 8 positive, occupying fifth place in appreciation on the Spanish market
company fifth on the Madrid Stock Exchange we depend is of the first order. This has been General Index in terms of profitability for the proved over these last few years and will continue shareholder. so in the future.
The Board of Directors decided upon a payment Their commitment to the company is the greatest of three dividends charged to 2009 results, in guarantee for success and I just wanted to addition to the complementary payout to be express this as I thank you dear Shareholder proposed at the Annual General Shareholders for your renewed confidence in our company - Meeting, so the total dividend will rise to 0.4469 we will not let you down. euros and as a consequence the payout will reach 65%.
Despite the severe economic crisis we are going through, we are optimistic.This is because the direction we took seven years ago based on international expansion, innovation, complete project management and advanced professional training has proved to be successful. But above Juan Carlos Torres Inclán all because the team of professionals on which Chairman & CEO 1 Letter from the Chairman & CEO 1 2 Main figures and 9 milestones 2
Evolution of 10 main figures
Consolidated profit Consolidated profit before tax after tax Mill. euros Mill. euros 80 70.7 70.4 60.1 52.9 44.6 40.0 35.8 24.9 20.6
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2 Evolution of main figures
EBITDA Sales Mill. euros Mill. euros Domestic market 83.5 934.8 927.7 International market 849.7 70 63.3 436.2 317.5 566.4 432.1 44.1 511.2 180.8 190.3 21.7 491.5 532.2 502.7 320.9 385.6
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Order intake Backlog Mill. euros Mill. euros 1,876 2,065
1,003 1,187 1,266 1,110 726 760 804 971
2 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
11
Evolution of PBT Margin
8.6% 7.5% 7.1% 7.1%
4.0%
2005 2006 2007 2008 2009
Evolution of EBITDA margin Treasury Mill. euros
9.0% 362 346 7.8% 7.5% 7.5% 314
5.4% 210
100
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Consolidated 12 balance sheet
(Thousand euros)
ASSETS 2009 2008 Property, plant and equipment 111,602 113,426 Investment property 11,234 9,848 Goodwill - 156 Intangible assets 1,308 1,238 Investments in associates 4,886 1,573 Financial assets held to maturity 10,846 20,264 Financial assets at fair value through profit and loss 1,956 - Available-for-sale financial assets 362 362 Trade and other receivables 1,906 2,590 Deferred tax assets 12,632 9,628 NON-CURRENT ASSETS 156,732 159,085 Inventories 29,162 29,626 Trade and other receivables 609,558 358,691 2 Consolidated balance sheet Financial accounts receivable 461 691 Financial assets at fair value through profit and loss 998 2,889 Cash and cash equivalents 346,072 361,767 CURRENT ASSETS 986,251 753,664 TOTAL ASSETS 1,142,983 912,749 13
2 (Thousand euros) LIABILITIES 2009 2008 Capital 51,008 51,008 Share premium 3,913 3,913 Cumulative translation difference (819) (737) Retained earnings and other reserves 141,188 104,643 Less: Interim dividend (19,383) (16,323) NET EQUITY ATTRIBUTED TO HOLDERS OF EQUITY INSTRUMENTS IN THE PARENT COMPANY 175,907 142,504 Minority shareholdings 10,857 10,786 NET EQUITY 186,764 153,290 DEFERRED REVENUES 10,076 11,543 Borrowings 57,795 35,213 Trade and other payables - 14,419 Deferred tax liabilities 8,426 8,476 Obligations for employee provisions 7,379 7,132 Provisions for other liabilities and charges 2,569 1,119 NON-CURRENT LIABILITIES 76,169 66,359 Borrowings 31,549 19,788 Trade and other payables 791,925 627,497 Financial liabilities - 233 Current income tax liabilities 2,466 2,751 Obligations for employee provisions 10,509 8,618 Provisions for other liabilities and charges 33,525 22,670 CURRENT LIABILITIES 869,974 681,557 TOTAL LIABILITIES AND EQUITY 1,142,983 912,749 14 Consolidated income statement
(Thousand euros) 2009 2008
Ordinary revenues 927,727 934,720 Changes in inventories of finished goods and work in progress (5,910) 560 Raw materials and consumables (575,821) (628,883) Employee benefit expenses (142,438) (128,182) Depreciation/amortisation of PPE and intangible assets (7,354) (7,224) Operating expenses (110,600) (106,709) Other net gains / (losses) (10,446) 3,308 Operating profit 75,158 67,590 Net financial costs 3,685 4,206 Gain (loss) on sale of financial instruments 136 (1,903) Share of (loss)/profit of associates 1,050 545 Profit before taxes 80,029 70,438 Income tax (9,293) (17,553) Profit for year 70,736 52,885
2 Consolidated income statement Attributable to: Equity holders of the parent company 70,136 51,326 Minority interests 600 1,559 Earnings per share on profit from continuing activities attributable to Company's shareholders during the year (expressed in Euros per share) - Basic 0.700 0.508 - Diluted 0.700 0.508 2
15 January February Duro Felguera Energía, Duro Felguera Plantas Presentation of yearly results for Industriales and staff complete the move to the 2008. Consolidated net profit reached new company headquarters at the Parque Científico 52.9 million euros having increased by Tecnológico de Gijón, which will improve efficiency 18.6%. Turnover grew by 10% to 934.7 and inter-relationships between the subsidiaries million. New order intake was at 802 specialised in management of major projects. million euros which placed backlog at the end of the year at over 1,100 million. The company publishes the first biography of Pedro Duro Benito, the businessman from La Rioja who in 1858 set up the company Duro y Cía, a metalworking factory in La Felguera (Asturias).
March Payment of third dividend, to sum of 0.0813836 euros gross per share charged 16 2009 Milestones to 2008 results. The company participates in the Iberian Small &Mid Caps forum in Paris where Spanish companies of small and medium sized capital present themselves to international analysts and investors. April Presentation of results for the first quarter. The group's net profits are at 11.7 million euros, 4.7% higher than the same period in the previous year. Turnover increases by 21.9%, going over the 219 million mark. June
2 2009 Milestones Payment of complementary dividend charged to the 2008 results to the sum of 0.09184874 euros gross per share.
Duro Felguera participates in the Small Caps presentation held in Madrid and organised by the company Bolsas y Mercados. The company also attends a meeting with New May York analysts. The AGM of the company's shareholders is held on the 7th. The attendance quorum reaches 79.40% of total fully subscribed The Tierra Amarilla open cycle plant goes into shares. Of this percentage 32.18% attended in person and operation, the first of its kind to be executed 47.22% were represented. by the company in Chile.
Duro Felguera wins a 1,500 million-euro-contract in Venezuela to execute the Termocentro combined cycle power generation facility on a turnkey basis. The plant will be located 40 kilometres from Caracas and will have an output of 1,040 MW. For the sixth year running the company takes part in the international energy trade fair Power Gen Europe, held in Cologne (Germany).
The San Martin combined cycle and the Genelba open cycle constructed by Duro Felguera go into operation in Argentina. 2 July August Presentation of results for the first semester of Duro Felguera participates in the the financial year. Consolidated profit after tax Asturias International Trade Fair with rose by 22.6% and reached 30 million euros. a stand showing the company's Turnover is at 453.8 million, a 8.2% rise. business development on the international markets where more than The new organisation of the group comes into 80% of the group's contracts are force. It is structured into four business segments: concentrated. Energía (Power Systems), Plantas Industriales (Industrial Plants), Servicios (Services) and Fabricación (Manufacturing). Antonio Mortera Morán and Carlos Ruíz Cornejo join the Management Committee as managers of Services and Manufacturing respectively.
Felguera-IHI is awarded a contract for engineering, supply and construction of two liquefied natural gas storage tanks for the new regasification plant belonging to ENAGAS at the port of El Musel in Gijón September (Asturias). Payment of first dividend charged to 2009 results to the sum of 0.09190390 euros gross 17 per share. Small & Mid Caps forum held in Cascais (Portugal).
José María Nebot Lozano is appointed secretary of the Board of Directors. He is a State lawyer on leave of absence. Nebot is a member of Real Academia de Jurisprudencia y Legislación (Royal Jurisprudence and Legislation Academy) and secretary of the Finance October Law section of the institution. Federico Guitarte Delgado, who has a bachelor's degree in phsycology, is appointed manager of Duro Felguera Human Resources.
Presentation of third quarter results. Net profits increased by 15% to 38.5 million euros whilst turnover at 30 September reached 656.7 million, 19.8% higher than November the same period in 2008. Duro Felguera acquires 35% of capital of the company Estudios de Ingeniería Aplicada, EIA XXI, and keeps a call option over the company for an additional 50%.
The Madrid and Barcelona stock exchanges hold presentations of the company by the chief directors of the group. Both acts are organised by the Instituto Español de Analistas Financieros (Spanish Institute of Financial Analysts).
Felguera Montajes y Mantenimiento signs a contract with December Alstom Power Nederland to the sum of 20 million euros for The magazine Capital awards Duro the mechanical erection of three HRSGs at the Claus C combined Felguera for being such a long-standing cycle power plant in Holland. business.
Payment of the second dividend charged to 2009 results to the sum of 0.10211544 euros gross per share. 3 18 Governing Bodies
Board of directors Mr. Juan Carlos Torres Inclán Chairman & CEO Mr. Marcos Antuña Egocheaga Member Inversiones Somió, S. L. Mr. Acacio Faustino Rodríguez García Member (represented by Mr. Juan Gonzalo Alvarez Arrojo) Vice-chairman Mr. José Manuel Agüera Sirgo Member Inversiones El Piles, S. L. (represented by Mr. Angel Antonio del Valle Suárez) Chief Executive Officer Mr. José María Nebot Lozano Secretary Non-Member Construcciones Urbanas del Principado, S. L. Mr. Agustín Tomé Fernández Legal Advisor (represented by Mr. Javier Sierra Villa) Member Mr. Ramón Colao Caicoya Honorary Chairman Construcciones Termoracama, S. L. (represented by Mr. Ramiro Arias López) Member Residencial Vegasol, S. L. (represented by Mr. José Antonio Aguilera Izquierdo) Member Construcciones Obras Integrales Norteñas, S.L. (represented by Ms. Marta Aguilera Martínez) Member Liquidambar Inversiones Financieras, S.L. (represented by Mr. José López Gallego) Member 19
Management Committee Mr. Juan Carlos Torres Inclán Chairman Mr. Ángel Antonio del Valle Suárez Chief Executive Officer Mr. Mariano Blanc Díaz CFO Mr. Francisco Martín Morales de Castilla Power Systems Line Manager Mr. Félix García Valdés Industrial Plants Line Manager Mr. Antonio Mortera Morán Specialised Services Line Manager Mr. Carlos Ruiz Cornejo Manufacturing Line Manager Mr. Agustín Tomé Fernández Legal Counsel Manager
Audit Committee Mr. Marcos Antuña Egocheaga Chairman Mr. Juan Carlos Torres Inclán Member Mr. José Manuel Agüera Sirgo Member Inversiones El Piles, S. L. Member Construcciones Obras Integrales Norteñas, S. L. Member Mr. Secundino Felgueroso Fuentes Secretary Non-Member Mr. Agustín Tomé Fernández Legal Advisor
Executive Committee for Contracts, Investments and Projects Mr. Juan Carlos Torres Inclán Chairman Mr. Acacio Faustino Rodríguez García Member Residencial Vegasol, S. L. Member Inversiones El Piles, S. L. Member Construcciones Obras Integrales Norteñas, S. L. Member Mr. Secundino Felgueroso Fuentes Secretary Non-Member Mr. Agustín Tomé Fernández Legal Advisor
Committee for Appointments, Remuneration and Expediting of Standars Construcciones Termoracama, S. L. Chairman Mr. Acacio Faustino Rodríguez García Member Inversiones El Piles, S. L. Member Residencial Vegasol, S. L. Member Mr. Agustín Tomé Fernández Secretary and Legal Advisor Non-Member
Advisory Committee Mr. Emilio Ontiveros Baeza Mr. Claudio Aranzadi Martínez Mr. Antonio Fernández Segura Mr. Eduardo Sánchez Morrondo Mr. Acacio Faustino Rodríguez García 3
20 Company Structure
Power Systems Industrial Plants Specialised Services Manufacturing
Duro Felguera Felguera Montajes Felguera Duro Felguera S.A. Plantas Industriales y Mantenimiento, Contrucciones Energía S.A. S.A. Mecánicas, S.A. 3 Company Structure Felguera Felguera Felguera IHI, S.A. Revestimientos, Calderería S.A. Pesada, S.A.
Montajes de Técnicas de Maquinaria de Entibación, S.A. Precisión, S.A. (TEDESA) (MOMPRESA)
Operación y Mantenimiento, S.A. Felguera Melt, S.A. (OPEMASA)
Montajes Eléctricos Industriales, S.L.U. Felguera Rail, S.A. (MEI)
Felguera Tecnologías de la Información, S.A. 4 Evolution of 21 Business 22
2009 was a year marked by the virulence of the law viable. And so consolidated income after financial crisis whose impact on the industrial tax registered an increase of 33.6% to 70.7 sector was felt as a sharp fall in investment million euros, i.e. 17.8 million higher than last Consolidated profit which was especially acute in Spain. In this year. Profit attributable to the parent company before tax scenario, Duro Felguera was able to reap some was 70 million euros, having increased by 36.6% Mill. euros highly favourable benefits, maintaining the traits +13.6% of growth shown in previous years and further Of the 130 companies that trade shares on the strengthened for the immediate future thanks Madrid Stock Exchange, Duro Felguera was 80.0 70.4 to new contracts. The main income statement fourth in highest inter-annual net profit growth indicators improved despite stability of sales. in relative terms. As a whole the companies Profits and margins increased considerably and trading in Spain earned 11.9% less than in 2008 the company maintains solid finances and a and many fell or went into the red. perfectly healthy balance. In line with the tendency that Duro Felguera has The ever-increasing internationalisation of the shown in the last few years, in 2009 all the 2008 2009 business and progressive specialisation in business segments (Power Systems, Industrial executing major industrial and power projects Plants, Specialised Services and Manufacturing) and providing specialised services has allowed made positive contributions to the group's 4 Evolution of Business the company to dodge the effects of the financial results, thus maintaining the positive crisis whose impact on the sectors where it development of the company and an increase operates is being more severe on the domestic in size. However, the contribution made by each market and particularly on the manufacturing segment to company profits was disparate as Consolidated profit side of the business. was the inter-annual variation. after tax Mill. euros Duro Felguera results grew in 2009 for the sixth The Power Systems segment contributed most year running which is highly significant given to the gross results of the group by obtaining +33.6% the context of a major recession and this has 51.5 million euros, followed by Industrial Plants 70.7 been welcomed by the stock market as evidenced whose earnings reached 20.2 million. As a whole 52.9 by the excellent behaviour of the company's the two segments dealing in management of shares. large projects provided 78.6% of the global income before taxes. Besides, the Specialised Consolidated profits before tax closed the year Services segment obtained a result of 16.1 at 80 million euros; 13.6% higher than 2008 million euros , i.e. 17.6% of the total, a 29.8% and doubles the figures of only four years ago. increase in comparison to last year. Finally, as 2008 2009 In absolute terms, the inter-annual gross income a consequence of the deep impact of the crisis increase was 9.6 million euros. on the Manufacturing segment, the group's workshops had reduced income figures The tax rate decreased considerably in 2009 significantly in 2009 to 3.4 million euros due to the fact that profits were obtained in their compared to 17.8 million the year before. majority from projects abroad which is not only in line with the decided focus on internationa- At the close of the financial year the EBITDA or lisation of the group but which also made the gross income figure of the company was at 83.5 application of exemptions permitted in Spanish million euros which is over 19.4% higher than last year and attained by a positive contribution representing 67.5% of the total turnover figure, from all the business segments. despite the 0.7% fall in sales registered last year. The Power segment turnover amounted EBITDA Breaking down this parameter by segments and to 463 million euros and same figure for Mill. euros without eliminating inter-group operations, the Industrial Plants totalle 185.2 million. contribution made by Power Systems was 52% +19.3% whilst Industrial Plants made up 20%. The two The companies within the Specialised Services areas dedicated to executing major projects on segment together registered an improved 83.5 a turnkey basis together achieved an EBITDA of evolution of sales, reaching revenue figures of 70.0 68.6 million euros which is a 65.7% rise over 212 million euros, 28% higher than the previous the 2008 figure. Thus, their weight in the gross year, rising to 22.8% of the group's income income result increased by 20 points and figure and going up five points. represented 72%. With reference to the Manufacturing segment, The Specialised Services segment improved by its turnover in 2009 was 99.7 million euros 2008 2009 28.5% on the previous year and reached 18.5 going down by 19.4%. The workshops therefore million euros, which is 20% of the total. The contributed 10.7% to the annual turnover, two downturn of the Manufacturing segment meant points below 2008. a notable decline in its EBITDA, only reaching 7.4 million euros, i.e. the 8% remainder of the group's total.
The improvement of results in 2009 is especially The group's turnover from significant if we consider that they were produced abroad continued to increase in a year where sales were maintained at similar as it had done in the 23 levels to last year as a consequence of: the adverse economic situation which has produced past two years enormous restrictions to investment in industry in developed countries; the decline in order intake in 2008 and the fact that many of the The company's margins improved in 2009 for EBITDA by business important projects for the group were still in the second year running both in relation to segments their initial stages. In these circumstances, the EBITDA going from 7.5% to 9%, and regarding turnover figure at the close of 2009 was at 927.7 profits before tax, at 8.6% compared to the million euros, 0.7% lower than a year before. 7.5% of the previous year. This means that 20% profitability over sales has doubled in five years International Sales increased slightly to 436 placing us among the highest in the sector. The million and therefore turnover from abroad impact of the crisis on the Manufacturing 52% 8% continued to increase as it had done in the past segment caused a sharp decline in margins so two years, and had more weight in the total that profit before tax over sales was at 3.4%. turnover figure by up to 47%. In contrast, sales on the domestic market went down by 2.2% Within the major projects activities the Power 20% compared to 2008. Systems segment improved its PBT margin considerably by up to 11.1%. Lastly, yield on An analysis of sales by segment and without sales of the Specialised Services segment was Power Systems inter-group eliminations reveals that the activity 7.6%. Industrial Plants of major projects in the Power and Industrial Specialised Services Plants areas (including fuel storage) is still the As regards the evolution of personnel costs, Manufacturing main source of income for the group these grew less that last year. In 2009 these
Sales Mill. euros
-0.7%
934.8 927.7 2008 2009 4 Sales by segments went up by 11.7% as a consequence of a 10% constructing this type of installation. To achieve increase in the average personnel rate. In the second objective mentioned, the growth of addition, the percentage of personnel costs over erection, maintenance, overhauls, sales rose slightly to 15.4%. commissioning and operation activities at power Power Systems 463 generation and industrial installations, the 10.4% Specialised 212 During 2009, Duro Felguera continued to company needed to go abroad due to the falling Services Industrial 185.2 increase the stability of its balance of accounts demand in Spain. Here too in 2009 the company 22.1% Plants and reinforced is assets by 33.4 million euros. achieved what it set out to do thanks to new Manufacturing 99.7 The company's treasury is at 346 million and contracts awarded to the companies making up working capital is at 116.3 million euros, which the Specialised Services segment, in various 48.2% 19.3% means a frankly positive situation in terms of countries in Europe and Latin America, mainly liquidity. in the power generation sector. 0 200 400 600 800 Data in million euros and without inter-group eliminations Order intake and backlog Therefore, the year closed with new contracts amounting to 1,876 million euros, a record for For several years now, one of the main objectives Duro Felguera and which is over 133% higher for Duro Felguera has been to take a stronghold than last year's figure. Of the total amount for on the market in managing major turnkey new contracts in 2009, more than 1,682 million projects for power generation, mineral handling euros, i.e. nearly 90%, came from abroad. This and fuel storage installations whilst strengthening fact, which is evidently heavily weighted by the services for the power and industrial sectors, contract for the Termocentro gas-fired facility and in both cases via an increasing in Venezuela, means that the international order internationalisation of business. To attain the intake figure was multiplied by 3.5 compared first of these milestones the company has tried to 2008. 24 to obtain ever larger projects in specialities where it is experienced and where possible on New order intake in Spain however, went down familiar markets or for previous customers.This by 42.4% compared to last year, to 194 million is a strategy which has become obligatory as euros. This decrease in contracts can be the financial crisis affected the sectors where explained to a great extent by the sharp fall in Sales by Duro Felguera operated, given that the recession investment on power generation facilities given geographical areas has caused a fall in investments in power and that those already installed amply meet the industrial installations, especially on the domestic internal demand which has fallen as a direct market. result of the financial crisis. Something similar has happened in the petrochemical sector where Well, during 2009 the group achieved this there have been hardly any new investments objective with two major contracts for large except those already planned to extend certain projects: one of them is the Termocentro facilities; likewise in the steel industry. combined cycle power generation plant in 47% 53% Venezuela which stands out for its 1,500 million euros and for opening the door for the Power The evolvement of order intake by segment of Systems line to this new market which was activity in 2009 fell in line with the objective of already familiar to the company in the industrial the company of strengthening major project field; the other project, the construction of two management, which is evident given the sharp very large LNG tanks in Asturias, confirms the rise in new contracts corresponding to this type Mill. euros trust of a long-standing customer - Enagas - in of business, whose figures went over 1,700 Domestic Market 491.5 our subsidiary Felguera IHI, who strengthens million euros; 3.3 times higher than in 2008. 4 Evolution of Business International Market 436.2 its position as the national leading company in
PBT Margin Treasury Mill. euros
-4.4%
8.6% 362 346 7.5%
2008 2009 2008 2009 And so project activities in the power, industrial figure which almost doubles the previous year's Order intake by plant and fuel storage areas concentrated 91% and which is a new record for the company.This business segments of all order intake for the group compared to allows business prospects to extend further 63% the year before. The Power Systems ahead by over three years. segment virtually monopolised Duro Felguera 4% 5% order intake figures with 79.4% thanks to the The intense commercial activity carried out on Termocentro project, whilst the Industrial Plants the international scene, which produced major 12% segment which includes Felguera IHI - the contracts in 2009, has caused a significant specialist in the fuel storage area - represented increase to the foreign backlog of the company. 11.6%. At 31 December it stood at 86.5% of all works 79% pending execution. Order intake for Duro Felguera Plantas Industriales itself reached 123.5 million euros with nearly 93% coming from abroad. Felguera IHI contracts summed up just over 94 million Mill. euros euros of which the two LNG storage tanks for Power Systems 1,490 the regasification plant at the port of El Musel Industrial Plants 217.7 in Gijón (Asturias) stand out. Specialised Services 93.6 Manufacturing 74.4
Order intake obtained in the year amounted to the record 25 figure of 1,876 million euros
Alter the significant increase of contracts registered in 2008, the Specialised Services segment was severely affected in 2009 by the Order Intake Mill. euros sudden halt in demand, incorporating new contracts to the sum of 93.6 million euros, much Domestic Market lower than the previous year. Although their International 1,876 Market weight in the overall order intake figure was +133% significantly reduced, the companies of the group dedicated to these activities were still highly involved in the international markets from 804 89.7% where more than half of their new contracts 58% came in 2009. 42% 10.3% Worth highlighting is the mechanical erection project at the Claus C combined cycle plant in 2008 2009 Holland, subscribed by Felguera Montajes y Mantenimiento with Alstom Power Nederland for 20 million euros, as well as various contracts awarded to Montajes de Maquinaria de Precisión (Mompresa) by Siemens for works on power generation facilities in Peru. For the Manufacturing segment the amount for contracts Backlog awarded in 2009 was 30% lower than last year, Mill. euros totalising 74.4 million euros of which 43% came Domestic Market from markets abroad. International 2,065 Market The financial crisis is having a very deep impact % on this line of business and especially in Spain +86 where there has been a considerable decline in 1,110 86.5% orders for industrial equipment. 52.2% In terms of order intake volumes among the 47.8% workshops, Tedesa stands out with over 27.6 13.5% million euros, as well as Felguera Calderería 2008 2009 Pesada for the high percentage of new contracts from companies abroad although for amounts which are not very significant to the group as a whole.
The sharp rise in order intakes meant that 2009 closed with a backlog of 2,065 million euros, a 4 5 26 Stock Market Information The 2009 financial year was highly positive for Duro Felguera, not only for its results, order intake and backlog but also for its behaviour on The appreciation in 2009 has the stock market. The company's shares went allowed Duro Felguera trade on 27 up by 93.03%, going from 3.73 euros per share the Ibex Medium Caps at the end of 2008, to 7.2 euros per share at the close of 2009.
Market capitalisation of the company reached 35: Técnicas Reunidas and OHL, and another 734.5 million euros; 354 million more than the two from the continuous market: Vueling and year before, nearly double the average in the Jazztel. Duro Felguera Market Capitalisation last six years and more than eight times higher Mill. euros than 2003. This behaviour is even more outstanding if we consider that 2009 was the second best year 886.5 For another year running, appreciation of Duro for the stock market during the decade, just one 758.0 734.5 Felguera on the stock market was well above point below the rise registered in 2006. The the reference indexes. Duro Felguera was fifth Spanish Stock Market exceeded the majority of on the Spanish market in terms of appreciation the European markets. in 2009 and third on the Madrid Stock Exchange 380.5 General Index. This appreciation, market capitalisation and 245.6 liquidity obtained on the Stock Market has During the same period, the Ibex 35 went up by allowed Duro Felguera to trade, for the first time 90.2 116.8 29.8%, whilst the Madrid Stock Exchange in its history, on the Ibex Medium Caps, the General Index rose by 27.2% and the Ibex index which groups Spanish companies of Medium Cap, in which Duro Felguera is included, medium-sized capital, having traded on the Ibex 2003 2004 2005 2006 2007 2008 2009 by 14.2%. The rise in Duro Felguera shares was Small Caps in the previous years. only surpassed by two companies of the Ibex
2009 Appreciation ranking on the Stock Exchange Market
Vueling 273.94%
Técnicas Reunidas 117.98%
Jazztel 105.27%
OHL 102.31%
Duro Felguera 93.03%
Abengoa 91.53%
Arcelor Mittal 89.29%
Española del Zinc 84.55%
Antena 3 81.35%
Banco Santander 71.11% 0% 50% 100% 150% 200% 250% 300% Duro Felguera vs reference financial indexes 200
150
100
50
0 2/1/09 8/5/09 5/6/09 3/7/09 16/1/09 30/1/09 13/2/09 27/2/09 13/3/09 27/3/09 10/4/09 24/4/09 22/5/09 19/6/09 17/7/09 31/7/09 14/8/09 28/8/09 11/9/09 25/9/09 9/10/09 6/11/09 4/12/09 23/10/09 20/11/09 18/12/09
IGBM Ibex Small Cap Duro Felguera Ibex 35
28
This growth comes in a highly volatile year for management geared towards creating value for the stock markets, with company results marked the shareholder. by sharp falls in demand and lack of credit. In this context, Duro Felguera was able to maintain Duro Felguera has paid out over the year a gross if not increase the main figures of the group dividend of 0.3672 euros per share in four both in terms of quantity and profitability which quarterly payments which meant a yield of 6.07% no doubt the market appreciated and which was over average share price and 100% total profit, reflected by evaluations made by market analysts. and which also placed the company fifth on the Madrid Stock Exchange General Index in terms The management of Duro Felguera geared of profitability for the shareholder. towards creating value for the shareholder is channelled into a share out of dividends which It is also worth noting that 75 companies on also places Duro Felguera at the head of Spanish the Madrid Stock Exchange General Index did companies with greater profit per dividend and not attain yield rates of their reference indexes greater payout (percentage of profit assigned and 34 showed negative profit figures, which to dividends). makes Duro Felguera's favourable development even more outstanding. Payout in 2009 stood at 65%, one of the highest on the Spanish Stock Market for another year Share trading volumes of Duro Felguera shares running, once again showing a focus on rose to 163.57 million euros, which is an increase
Ranking based on 2009 dividend yield
Bolsas y Mercados Españoles 6.80%
Dinamia 6.70%
Criteria 6.40%
Endesa 6.31%
Telefónica 6.30%
Duro Felguera 6.07%
ACS 5.82%
Gas Natural 5.38%
Banesto 5.29%
Banco Popular 5.08% 0% 1% 2% 3% 4% 5% 6% 7% 8% Creating value for the shareholder
Revalorización Rentabilidad por Rentabilidad dividendo* total
2005 109.92% 3.48% 13.40% 2006 170.18% 3.44% 73.62% 2007 10.96% 2.52% 13.48% 2008 -56% 10.53% -45.47% 2009 193% 6.07% 199.07%
* Dividend yield calculated as a sum of dividends received in the financial year divided by the year average share price.
5 Management geared towards creating value for the shareholder is channelled into a 29 growing payout of dividends of 17.26% compared to the previous year. In share numbers, 25.91 million shares were traded making a capital turnover of 25.4% in the year.
The achievements made by Duro Felguera in 2009 are a result of the trust in the company's management awakened among investors.
A management with highly positive results despite the crisis, which has meant: a growing backlog of projects, creating prospects for the group's growth in the next few years; greater profitability than its peers and a healthy financial situation; all of which makes it possible to face the future with confidence and positive expectations of sustained growth. In 2009, all of the recommendations made by analysts on Duro Felguera were favourable.
Ranking in terms of total profit for the shareholder in 2009
Vueling 273.94%
Técnicas Reunidas 121.09%
Jazztel 105.27%
OHL 104.67%
Duro Felguera 99.10%
Abengoa 92.38%
Arcelor Mittal 90.93%
Española del Zinc 84.55%
Antena 3 83.16%
Banco Santander 75.86% 0% 50% 100% 150% 200% 250% 300% 30
Stock market indicators in the last three years
2009 2008 2007 Year-end closing price (euros) 7.2 3.73 8.69 Net Profit per Share 0.69 0.50 0.42 PER (Price/PPS) (times) 10.47 7.41 20.87 Net Cash Flow per Share (CFS) (Euros) (*) 0.74 0.60 0.53 PCF (Price/CFS)(times) 9.73 6.22 16.52 Accounting value per Share 1.72 1.40 1.39 Price/Accounting value 4.19 2.66 6.25 Dividend per Share ( )(*) 0.37 0.39 0.19 Dividend Yield (%) 6.07%(**) 10.53% 2.20% Number of Shares (at year close) 102,016,601 102,016,601 102,016,601 Number of Shares after split 102,016,601 102,016,601 102,016,601 Capitalization at year close ( ) 734,519,527 380,521,922 886,524,263 For purposes of comparison between years, historical data has been adjusted due to the 1x6 split carried out in June 2006. 5 Stock Market Information (*) Calculated in accordance with number of shares at year close. (**) In accordance with mean share price during the period. 5.10% according to share price at year close. 5 6 Activities by 31 Business Segments
5 Duro Felguera Energía, S.A. 32 General Manager: Francisco Martín Morales de Castilla
2009 was very intense for Duro Felguera Energía The most important event for Duro Felguera in two ways: on the one hand due to its main Energía was without a doubt the award of the business - managing turnkey projects for gas- Termocentro contract which is being built in fired power generation plants - and on the other Venezuela for Electricidad de Caracas to provide for having secured the largest contract in its power to the country's capital. The 1,500 million history: a combined cycle power plant in Vene- euros contract is the largest ever signed by the zuela, all this along with the start of works on company and is another step towards the first solar powered plant for the company international expansion within the power systems which is a major step into a new field of business field and in a new market for this type of with great potential for the future. business. Termocentro is located 40 kilometres south of Caracas in the municipality of Paz Over the year the Power Systems line was focu- Castillo (Miranda State) and will produce 1,040 sed on twelve projects: six gas-fired combined MW of power. cycle power plants (four in Spain and two in Argentina); two open cycle power plants in Latin The facility is a two-set multi-shaft configuration, Projects America; two desulphurisation facilities at coal- each set comprising of two gas turbines and fired plants in Spain; a solar powered plant in one steam, which will be fired by gas with the Core business Spain and the project kick-off on Termocentro possibility of using liquid fuel as well. Duro • Execution of Turnkey Projects for Gas- combined cycle facility in Venezuela. Felguera has opted for Siemens to provide the Fired Power Generation Facilities (Open or Combined Cycle) 6 Power Systems Segment • Turnkey Projects for Conventional Power Generation Facilities • Desulphurisation and Denitrification Plants at Coal-Fired Power Generation Facilities • Biomass Plants • Cogeneration Plants • Solar-thermal power plants Main scopes of work • Project Management • Engineering • Supply • Construction • Erection • Commissioning Quality, environmental & safety management • Certificates: Lloyd´s Register Quality Assurance, EN/ BSEN / DIN EN- ISO 9001 / 2000 • Applicable to design, engineering, acquisitions and construction of projects for turnkey industrial installations in the industrial and power generation sectors turbines. It is expected that the two first gas turbines will start operating in the first six months of 2011 and the other two in the second half of the same year. 33 The combined cycle phase will be executed immediately after and is expected to finalise in December 2013. The basic engineering of the project and the purchase of the main equipment (Buenos Aires province). After the steam turbine was carried out in 2009. At the end of the year was installed, testing started on the combined site preparation works started including earth cycle plant at the end of the year and the movements carried out by the customer. envisaged power output of 800 MW was reached. Throughout the year the company completed works on four gas-fired generation plants in The company also delivered the 150 MW Genelba Latin America: two combined cycles and one open cycle power plant to Petrobras, located in open cycle in Argentina, and an open cycle in the grounds of a conventional power plant of Chile. the same name in Ezeiza (Buenos Aires). Duro Felguera Energía acted as sole turnkey contractor In Argentina, construction works finalised on on this project. In Chile works ended on the 160 the 800 MW San Martín combined cycle plant MW Cardones open cycle power plant located situated near Rosario (Santa Fe province). in Copiapó-Tierra Amarilla in the Norte Chico This project was carried out in conjunction with region of the country, 800 kilometres north of Siemens, Electroingeniería and Inelectra for Santiago and the plant was handed over to the Termoeléctrica San Martín. Works alongside final customer, Southern Cross. Electroingeniería and Siemens also finalised on With reference to business on the Spanish the Manuel Belgrano plant located in Campana market in the field of gas-fired power plants, 6 6
34
the company continued construction works for power plant (Palencia) to Iberdrola and continued Endesa on the Cas Tresorer II plant in Mallorca on the construction of the desulphurisation unit which went into open cycle operation in 2009 at the Lada IV plant in Asturias also belonging and the combined cycle will commence to Iberdrola and expected to finalise in 2010. operations in 2010 reaching a power output of 230 MW. In parallel, the Puerto de Barcelona In 2009 Duro Felguera Energía took its first and Besós V projects in Catalonia continued. steps in the field of renewable energy with the start of pre-engineering on the Andasol III project The former for Gas Natural with a power output located in the municipalities of Aldeire and La of 844 MW and commissioning scheduled for Calahorra in the province of Granada. The 2010, and the same will happen to the two units company received the go-ahead in January 2010 at the Puerto de Barcelona plant for Endesa and is executing the project in consortium with whose output will be 850 MW. In Asturias, Duro Ferrostaal, Solar Millenium and Man Solar Felguera continued on the combined cycle at Millenium. the Soto de Ribera V plant for Hidrocantábrico Energía. The 400 MW-facility is situated near The Andasol III solar power plant will have an Oviedo and commercial operation will commence output of 50 MW and will use parabolic troughs in 2010. Also in Spain the company delivered with energy storage. It is expected to come into the desulphurisation plant installed at the Velilla operation in 2011. The scope of the works 6 Power Systems Segment 35
includes basic and detailed engineering, equipment supply, civil works, construction and commissioning. With the award of this contract the Asturian company goes into an area of business which has great prospects for the future and is expected to grow in the next few years.
On the commercial front, Duro Felguera Energía was involved in bidding for new projects in other fields of action such as conventional coal-fired plants, and it started looking into new markets in Europe, Asia, Africa and Latin America, especially in the more advanced countries where investments are foreseen in power generation to meet the rising energy demand. Duro Felguera Plantas Industriales, S.A. 36 General Manager: Félix García Valdés
Duro Felguera Plantas Industriales (DFPI) is economic crisis on a global level. However, specialised in executing turnkey contracts to thanks to its presence in emerging economies construct industrial facilities mainly in the areas such as India, in 2009 DFPI achieved major of mineral handling and port terminals for bulk advances in the sector, especially on the goods. Much of its work is on a worldwide international markets. scale with references in various countries in Europe, Latin America and Asia. Once the terminal executed by DFPI at Gangavaram Port in Andra Pradesh (India) was The company closed 2009 with positive results; inaugurated, the record operation figures a contribution of 20% towards the EBITDA of achieved in coal imports and iron ore exports the group and a turnover of 183 million euros. drew the attention of several port operators. To attend to this enormous market, the subsidiary 90% of the Duro Felguera Plantas Industriales Felguera Grúas India was created, which depends contracts came from markets abroad where directly on DFPI, and it is currently immersed increased business is expected despite the in the final negotiation phase of various contracts. uncertainty caused by the crisis. Another of the geographical zones with major The solid bulk handling sector where DFPI is potential in the bulk handling field is the Middle most active, has suffered the impact of the East where the company is also operating. Added 6 Industrial Plants Segment 6 37
to the successful start up of a mineral offloading this new project was developed in 2009 and the installation for Emirates Steel Industries (ESI), site works will be carried out over 2010. At the has been the award of a similar facility which Compostilla Power Plant belonging to Endesa, will go into operation midway through 2010 works continued on erecting the new mineral along with an invitation to bid in closed tenders yard which is expected to be finalised halfway which are of the utmost importance to ESI. through 2010.
In Mexico, a market where DFPI has already Also in Spain, in the mining and mineral executed various projects, works continued on processing area, DFPI designed and executed the coke extraction and handling system at the the vertical shaft extraction system at the María new Pemex Refinery in Minatitlan, in addition Luisa mine in Asturias as well as another to extensions to the scope of the works and extraction system for the seventh level of the new contract awards. San Nicolás mine. Both of these mines are in Asturias and belong to the Hunosa mining On the domestic market, the project for a coke company. handling system at the Repsol-Petronor refinery in Muskiz (Vizcaya) continued. A new project In reference to the mining of metals, DFPI is was also awarded at the same refinery for a working on the African continent in countries sulphur handling system. All the engineering of like Ghana, Mauritania and Senegal, carrying 6
38
out various investigations on developing iron Brazil, which was executed on a turnkey basis ore deposits. The company is drawing up basic by DFPI in Rio de Janeiro for Petrobrás, a local studies on exploitation of the mines and mineral company was acquired and called Duro Felguera treatment and handling. do Brasil Oil & Gas whose objective is to consolidate DFPI's potential to develop turnkey In Latin America two new iron ore milling plants projects in this country in the petrochemical in Ciudad Píar, Venezuela, are being defined. In and oil & gas sectors. addition, execution of the iron ore concentration plant project is still continuing in this country. The company has also signed major international collaboration agreements with OEMs to deal Duro Felguera Plantas Industriales has made with large EPC contracts in this sector. considerable efforts in 2009 to establish strategic relationships and come to agreements with At the end of 2009 there were several projects major international companies to design and in the final negotiation phase and expected to execute large mining projects, principally with take the form of definite contracts over the Australian companies. length of 2010.
In the Oil & Gas field, after the inauguration in 2009 of the second LNG and CNG terminal in 6 Industrial Plants Segment 39
Projects Engineering and supply of turnkey plants for: • Seaport terminals for solid bulk handling • Bulk handling and stockyards at power plants,steelworks, mines, cement plants, etc. • Bulk stackers and reclaimers • Grab unloaders and ship loaders • Equipment and installations for underground mining • Mineral processing/concentration plants • LNG and CNG terminals on floating regasification plants Operation and maintenance of bulk handling facilities and mineral processing plants
Design, development, production, installation and after-sales servcies for:
• Industrial, steelworks and nuclear overhead cranes and gantry cranes • Dockside and gantry cranes for port services • Overhead and gantry cranes for containers, general and bulk loads Equipment for large civil works infrastructures: • Tunnel boring machines, back-up's Petrochemical, gas and environment
• Petrochemical plants • Seaport terminals for LNG unloading and CNG emission from a floating regasification plant • Acid regeneration plants • Environment - Incineration plants • Water treatment plants Physical distribution systems • Turnkey installation and systems for automated physical distribution, logistics and storage • Transelevators Felguera-IHI, S.A. 40 Chairman: Angel Antonio del Valle Suárez
Felguera-IHI, owned by Duro Felguera and the same customer, which are expected to finalise Japanese IHI Corporation, is the leading Spanish in 2010. company in fuel storage -both liquid and gas- and executes projects for liquefied natural gas In addition, Enagas has continued to place its (LNG) storage tanks, provides turnkey trust in Felguera-IHI and in 2009 awarded construction of fuel storage plants and other another two tanks of this type for the storage equipment (spherical and vertical, semi- regasification plant being built at the port of El refrigerated and high-temperature tanks and Musel in Gijón (Asturias). vessels). Felguera-IHI applies highly advanced technology The company has managed to maintain its to construct these so-called "full containment" leading position on the market as a specialist tanks which are double container tanks to store in complete development of LNG cryogenic natural gas in a liquid state (at -163ºC). They tanks given that after successfully concluding are among the largest of their type in the world the construction in 2009 of two tanks at the and require maximum safety demands.The inner Port of Barcelona and another in Cartagena for container is made of steel with 9% nickel, and Enagas, all of 150,000 m3 capacity, it continued the outer is pre-stressed concrete which prevents to work on another two tanks of similar the stored product from coming into contact characteristics, also in Barcelona and for the with inflammable gases. 6 Industrial Plants Segment 6 As regards the construction of other tanks and spherical vessels, in 2009 four tanks to store 173,000 m3 of hydrocarbons were finalised for the Cepsa facility in Huelva, as well as three LPG spheres with a capacity of 4,800m3, also 41 for the same customer in Huelva. In addition, Felguera-IHI was awarded the first two high-temperature tanks (400ºC) with a capacity of 16,000 m3 to store molten salts at refineries over the next three years which goes the Andasol III solar power plant in Granada, to show the degree of confidence in Felguera- and a new propane storage sphere of 4,500m3 IHI when it comes to carrying out this type of and another for butane of 7,000m3 for the Repsol work. Additionally, Felguera-IHI has another Refinery in Cartagena. Furthermore, works three plants in operation in Spain. concluded in 2009 on the construction of a 240,000 m3 capacity storage plant for hydrocarbons, for Cores within the grounds of the port of El Musel in Gijón.
Felguera-IHI continues with its maintenance activities at the main Spanish refineries via its permanent branches in Huelva, Algeciras, Tenerife and Puertollano, from where works are constantly carried out in maintaining and modernising these facilities.
During 2009, Cepsa renewed its contract for the maintenance of the Huelva and Tenerife Services Design and construction of LNG storage tanks
Design and construction of vertical and spherical storage tanks
Design and construction of hydrocarbon storage plants
Exploitation of own storage plants
Overhaul and maintenance at refineries and installations
Quality, environment & safety management Certificates AENOR: ISO 9001:2000 OHSAS 18001:1999 Felguera Montajes y Mantenimiento, S.A. 42 General Manager: Eduardo Martínez San Miguel
In 2009, Felguera Montajes y Mantenimiento, and expected to finalise within the first six a company specialised in industrial erection, months of 2010. strengthened its position on a national and With regard to new contracts awarded in the international level. This is evidenced by the fact year, worth highlighting is the mechanical that 73% of its order intake figure was for erection of three HRSGs on the 1,280 MW Claus projects in the European Union. Turnover volume C combined cycle power plant in Holland of the company registered an increase of 29% belonging to Essent Projects B.V. compared to last year. On the domestic market the company was In the power generation area, foreign markets awarded the mechanical erection of a HRSG continue to predominate in terms of business boiler, piping and equipment for the water/steam development with projects such as: the cycle and balance of plant (BOP) at the 400 MW mechanical erection of four boilers and Soto V combined cycle facility in Asturias. associated equipment at the Staythorpe C combined cycle plant in the UK belonging to The company also executed the mechanical RWE Power; and the contracts to supply, erection of a gas turbine - TG5 - at the diesel- manufacture and erect steel alloy and carbon fired plant in Mahón, (Menorca) belonging to steel piping at the Flevo combined cycle facility Gesa. In addition, works finalised during the 6 in Holland, belonging to Electrabel Netherland, first quarter of the year on the erection of a 6 Specialised Services Segment 43
boiler and associated equipment at the 412 MW of vacuum distillation and coking furnaces which Malaga combined cycle power plant belonging are part of the Project C-10 works to expand to Gas Natural, and in the final quarter, the the Cartagena Refinery belonging to Repsol and contract for the mechanical erection of the 431 expected to finalise in 2010. MW Aghada combined cycle plant finalised in Cork (Ireland). In 2009, various projects which had commenced the year before in the steel industry continued. In the petrochemical sector, the company Among them are the works to overhaul the concluded the mechanical erection of the Sulphur conveyor belts at the sinter and mineral yard, Block and Merox LPG4 systems at La Rábida and repair the conveyor systems at the Arcelor- refinery for Cepsa. These works are part of the Mittal steelworks in Gijón. Of the new contracts project started in May 2008 to increase the in the year, of note are the structural repairs to plant's capacity in producing middle distillates. the T2 Tower at the same facility. Products & Within this sector, also worth highlighting are Finally, in the industrial maintenance area, the Services the works started on the ADI-1000 project - most important works carried out in 2009 were Engineering, management and mechanical erection and painting - to be executed for Elcogas (in Puertollano), Iberdrola and development of erection projects for: throughout 2009-2011 for Petronor at the Muskiz Arcelor-Mittal. • Power generation plants Refinery (Bilbao), and the mechanical erection • Chemical and petrochemical sectors • Metal and steel industries • Cement, paper, sugar, etc. plants • Car industry, naval sector, etc. Electrical and mechanical erection for large industrial projects
Refurbishment, revamping and overhaul of industrial facilities
Maintenance • Maintenance organisation and control of spares • Kick-off and supervision • Execution of preventive, predictive and corrective maintenance • Specialist maintenance works • Major overhauls during outages/stoppages • RCM Quality, environmental & safety management • Lloyd's Register Quality Assurance: ISO 9001:2008
• AUDITORES DEL NOROESTE: Safety at Work Audit Certificate OHSAS 18001:1900 Montajes de Maquinaria y Precisión, S.A. 44 Mompresa Sole Administrator: Antonio Mortera Morán
During 2009, Montajes de Maquinaria de (Asturias) and rotating equipment for the flue- Services Precisión (Mompresa) registered an overall gas desulphurisation system at the Lada facility Erection and overhaul of: growth of 52% in sales compared to last year in Asturias. • Gas and steam turbines and maintained major order intake figures, • Generators thereby consolidating the tendency established In light of the increasing number of contracts, • Auxiliary turbines in previous years. the company continued with its policy to • Condensers specialise its workforce. This policy has led to • Rotating equipment in general With reference to growth by business area, the the creation of the Mompresa Training School, - The company carries out comprehensive increase of international sales compared to last covering an area of over 2,000 m2 and almost construction of open and combined cycle year is worth noting, confirming the company's uniquely equipped to include a 160 MW steam power generation facilities abroad, via its subsidiaries. clear orientation towards foreign markets. In turbine. The school is located in Polígono de this sense, there was significant activity in Silvota in Asturias and will start to run in 2010. Quality, environmental countries such as Ireland, UK, Mexico, Peru, & safety management Chile, Argentina and Venezuela. In this way site workers will be provided with Certificates: complete technical and practical training to • LLOYD´S REGISTER QUALITY Business on the Spanish market in the erection simulate and practice real and complex site ASSURANCE Quality: ISO 9001:2000. and overhaul of turbines and generators also situations. Environment ISO 14001:2004 and EMAS. registered a slight increase compared to the impressive figure achieved in 2008. This fact • AUDITORES DEL NOROESTE clearly consolidates Mompresa's position as Safety at Work Audit Certificate OHSAS 18001:2007. the leading national company in this sector.
As regards overhauls, during 2009 over 40 were carried out for multinational concerns such as
6 Specialised Services Segment Siemens, Mitsubishi or General Electric, and also for the major Spanish operators in the electricity generation sector such as Endesa and Iberdrola. Worth highlighting are the works to overhaul and replace the steam turbine alternator carried out on Unit I of the Almaraz Nuclear Plant (Cáceres) for Siemens.
Mompresa successfully constructed the open cycle power plants of Chilca III, Santa Rosa, Termoflores and Kallpa II-III in Perú; Tierra Amarilla in Chile, and Genelba in Argentina. The company also finalised erection of turbines and alternators at the combined cycle plants of Manuel Belgrano and San Martín in Argentina, Aghada in Ireland and Staythorpe in the UK, as well as Besós V, Puerto de Barcelona and Cas Tresorer II in Spain. Erection of industrial steam 6 turbines concluded at the Ence plant in Navia Operación y Mantenimiento, S.A. Opemasa 45 Sole Administrator: Antonio Mortera Morán
Operación y Mantenimiento, S.A. (Opemasa) is Barcelona (2x400 MW - Barcelona), Carbon the subsidiary of the Duro Felguera group Capture Plant (Compostilla), Soto de Ribera specialised in operation, maintenance and (400 MW - Asturias) and, especially at the San commissioning of power generation and Martín (2x1 - 830 MW) combined cycle in industrial facilities. The company developed its Rosario (Argentina). core business in 2009 on projects within the power generation sector, specifically on open Opemasa also took part in management tasks cycle, combined cycle, coal-fired and solar of site storage facilities at the flue-gas powered plants; flue-gas desulphurisation desulphurisation system at the Lada coal-fired systems, effluent treatment plants, cogeneration plant (Asturias), at Cas Tresorer II combined plants, biomass plants and wind farms. cycle plant, at the Andasol III solar powered plant (Granada), and especially at the already Of the works carried out over the year, worth mentioned Manuel Belgrano combined cycle noting are those on: the Protasa plant in plant (Argentina). The company also provided Barcelona; the water treatment plants at the documentation, coding of spares services and Soto de Ribera and Aboño power plants in electrical /I&C work at various gas turbine Asturias; maintenance of La Puebla de Almoradiel outages. cogeneration plant in Toledo, all belonging to EDP. Of equal importance is the contract for operation and electro-mechanical maintenance of the 20 Company activity increased on biomass-fuelled MW Juan Grande wind farm belonging to EDP plants in 2009 to the extent that Opemasa has located in Matorral (Gran Canaria). Services acquired considerable presence and experience Core Business in an area with excellent perspectives for Finally, Opemasa continued to develop energy expansion in the next few years. saving projects for petrochemical companies. • Operation and maintenance at power generation plants (coal-fired power These proposals, which include the minimisation plants, solar energy power plants, wind In addition, in 2009 planning started on the of steam or gas leaks by improving processes farms, cogeneration and biomass) and complete operation and maintenance works of and process control at refineries and other waste treatment plants the solar powered Andasol III plant in Granada. industrial installations that use steam on a • Commissioning massive level, were developed using 100% • Stockyard management and Opemasa's ever increasing presence abroad Spanish technology of the highest level. documentation control • continued on the multi-annual complete Study, implementation and development of power saving projects maintenance contract of the Manuel Belgrano Over 2009 Opemasa continued to reorganise (2x1 - 800 MW) combined cycle facility in its activities, incorporating new markets and Quality, environmental & Campana (Argentina), where a group of more business areas, and obtained sales and order safety management than 35 professionals provide the services intake figures that consolidate the tendency to Certificates: mentioned in association with Siemens. grow which started in previous years. • LLOYD´S REGISTER QUALITY ASSURANCE Over the length of 2009 documentation and Quality: ISO 9001:2000. Environment: ISO 14001:2004. commissioning management was carried out at the combined cycle plants of Barranco de • AUDITORES DEL NOROESTE Tirajana II (230 MW - Gran Canaria), Cas Safety at Work Audit Certificate Tresorer II (230 MW - Mallorca), Puerto de OHSAS 18001:2007. Felguera Revestimientos, S.A. 46 Feresa General Manager: Pedro Carcedo Herrero
Felguera Revestimientos (Feresa) specialised in at the Gibraltar Refinery (Cadiz), heat insulation supplying and installing all types of industrial and lagging works on equipment and piping insulation and lagging - heat, refractory, finalised on the Vacuum Unit II and Acid Waters cryogenic, acoustical - in 2009 maintained the systems. In addition, at La Rábida Refinery growth in business that it had registered in (Huelva), heat insulation and lagging on piping previous years. The company had an increased and equipment was executed for the order intake of 16% compared to last year with Interconnections and H4 projects. nearly 20% of new contracts coming from international markets, whilst its turnover and In collaboration with other companies, supply profits-before-tax figures grew by 31% and and erection works are being carried out to 166% respectively. insulate and lag piping and equipment at the Crude, Vacuum, Gascón and Auxiliary Services With reference to contracts executed in 2009 in units at La Rábida Refinery (Huelva) for Cepsa. the power systems sector, works finalised on the supply and installation of heat insulation At the same time, at the Cartagena Refinery in and lagging of boiler equipment and piping and Murcia, refractory insulation is being carried associated equipment at the Malaga combined out on the coking and vacuum furnaces and cycle power plant, as well as the supply and conducts. Both projects have an execution installation of heat insulation for piping, schedule which spans 2009 and 2010. equipment, flues and internal isolation joints on Services two HRSGs at the Cas Tresorer II combined Within the gas sector, Feresa is executing cycle power plant in Mallorca. cryogenic insulation works on two 150.000 m3 Conventional linings liquefied natural gas (LNG) tanks at the receiving, • Insulation: mineral / ceramic, bio-soluble, In the field of flue gas desulphurisation systems, storage and regasification plant in Barcelona silicate calcium, foam glass, expanded 6 Specialised Services Segment lagging was supplied and assembled on Unit IV belonging to Enagas. In the second semester perlite, poliisocianurate, polyurethane piping at the Lada coal-fired plant (Asturias). of 2009, the company supplied and erected the foam, etc. • Protective lining: aluminium, stainless, On the international side, heat insulation works insulation of the OSBL spheres, forming part of galvanised and aluminised steel, aluzinc, were carried out on the combined cycle plants the works on the extension project of La Rábida mastics, painting, etc. of Aghada (431 MW) in Cork (Ireland), Grain Refinery (Huelva) for Cepsa. (UK) and Fos Sur Mer in Marseille (France). Blasted insulation In the maintenance and outages area, heat In collaboration with Felguera Montajes y insulation revision and replacement works Removable linings (padding) Mantenimiento, Felguera Revestimientos finalised on Unit IV at the Lada coal-fired power • In general, for equipment with difficult supplied and carried out the pre-fabrication of generation facility belonging to Iberdrola. In this dimensions and shapes: steam turbines, heat HP/MP/LP piping at the 800 MW Flevo combined field, Feresa has been awarded various exchangers, dilation compensators, cycle facility in Lelystad (Holland); heat insulation maintenance contracts for industrial installations diesel motor collectors and exhausts, etc. and lagging works also commenced at the belonging to major national power operators Quality management Staythorpe C (1,700 MW) combined cycle plant such as Iberdrola and EDP/HC Energía. in Nottingham (UK) and are expected to finalise • AENOR: ISO 9001:2000 in 2010.
• AUDITORES DEL NOROESTE: Over the year, activity in the petrochemical sector Safety at Work Audit Certificate was highly intensive for the company. For Cepsa, OHSAS 18001:1900 Montajes Eléctricos Industriales, S.L.U. MEI 47 Manager: José Luis Menéndez Alvarez
Montajes Eléctricos Industriales (MEI) specialises recently awarded the electrical and I&C in electrical and instrumentation engineering, engineering of the SR6 Unit (Transfer and supply, erection and assembly at power Stocking of Sulphur). generation plants, port terminals, bulk handling facilities and automated warehouse and MEI has also strengthened its manufacturing distribution centres. The company finalised line of electrical distribution cabinets diversifying projects in 2009 which had already started in and expanding its catalogue in terms of years before and which have served to accelerate applications, sectors and references. the process of evolving towards new sectors, such as the power generation sector, where it The company has also gone into the renewable started to operate as a result of becoming part energy field with a special focus on solar powered of the Duro Felguera group in 2007. generation to apply the experience it has acquired within the power plant construction sector. Throughout 2009 electrical and instrumentation erection works finalised on Unit V of the Lada coal-fired facility in Asturias, as well as the works on the flue-gas desulphurisation system at the Velilla plant in Palencia. The company's first major electrical project in the fuel storage area also concluded. This was executed alongside 6 Felguera-IHI for Petróleos Asturianos at the Services storage plant whose construction started at the Supply and electrical erection at port of El Musel (Gijón, Asturias) in 2007. combined cycle power plants Engineering, supply and electrical Also within the power generation sector, in 2009 erection at mineral stockyards MEI took part in the combined cycle projects of Cas Tresorer II (Mallorca) and Soto V (Asturias) Equipment supply, electrical and which will continue in 2010. In the field of bulk mechanical erection for logistics handling, the engineering, supply and erection and automated storage systems project continues for the electrical instrumen- tation and control (I&C) systems of the stackers Supply and electrical erection for and reclaimers at the coal stockyard of the desulphurisation plants at thermal Compostilla coal-fired facility. power plants Quality, environment & Distribution and control equipment were replaced Safety Management by the company's own systems on the DB1 offloader at the Endesa terminal of the Certificates: • BM TRADA CERTIFICATION Carboneras Port. In 2009 MEI also successfully Quality: ISO 9001:2000 concluded the first electrical and I&C engineering project for the petrochemical sector, carrying AUDITORES DEL NOROESTE Safety at Work Audit Certificate out the engineering on the AL6 unit (Coke • OHSAS 18001 : 2007 Handling and Stocking Unit) at the Repsol- Petronor refinery in Muskiz. The company was Felguera Tecnologías de la Información, S.A. 48 Manager: Alejandro Durán López
2009 has been a year of growth for Felguera TI, (ERP) programme Integralia 3.0. (r) to provide and a year to prepare for the major strategic a new, more productive environment for challenges that it must face in the next few development which will evolve towards the wider years. features and benefits offered by Business Intelligence. The company owned by Duro Felguera developed important projects in the physical distribution area where it has specialised in management systems for automated warehouses. Over the year, Felguera TI widened its experience in major pharmaceutical distribution centres, several systems were installed in construction and hardware material distribution centres and projects in the industrial safety field began to take on relevance. The company also maintained its activities in other sectors such as the food, naval and car industries. Projects In the management area, Felguera TI carried out Core Business a project for a chain from Andalusia and • Warehouse Management Systems at computer support is being provided to the sales automated and conventional installations points of a distribution chain undergoing • Warehouse Control Systems expansion on a national level. This last project • Business Management systems - will continue over the length of 2010. These Integralia (r)
6 Specialised Services Segment along with other projects continue to reaffirm • Industrial Physical Distribution Systems Felguera TI as experts in the physical distribution • Industrial Safety • Transport logistics sector. • Monitoring systems (warehouses, distribution or production centres) On the Internet Projects and Electronic Management areas, the company worked on Principle Scopes various projects for the Administración • Consulting Autonómica del Principado de Asturias, in • Project Design collaboration with the CTIC Foundation on its • Software programming, installation and electronic invoicing project, and training and commissioning consulting projects increased. • Maintenance and support Quality, environment, health & R&D is of key importance to the company: safety management throughout 2009 Felguera TI worked on • AENOR - UNE 16002 standard for R&D developing an innovative Voice Picking system in computer technology which will continue in 2010. • OSHAS 18001: 2007 Health & Safety in development, set up, running and maintenance of computerised In addition, development started on the new information systems. version of the enterprise resource planning 6 Técnicas de Entibación, S.A. Tedesa 49 General Manager : Carlos Ruiz Cornejo 6 Manufacturing Segment Técnicas de Entibación, S. A. (Tedesa) closed a In 2009 works also finalised on the extension great year as regards production and order to our new facility in Silvota, which will centralise Products intake. production and avoid continuous movement of Mining: materials and personnel between workshops. • Steel arches in TH, HEB, IPN sections The current circumstances did not affect the • Hydraulic and friction props company's business too much given the large • Link bars quantities of ongoing projects in the manufacture • Lining sheets of equipment for mining and underground works • Grating for rail and road, and therefore production was Tunnels hardly affected by the general crisis. • Steel arches in TH, HEB, IPN sections • Lattice girders Some of the most important works in 2009 were • Formwork carried out on: the Pajares tunnel of the Sotiello- • Bernold-type sheet Campomanes section of the Madrid-Gijón high- • Resin anchor bolts speed train line for Acciona S.A., where Tedesa • TBM back-ups supplied more than 3,000 tons of tunnel support Electricity Pylons equipment; the Barcelona metro system for UTE Línea 5 Horta (tunnel below the collapsed area Mobile phone antennas of El Carmel in Barcelona), with the supply of heavy support equipment. Also worth mentioning Steel structures are the high-speed rail (AVE) tunnels for the Barcelona-French Frontier in Cornelia and Quality, Environment & Safety Figueras, and in Levante on the Ontígola-Aranjuez Management line. Certificates • AENOR: ISO 9001:2000 A major quantity of order intake and production • OHSAS 18001 : 2007 was also achieved in 2009 for mobile phone antennas.
On the international side in 2009, Tedesa exported mainly to Europe, America and Africa. Of special note are the volumes sent to Portugal, Mexico and various Latin American countries. Total exports in the year came to 23% of the total turnover figure.
In 2009, new machinery to manufacture heavy propping equipment was installed at the new building. This R+D project carried out the year before by our technical office has meant a more efficient use of materials and a significant increase in production capacity. Felguera Calderería Pesada, S.A. 50 Manager: Enrique Díaz-Caneja Castro
Felguera Calderería Pesada (FCP), the Duro Among the projects carried out and delivered Felguera subsidiary dealing in the design and over the year, worth mentioning are: two coke manufacture of industrial equipment for the chambers for Petronor measuring 9 metres in petrochemical and chemical industries, and diameter and weighing 450 tons each; a HDS specialised in thick-walled, oversized products (hydrodesulphurisation) reactor and vacuum using unusual materials, closed 2009 with a column for the same customer; two columns, turnover of 30 million euros, 82% of which one for crude and another vacuum for Sinclair- came from international markets. USA; two CrMoV reactors for ENAP-Chile; and various parts of an FCC unit for IAG-USA destined Despite being a year that was marked from the for Serbia. start by the international financial crisis, which has had and continues to have adverse effects Other work on equipment for the petrochemical on the petrochemical industry - FCP's main sector during 2009 and whose delivery is customer - 2009 ended with a profit before tax expected in 2010 was as follows: a 500-ton figure of four million euros, backing the policy reactor made of CrMoV for Shell-Holland and established in the last few years of specialising three liquid-gas separators for AMEC in the in the manufacture of very large, thick-walled Republic of Azerbaijan. equipment with high technical requirements. 6 Manufacturing Segment 6 51
During the year, of the contracts awarded, with a special focus on those made of CrMoV Products included are: a HDS reactor for Petrogal, via steel alloys. Equipment for the chemical and Fluor UK; two 500-ton coking chambers and a petrochemical industries 560-ton reactor for Conoco Phillips-Germany, • Thick-walled reactors via Technip-France. • Coke chamber furnaces • FCC Units The company also continued with its policies of • Large columns • constant upgrading of quality assurance, High pressure separators maintaining strict compliance with delivery Quality, environmental and safety schedules and investing in research and management development to incorporate technological CERTIFICATES improvements into the design and manufacturing • Iso 9001: 2000 processes. • Iso 14001: 2004 • OHSAS 18001: 2007 STAMPS With reference to investments made over 2009, • U STAMP (n° 20976 ) ASME the company worked on a vertical lathe with a • • U2 STAMP (n° 25364) ASME capacity to machine pieces of up to 10 metres • S STAMP (n° 25363 ) ASME in diameter, 4 metres in height and 100 tons in • NB (ID 5125) ASME NATIONAL BOARD weight. R STAMP (n° R-2325 ) ASME NATIONAL • BOARD PED 97/23/CE Mod Hi Civil works finalised on a horizontal roller to curve sheets of up to 3,600 mm wide and 210 mm thick when cold and 330 mm thick when hot, which is expected to go into operation midway through 2010.
With these investments, FCP will be able to manufacture top of the range thick-walled equipment for the petrochemical sector.
On another note and with a view on the future, the company has decided to opt for new markets where levels of competition are considerably reduced and it has assigned major human resources to prepare the documentation required (manuals and procedures) to obtain the N/ASME stamp in 2010 to design and manufacture pressure vessels within the nuclear sector worldwide.
On the research and development front in 2009, work continued on developing techniques to manufacture thick-walled, oversized equipment 6 Manufacturing Segment 52 • • • • • • • • • • • • • • • • • • Management Quality, Environmental&Safety material andequipment Design andmanufactureofrailtrack foundry Manufacture ofironandsteel Insulated gluedjoints Switch expansionjoints Sleepers (ties) Double crossover(scissors) Crossovers concrete ties Turnouts preassembledonwoodor High speedrailswitches Switches fortramlines Conventional switches Mobile pointcrossings Moulded manganesesteelcrossings maximum weightperpiece25t. Carbon andmanganesesteelcasting- per piece13t Casting ofironmodules-maximumweight 40 t Grey IronCastingmaximumweightperpiece OHSAS 18001:2007 AUDITORES DEL NOROESTE: set ofswitches RATP UV21B-Crossings -half ASSURANCE: ISO14001:2004 LLOYD'S REGISTERQUALITY AENOR: ISO9001:2008 Certificates Products Felguera Melt,S.A. components onthe11.B. Fortuna lineforMetro for ErgoseandAthens Metro;specialrail and completeengineering ofrailcomponents this field,thecompany carriedoutthedesign and suppliesonlyfromSpanishcompanies. In design ofhigh-speedcrossingsusing technology requested FelgueraMelttoparticipate inthe In termsofengineeringprojectsin 2009,ADIF special componentsforthePortofBarcelona. the BarcelonaandValenciametronetworks; (a junctionandtwoswitches);componentsfor equipment forline11oftheMetrodeMadrid de InfraestructurasFerroviarias(ADIF);special high-speed section,alldeliveredtoAdministrador a gauge-switchdevicefortheGerona-Figueras conventional devicesforhighspeedlinesand Plan deDinamización(RevitalisationPlan), mentioning arethefollowing:equipmentfor of railsystemoperators.Ofthese,worth various componentsandequipmenttoanumber On thedomesticmarket,FelgueraMeltsupplied company. that railtrackmaterialwassuppliedtothis especially thelatterasthiswasfirsttime and AtikkoMetro(Athens)areworthhighlighting, which theworksexecutedforErgose(Greece) rail sectorwenttotheinternationalmarketsof During 2009,28%ofproductionaimedatthe least affectedbythecrisis. an increasedof56%astherailsectorwas level. However,therailproductionlinenoticed downturn inthewindpowersectoronaglobal international financialcrisiswhichcauseda the foundryproductionlinedueto generator market,suffereda78%decreasein and foundrycomponentsforthewindturbine networks, aswellHadfieldsteelcrossovers and otherrailtrackequipmentfortram in design,manufactureandsupplyofturnouts Felguera Melt,thegroupsubsidiaryspecialised General Manager:CarlosRuizCornejo comparison to2008. for railcrossingstoincreaseby34% in crisis in2009,whichallowedfoundry production sector wasoneofthefewnotaffected bythe In contrastwiththewindpowersector, therail power market. on thedepletedandhighlycompetitivewind machines lessexpensivetobeablecompete purchases toChinainthehopeofmakingtheir wind turbinemanufacturerswhoshiftedtheir prices. Greatpressurewasreceivedfromthe demand causedadropofnearly40%insale year's productionwenttothisOEM.Thefallin in theUnitedStatesweredelivered;57%of year, allcomponentsdestinedforGeneralElectric power sector.Duringthefirstsemesterof manufacturers giventhedownturninwind with variousorderscancelledbywindturbine The foundrylinesufferedtheeffectsofcrisis speed prototypes. operator andothers,includingonSpanishhigh- Madrid andwilleventuallybeappliedbythis elastic railswhichisbeingtestedbyMetrode Felguera Meltdesignedafastenerforhighly has beenacceptedbybothoperators. ADIF andMetrodeMadridwhoseapplication stock railsfortheMaintenancedepartmentsin to determinepermissiblewearonswitchand Also in2009,aninvestigationwascarriedout transforms intonewordersforthecompany. into stations,etc.Thisisanactivitythatnormally companies wasalsoestablishedtoresearch Technical collaborationwithotherconstruction Felguera Meltwillcarryouttheseworks. Ventas, PríncipePío),withagreatchancethat Mirasierra, Line2,Argüelles,CuatroCaminos, projects tobeexecutedin2010(Line9- Madrid todesignspecialrailequipmentfor The collaborationcontinueswithMetrode for ADIF(Gerona-Figuerassection). Valencia Port;aswellgauge-switchdevices de Madrid,MetroBarcelona-Bellbitgeand 6 Felguera Rail, S.A. General Manager: Carlos Ruiz Cornejo 53
The core business of Felguera Rail is the company carried out a record 635 welded manufacture of rail components for high-speed crossings. This increase of external business networks, complementing the activity that turnover resulting from new customers has Felguera Melt carries out in this field. At its meant a significant increase in production and workshops in Asturias, where it has a surface profit figures compared to those obtained in area of over 54,000 square metres, 2008. mechanisation and welding is carried out on rail crossings as well as research and development During 2009 the Lloyd´s Register Quality on this type of equipment for the rail sector. Assurance certificates for quality and environmental protection according to ISO This subsidiary of Duro Felguera is the only 9001:2000 and ISO 14001: 2004 standards were Spanish company (except for RENFE) that has renewed. The health and safety certificate the adequate installations and state-of-the-art provided by Auditores del noroeste for the machinery to mechanise and weld crossings OHSAS 18001:2007 standard was also obtained. and points for high-speed rail networks to the highest levels of quality.
Felguera Rail's line of business for customers other than Duro Felguera grew in 2009, and the Products Mechanisation of monobloc crossings: joint barring for frogs, profiles 54E1 and 50E1: adif, metro madrid, ratp (France)
Mechanisation, butt & flash welding of frogs profiles 54E1, 60E1and 50E1: adif, metro madrid, ratp (France), Ergose (Greece)
Mobile points crossings
Mechanisation of switch rails and stock rails, low asymetric profiles 54E1A1, 60E1A1 and vignole profiles 54E1 and 60E1
Mixed rail sections 54E1 / 60E1 and RN45 / 54E1
Preassembled rail track devices on concrete slabs and concrete sleepers: underground, conventional and high-speed rail systems 6 Manufacturing Segment 54 • • • • • • • • • • • • • • • • • • • • • • • • Skids andwheelsforbuckets Transfer equipmentandcranes Gantries andgiratoryplatforms handling yards Steelworks andBulk ISO 3034-2 PECAL/AQAP 120 (undergoingrenewal) OHSAS 18001:2007 UNE-EN ISO9001:2000 Certificates: ASME: U,U2,SyNB Stamps: Vacuum equipment Cryogenic modules beams Positioning equipmentforproton Centres Laboratories andResearch Suction anchors,chaintableandpendulums Swivel stacks Petrochemical (off-shore) Distributors andinjectors Gates andvalves Turbines andgenerators Hydraulic Energy Heat exchangers Waste containers Nuclear Energy Axial andcentrifugalfans Coils andheatexchangers Milling andgrindingequipment Equipment forHRSGs. Power Generation casings Mechanisation ofaxles,hubs,frames, for windturbinegenerators Mechanisedandweldedcomponents Wind Energy health &safetymanagement Quality, environmentaland Products Felguera ConstruccionesMecánicas,S.A. nuclear wastecontainers. distributors, etc.) andthenuclear,mechanising large componentsforturbines,(rings, coils, on thehydraulicpowersectormanufacturing to previousyears.Therefore,FCM hasfocussed slowed downintermsofgrowthrates compared turbines, thedomesticwindpower market company continuedtomanufacture wind In thepowergenerationsectoralthough supplied mountedandreadytobeinstalled. parts andthecompletetower,whichisfinally hydraulic andnitrogentestingofthevarious processes. Thisiscompletedwitherection, nickel alloysandverystrictmechanisation type ofprojectincludereinforcingweldswith The highestrequirementsassociatedwiththis platforms. and anchoragesystemsfordeepwateroil equipment destinedforcrudeextractiontowers manufacturing andassemblyprojectson In theoff-shoresector,FCMcarriedoutvarious Belgium andGermany. European market,mainlydestinedforHolland, company's totalturnoverandoccurredonthe International salesin2009cameto55%ofthe chemical industry. hydraulic andnuclear)researchcentresthe sector (off-shore)powergeneration(wind, of businessasinpreviousyears:petrochemical to developitsmainactivitiesinthesamelines Over thelengthof2009companycontinued research centres,andtheinfrastructuresector. power generationsectors,laboratoriesand mechanised-welded partsfortheindustrialand manufacturing industrialequipmentand the DuroFelguerasubsidiaryspecialisedin Felguera ConstruccionesMecánicas(FCM)is
General Manager:AnaIsabelBernardoPérez cyclotrons usingprotonbeams. of amanufacturingprocessoncancertreating of LinearAcceleratorXFEL,andthedevelopment turbines, weldingprocessesforcryomodules waste containers,rotorsandstatorsforwind coils, off-shoreplatformanchorage,nuclear manufacturing processesforsuperconductive In 2009,R&Dactivitiestookplacein aims. proton beampositioningequipmentformedical manufacturing cryomodules,cyclotronsor (CERN FERMILABHASYLABKEKDLRITER) research projectsatinternationallaboratories company hasalsobeenhighlyactiveonmajor carbonatation systemsandautoclaves.The out onthemanufactureofdryingtanksfor For thechemicalindustry,projectswerecarried 6 Duro Felguera around the world
Ongoing projects Offices abroad • Argentina • Peru • Venezuela • Mexico • India • Japan • USA • Brazil
America • Mexico • Peru • Venezuela 55 • Brazil • Chile • Argentina Europe • UK • Ireland • Holland Asia • India 6 7 56 Corporate Responsibility Report The average workforce of the group grew by 10% in 2009, 57 rising to 2,372
In a scenario where the crisis presided over the The average workforce of the group during the economy and had a negative impact on the year rose to 2,372, meaning an inter-annual power and industrial sector where Duro Felguera increase of 215 workers, which in relative terms operates, employment is one of the main is equivalent to a 10% rise, eight points above variables to judge a company as far as Corporate the previous year. In terms of annual average, Responsibility. In this sense, 2009 closed with a third of the personnel are technical and an increase in the workforce due to greater administrative staff and the rest are workers. amounts of activity registered mainly by the companies in Services segment of the group. The business increase in the Specialised Services segment meant a notable rise in personnel for Training its professionals continues to be one erection work in the field, which contrasts with of the priorities of the company as well as its the slight fall in more qualified personnel and concern for safety and innovation, to which it with the acute reduction of the workforce in the pays particular attention. Of almost equal major projects areas and the companies importance is the information supplied to the belonging to the Manufacturing segment. markets in order to maintain maximum transparency of business development. On 31st December 2009 the company had 2,255 workers (3.3% more than a year before) of The internal reorganisation of the group into which 40% were technical and administrative four segments of activity (Power Systems, staff. In comparison with the close of 2008, this Industrial Plants, Specialised Services and professional group was reduced by 2.9% and Manufacturing) and the opening of the new stood at 905 members. For staff falling into the headquarters in Gijón (Asturias) was a category of "workers", at the end of the year progression in consolidating the company's numbers stood at 1,347; a rise of 7.6%. new business profile which is decidedly orientated towards project management and the An analysis of the workforce by segments shows international markets. how in 2009, the importance of the Specialised Services segment was reinforced on the On the employment front, 2009 was marked by personnel side, given that the group of a growth in the group of professionals making companies dedicated to this type of activity up the workforce despite the general situation (erection, commissioning, operation and Evolution of average workforce of a financial crisis affecting the sectors where maintenance of industrial and power generation the company operates. Furthermore, and in facilities) concentrated 48.6% of the company's 2,372 accordance with the progressive orientation workforce at the end of the year, i.e. 1,096 2,113 2,157 towards major power and industrial projects people. 1,945 1,951 and providing specialised services to these sectors, the gross majority of the workforce In comparison to the previous year's close, it was concentrated in the segments dealing with was the only segment where employment these lines of business. Of special significance increased, by 23.8%, which is a rise of 200 has been the rise in personnel assigned to workers. Services.
2005 2006 2007 2008 2009 7
The two segments specialised in the to projects outside Spain, which is 12.6% of its management of major projects (Power Systems workforce. The company has personnel working and Industrial Plants), making up two thirds of in twelve countries in Europe, Latin America Duro Felguera's turnover, had a workforce of and Asia. 58 527 members in total at the end of 2009, 12.2% less than the previous year and 23.3% of the In order to attend to the needs of the workers group's total number of personnel. Furthermore, on foreign assignments, in 2009 the group's the five workshops making up the Manufacturing "Servicio de Movilidad Internacional" segment reduced personnel by -7.2% to 542 (International Mobility Service), set up two years workers; 24% of the company's total. ago within the Human Resources Department, arranged transfer of workers to and from projects The percentage of the workforce with permanent in countries like Venezuela, Brazil, Argentina, contracts at the end of 2009 was 35.6%; slightly Chile, Romania, United Kingdom or India, dealing lower than last year. The increase in temporary with the formalities required, needs and personnel has already been explained by the conditions abroad. The service also maintained growth in erection activities on power generation personal contact with these workers before, installations, where needs for teams of workers during and after their international assignments. are different depending on each project phase. The International Mobility Service has During the last few years, this greater amount information and practical guides for various of activity in the services companies, which is countries, general information and current news highly labour intensive, has been concentrated related to international assignments which is abroad to a large extent, requiring the movement freely available to all personnel on the Corporate of an ever increasing number of workers. Intranet. In addition, in collaboration with the various subsidiaries of the group, information During 2009, Duro Felguera had around 300 is provided on the cost of living and expatriation people on an almost permanent basis assigned conditions at different destinations. 7 Corporate Responsibility Report Distribution of workforce by segments Distribution of workforce by professional groups
4%
24% 59.7% 36% Specialised 1.096 Workers 1,347 Services % Technical staff 811 49 Manufacturing 542 Administration staff 97 Industrial 328 14% Plants Figures as at 31/12/2009 Power Systems 199 9% Others 90 4.3% Figures as at 31/12/2009 The arrangement of visas for countries like one silver award for Long Service. Felguera China, Bangladesh, Saudi Arabia, Equatorial Montajes y Mantenimiento followed with 10 Guinea or India among others was also in high workers reaching 35 years in the company. The Evolution of average age demand due to the growing internationalisation remaining awards belong to Mompresa, Tedesa, of the company's business. Plantas Industriales, Energía and Duro Felguera, S. A. 41.8 The average age of the Duro Felguera workforce 41.3 remained practically stable compared to last Training has always been a priority for Duro 41.0 year at 40.6 years old. By age groups, the under Felguera and even more so (if that is possible) 40.6 forties represented 58.6% and of equal at this time given that the constant 40.2 significance were the under thirties at 21%. transformations being experienced by the company's businesses demands a permanent By business segments, the youngest average renewal of the workforce's abilities at all age can be found in Specialised Services at 38.8 professional levels. years old, followed by Power Systems which is 2005 2006 2007 2008 2009 just slightly over 40. The oldest average age is In 2009, 117 courses were given, 27% more in the Manufacturing segment at 43.3 years old than last year, meaning 22,315 hours of training and Industrial Plants at 42.2. and with more than 550 company workers taking part. In the occupational training area, two Heat The presence of women in the group remained stable during 2009 with an average of 221 women on the workforce, i.e. 9.3% of the total number of personnel. The participation of women The company has attained in the company, whose level is still 70% higher than only five years ago, did not increase in the lowest accident and incidence 59 2009 given that the rise in employment, as we rates in the last 8 years have already seen, centred on erection activities at power generation and industrial installations where there are hardly any female workers. Insulation Specialist courses were provided to With reference to absenteeism, after the 26 students over the length of 14,640 training considerable decline registered in 2008, this hours. parameter was practically stable during 2009 and remained at 4.8%, a very low rate compared The company maintained the employment link to the average within the sector where the on the corporate web page "Trabaja con nosotros" company operates. and it was very active in 2009. This allows users Accident index rate to manage and send their CVs and apply for the As is traditional, December saw the presentation various openings that the group has to offer. In 12.85% of the Long-Service awards given to workers of the same vein, the demands for courses by the 10.75% the various subsidiaries in the group who have company's professionals were arranged via 9.17% 9.08% 8.87% served in the company for 25 or 35 years. "FormaT" within the corporate intranet. As in previous years, in 2009 the Prevention of Labour In 2009, 63 gold and 3 silver awards were Risks Service was very active throughout the presented. The most numerous group came companies making up Duro Felguera, paying from Felguera Construcciones Mecánicas with special attention to the recent additions to the 21 workers who served for 35 years followed group or to those where production systems by Felguera Calderería Pesada, with 16 gold and present greater risks. The training plans, risk 2005 2006 2007 2008 2009 Duro Felguera has increased collaboration 60 with universities and technology centres in the field of R&D
studies, inspection of installations, hygiene In reference to preventing accidents at work, control and evaluations have once again been risk evaluation was the basis for safety planning the basic activities in this field whose aim is to to identify specific, new or emerging risks and reduce the accident at work rates. to guarantee the greatest level of safety and protection. A total number of 6,134 safety The permanent health & safety challenge for a activities were carried out which included task group of companies with such a wide range of analyses, safety reports, protocols, work activities and technological characteristics and procedures and safety instructions and these with entirely different prevention needs, has were complemented with 11,634 sessions on been an incentive to maintain and encourage training and information. the health & safety management system in operation under the OHSAS 18001:2007 For the medicine at work section, 2,441 job- standard. A considerable number of safety related medical check-ups were carried out as measures were carried out in 2009 in order to well as 1,078 first-aid actions. pass the audits which maintain the certificate and the internal audits that the system itself In 2009 Duro Felguera made special efforts in demands. the field of Research, Development and Innovation, commencing projects whose total In 2009, if we look at the number of accidents costs amount to 8.5 million euros and whose at work, the accident rate was maintained at objective is to develop new products and levels of previous years. 210 proceedings were processes to maintain the company at the registered for temporary absence from work, forefront of the international market. Over the representing an incidence rate of 8,87%. The year, five new professionals joined the company improvements in working conditions and control on tasks related to R&D. of industrial risks have provided the best incidence rates in the last eight years. Duro Felguera has increased the number of 7 Corporate Responsibility Report Regarding other accident rate parameters, a real projects where it collaborates with universities, decrease can be seen in comparison with the technological centres and other companies. 12 previous year both in the rates of lost labour new developments started in 2009 and another days and the average duration of sick leave. 7, which had started in previous years, were successfully completed. Among the new In addition and over the length of the year, a activities are: those destined for both the nuclear wide range of industrial health programmes fission and fusion markets; those related to were developed. These quantified and evaluated investigating totally new processes and analysing risk factors of physical origin as well as chemical materials with which the company had never and biological agents present in the work worked before; and developing welding environment. The follow-up and control of this processes different to those known. These group of factors lead to 209 reports and health projects are being carried out with companies evaluations for exposure to chemical from various countries. contaminants in their solid, liquid or gas states, and physical contaminants in their various energy In addition to working on activities which will forms. These gave rise to 303 analyses of heavy assure the presence of the company on research metals, fumes and dusts. projects of the first order led by major European 7
61
laboratories and research centres, Felguera prototype resulting from these investigations. Construcciones Mecánicas successfully In line with its environmental protection policy, concluded its studies on the manufacturing Duro Felguera has continued with the CENIT process of radiotherapy equipment for the CO2 project started in 2006, which will finalise treatment of cancer using proton beams. in 2010 and whose fundamental objective is the reduction of CO2 emissions. Felguera Calderería Pesada started research on new materials and manufacturing processes for Felguera Melt in cooperation with the University reactors that will guarantee the supply of and technology centres in Asturias continues petroleum derived fuels at reasonable prices with work of major importance to the company and adapting them to new environmental safety commenced in 2008, and whose finality is to demands. To this aim, it has been supported by lengthen the life of rail crossings by analysing the University of Oviedo and Technology Centres the different factors that affect the micro-porosity whose participation will mean great advances of manganese steel during the manufacturing in this field. process.
For the management of major turnkey projects At the same time, this subsidiary has started to within the power and industrial plants sectors, design new elements and make improvements new management tools were developed which to equipment for underground, tram and train will make important reductions to execution rail systems. The aim is to improve performance schedules on projects that the group carries by lowering maintenance, increase comfort for out. the passenger and make environmental protection improvements. In this way the Mineral treatment plants are still one of the main company will add value to its products, assuring lines of business for Duro Felguera Plantas its continuity on the market. Industriales. To be able to maintain its competitive vantage point, this subsidiary started Lastly and worth highlighting is the research feasibility studies to mine ferruginous hard being carried out by Montajes Eléctricos quartzite deposits in cooperation with one of its Industriales to optimise the erection of material Venezuelan customers. handling and elevating machinery in automatic warehouses where height restrictions limited In the field of renewable energies, Duro Felguera their installation until now. Plantas Industriales is participating on a project along with another four companies, technology Of note in the Corporate Governance area, is centres and universities in various parts of Spain. the appointment of José María Nebot Lozano as secretary to the Board of Directors, a post The focus is on trying to deal with the problems which he started to occupy in September, in the wind power market and to make the substituting Guillermo Quirós Pintado. The new turbines more potent. Therefore, the consortium secretary of the Board is a State lawyer on leave is researching the design, manufacture and of absence and member of the Real Academia optimum construction methods of wind turbine de Jurisprudencia y Legislación (Royal Academy towers made of steel and concrete. The project of Jurisprudence and Legislation). will finalise in 2012 with the installation of a 62
The Internal Audit and Risk Control Department at the GlogauAIR centre in Berlín over a period created in mid-2008, centred a great part of its of two months and after that a period of post- work on matters related to: complying with production at the Laboral Production Centre. internal management standards; evaluation of Their creations will be exhibited at the Laboral internal control; reviewing the veracity of in 2010. accounting information; and the prevention and detection of fraud within the organisation. The company also collaborated with the Prince of Asturias Foundation (being a patron) as well In addition, towards the end of the year, works as with the Marino Gutiérrez Suárez Foundation commenced on implementing a new Code of in La Felguera (Asturias) on the watchdog Conduct aimed at all the workers in the company committee, and with the Museo de la Siderurgia and which makes respect for the law and human (Steel Industry Museum) in the same town, to rights a priority, in line with the commitment which it lent several pieces and furnishings from made by Duro Felguera and backed by its its old installations. adhesion to the UN World Compact and by belonging to the Spanish association which In addition, Duro Felguera supported the works watches over its compliance. carried out by the Fundación Cultural Hispano- Brasileña (Hispanic-Brazilian Cultural Foundation) Throughout the year and in order to maintain and especially the project to produce an maximum transparency on the market, directors electronic version of the Revista de Cultura of the company made several presentations to national and international analysts and investors.
As it has become usual in the last few years, the company was invited to explain its situation and perspectives on the Madrid and Barcelona 7 Corporate Responsibility Report stock exchanges.
Regarding sponsoships and patronage in 2009, Duro Felguera maintained its cooperation with various social and cultural entities in the Principality of Asturias. Worth mentioning is the support given to Laboral Centro de Arte y Creación Industrial to set up an archive of Asturian artists, as well as to train artists under the age of 45 with the first course of the programme called Ayudas a la Producción Artística.
In 2009, projects belonging to the Asturian artists Santiago Lara, Paula Fernández and Fernando García-Dory were selected. The artists carried out research and pre-production work Brasileña (Brazilian Culture Magazine) on the foundation's website making the entire magazine collection available to researchers and the public in general. The magazine is edited by the Brazilian embassy in Madrid and was founded by João 63 Cabral in 1962. Its objective has always been to spread the vast production of Brazilian culture in the last 50 years among Spanish speakers.
In the field of sport, the company sponsored the Unión Popular de Langreo team for the second year running, the main football team of the Asturian council going under the same name, which plays in group II of third division Spanish football.
Duro Felguera's sponsorship includes the patronage of the 13 football teams making up the club where nearly 250 children and teenagers, between the ages of 5 to 18, play. 7 8 64 Directory 65
Headquarters Internal Audit & Risk Control Industrial Plants e-mail: [email protected] Parque Científico Tecnológico Duro Felguera Plantas Industriales, S.A. C/ Ada Byron, 90 New Business Developments Parque Científico Tecnológico 33203 Gijón, Asturias (Spain) Ph.: +34 98 519 93 57 C/ Ada Byron, 90 Fax: +34 98 519 90 57 33203 Gijón, Asturias (Spain) Chairman & CEO e-mail: [email protected] Tel.: +34 98 519 92 32 Ph.: +34 98 519 91 03 Fax: +34 98 519 90 59 Fax: +34 98 519 90 50 Purchasing Department e-mail: [email protected] e-mail: [email protected] Ph.: +34 98 519 93 02 / +34 98 519 93 04 Fax: +34 98 519 90 58 Industrial Plants Finance CEO e-mail: [email protected] Ph.: +34 98 519 91 77 Ph.: +34 98 519 91 03 Fax: +34 98 519 90 53 Fax: +34 98 519 90 50 Computer Systems Department e-mail: [email protected] Ph.: +34 98 519 90 21 Commercial Department: Fax: +34 98 519 90 63 Angel Pelegry Cuesta Corporate Departments e-mail: [email protected] e-mail: [email protected] Ph.: +34 98 519 92 02 Fax: +34 98 519 90 59 Board Secretary & Legal Counsel Madrid Office Ph.: +34 98 519 91 16 Production Department: Fax: +34 98 519 90 51 C/ Orense 58, 12ª A+B Raúl Serrano Martínez e-mail: [email protected] 28020 Madrid, Spain e-mail: [email protected] Ph.: +34 91 598 01 50 Ph.: +34 98 519 92 43 Fax.: +34 98 519 90 59 Business & Organisation Fax: +34 91 598 01 26 Ph.: +34 98 519 91 32 e-mail: [email protected] Engineering Department: Fax: +34 98 510 90 50 Roberto Pérez López e-mail: [email protected] Power Systems e-mail: [email protected] Ph.: +34 98 519 92 10 Fax: +34 98 519 90 60 Economic Financial Department Duro Felguera, S.A. Energía Ph.: +34 98 519 91 88 Parque Científico Tecnológico Felguera-IHI, S.A. Fax: +34 98 519 90 52 C/ Ada Byron, 90 Parque Empresarial Las Rozas e-mail: [email protected] 33203 Gijón, Asturias (Spain) C/ Jacinto Benavente, 4 Ph.: +34 98 519 93 52/86 28232 Las Rozas, Madrid (Spain) Human Resources Fax: +34 98 519 90 54 Ph.: +34 91 640 20 51 Ph.: +34 98 519 90 13 e-mail: [email protected] Fax: +34 91 640 21 00 Fax: +34 98 519 90 62 e-mail: [email protected] e-mail: [email protected] Power Systems Finance Ph.: +34 98 519 91 91 Duro Felguera Servicios Communication & Image Fax: +34 98 519 90 53 Ph.: +34 98 519 91 04 Dirección General Fax: +34 98 519 90 50 C/ Rodríguez Sampedro, 5 e-mail: [email protected] 33206 Gijón, Asturias (Spain) Ph.: +34 98 517 94 95 Felguera Montajes y Mantenimiento S.A. Ph..: +34 98 517 94 94 Subsidiaries Fax: +34 98 534 64 84 e-mail: [email protected] Acervo, S.A. C/ Marqués de Sta. Cruz, 14 Felguera Revestimientos, S.A. (Feresa) 33007 Oviedo, Asturias (España) Ph.: +34 98 517 94 94 Ph.: +34 98 519 91 99 Fax: +34 98 534 64 84 Fax: +34 98 519 90 52 e-mail: [email protected] Representative Offices Montajes de Maquinaria de Precisión, S.A. abroad (Mompresa) Ph.: +34 98 517 95 05 Brazil Fax: +34 98 534 64 74 Duro Felguera Do Brasil e-mail: [email protected] Avenida das Americas nº 3.500, Sala 614, Edificio 8 Le Monde, Condominio Londres Operación y Mantenimiento, S.A. (Opemasa) Barra da Tijuca, CEP 22640-102 Ph.: +34 98 517 94 49 Rio de Janeiro Fax: +34 98 534 64 74 Brazil e-mail: [email protected] India Montajes Eléctricos Industriales, S.L.U. (MEI) Felguera Grúas y Almacenaje, S.A. Ph.: +34 98 569 19 48 - +34 98 569 09 65 Flat 201, Srinivas Towera Fax: +34 98 534 47 83 Pandurangapuram 66 e-mail: [email protected] / Visakhapatnam 530 003 [email protected] Andhra Pradesh, India Ph: +91 91 775 57757 Felguera Tecnologías de la Información S.A. e-mail: [email protected] Parque Tecnológico de Asturias, P-13 B 33428 Llanera, Asturias (Spain) Japan Ph.: +34 98 527 29 89 Oficina en Tokio Fax: +34 98 527 59 60 3-21-2, 11th Floor, Helios Kannai Building e-mail: [email protected] Motohama-cho, Naka-ku Yokohama, Kanagawa, Japan Manufacturing Ph.: +81 45 222 0431 e-mail: [email protected]
8 Directory Felguera Calderería Pesada, S.A. www.duro-felguera.jp Travesía del Mar, s/n 33212 Gijón, Asturias (Spain) Mexico Ph.: +34 98 532 26 00 Duro Felguera, S.A. Fax: +34 98 532 56 50 Duro Felguera Power México, S.A. de C.V. e-mail: [email protected] Felguera-Diavaz Proyectos México, S.A.de C.V. Felguera Melt, S.A. Av. Revolución, 468, Piso 3 Prolg. Ing. Fernando Casariego, s/n Col. San Pedro de los Pinos 33930 La Felguera, Asturias (Spain) C.P. 03800 Mexico, D.F. Ph.: +34 98 569 56 11 Ph.: +52 55 50 62 13 00 Fax: +34 98 569 64 65 Fax: +52 55 52 78 49 13 e-mail: [email protected] e-mail: [email protected]
Felguera Rail, S.A. Peru Ablaña s/n Turbogeneradores del Perú, S.A.C. 33600 Mieres (Asturias) Spain Avda. José Pardo 1167 Oficinas 204 y 307 Ph.: +34 98 545 41 47 Miraflores (Lima) Peru Fax: +34 98 545 39 03 Ph.: +(51-1) 2421672 e-mail: [email protected] Fax: +(51-1) 5776924
Felguera Construcciones Mecánicas, S.A. Venezuela Crta. de Langreo-Oviedo, s/n Felguera Parques y Minas de Venezuela, S.A. 33930 Barros, Asturias (Spain) Torre CEM, piso 7, Oficinas 7-01 y 7-02 Ph.: +34 98 567 97 00 C/ Gury con Avda. Guayana Fax: +34 98 567 97 02 Alta Vista, Puerto Ordaz e-mail: [email protected] Estado Bolívar, Venezuela Ph.: +58 286 718 0123/ 0124/ 0136 Técnicas de Entibación, S.A. +58 286 971 9773 (Tedesa) +58 286 971 9120 Polígono de Silvota, parcela 10 Fax: +34 98 519 90 59 33192 Llanera, Asturias (Spain) e-mail: [email protected] Ph.: +34 98 526 04 64 Fax: +34 98 526 14 16 e-mail: [email protected] 9 Corporate Governance 67 Report 2009 Index
69 Corporate Structure Share capital and major shareholders Private agreements between shareholders Treasury stock
70 Board of Directors
Members of the Board 68 Status of the Directors Composition (number, appointment, requirements, re-appointment and vacation) Members of the Board Chairman Vice-chairman Secretary Vice-secretary Procedures (meetings and agreements) Board Committees Audit Committee Committee for Appointments, Remuneration and Expediting of Standards Executive Committee for Contracts, Investments and Projects
78 Management Work Committees Management Committee Risk Committee
79 Connected Operations
79 Inter-group Operations
80 Annual General Meeting of Shareholders (AGM) AGM Regulations Information on the preceding AGMs Costs arising from the last AGM Information means for shareholders 9 Corporate Governance Report 85 Audit
86 Relevant Events 1. Corporate Structure 9 1.a Share Capital and Major Shareholders
The share capital of DURO FELGUERA,S.A. on 31 December 2009 was 51,008,300.50 euros, integrated by 102,016,601 bearer shareholders represented by means of book-entry securities with a nominal value of 0.50 euros each, totally subscribed and disbursed. All of the shares are officially quoted on the Stock Markets of Madrid, Barcelona and Bilbao, having the same political and economic rights. On 31 December 2009 the major shareholders with a share capital of 5% or more were: 69 Inversiones Somió, y Vinculadas 23.90 % TSK Electrónica y Electricidad, S.A. 10.01 % Residencial Vegasol, S.L. 16.10 % Cartera de Inversiones MELCA, S.L., y vinculadas 6.32 % Construcciones Termoracama, S.L. 7.24 % LIQUIDAMBAR, Inversiones Financieras, S.L. 6.05 %
The remaining company shares constitute participations that have not been communicated to the company and which are not on record, except for those attending or represented at the company's general meetings.
1.b Private Agreements Between Shareholders
The company, to 31 December 2009, is not aware of any private agreements nor if the Stock Exchange Commission has been informed of any.
1.c Treasury Stock
The Board of Directors has exercised the right granted in the AGM held on 7 May 2009 and has acquired company shares which at 31 December 2009 were equivalent to 1.62% of share capital. 2. Board of Directors
MEMBERS OF THE BOARD
CHAIRMAN & CEO Mr. Juan Carlos Torres Inclán VICE-CHAIRMAN Inversiones Somió, S.L. (represented by Mr. Juan Gonzalo Alvarez Arrojo)
CHIEF EXECUTIVE OFFICER Inversiones El Piles, S.L. (represented by Mr. Angel Antonio del Valle Suárez)
70 MEMBERS Construcciones Urbanas del Principado, S.R.L. (represented by Mr. Javier Sierra Villa) Construcciones Termoracama, S.L. (represented by Mr. Ramiro Arias López) Residencial Vegasol, S.R.L. (represented by Mr. José Antonio Aguilera Izquierdo) Construcciones Obras Integrales Norteñas, S.L. (represented by Ms. Marta Aguilera Martínez) Liquidambar Inversiones Financieras, S.L. (represented by Mr. José López Gallego) Mr. Marcos Antuña Egocheaga Mr. Acacio Faustino Rodríguez García Mr. José Manuel Agüera Sirgo
SECRETARY NON-MEMBER Mr. Guillermo Quirós Pintado (1) VICE-SECRETARY NON-MEMBER Mr. Secundino Felgueroso Fuentes LEGAL ADVISOR Mr. Agustín Tomé Fernández
HONORARY CHAIRMAN Mr. Ramón Colao Caicoya (1) Until August 2009, substituted by Mr. José Mª Nebot Lozano
STATUS OF DIRECTORS
EXECUTIVE DIRECTORS Mr. Juan Carlos Torres Inclán Inversiones El Piles, S.R.L.
EXTERNAL DIRECTORS Construcciones Obras Integrales Norteñas, S.L. Liquidambar Inversiones Financieras, S.L. 9 Corporate Governance Report Inversiones Somió, S.R.L. Construcciones Urbanas del Principado, S.R.L. Construcciones Termoracama, S.L. Residencial Vegasol, S.R.L.
INDEPENDENTS Mr. Marcos Antuña Egocheaga Mr. Acacio Faustino Rodríguez García 9 Mr. José Manuel Agüera Sirgo 1. Composition
1.1 NUMBER OF BOARD MEMBERS In accordance with the company by-laws, the Board of Directors is made up of a minimum of six (6) members and a maximum of twelve (12).
The Shareholder's Meeting at the Board's proposal will determine the number of members of the Board within the limits fixed by the company by-laws. The Shareholder's Meeting will appoint, ratify and re-elect the directors.
The Board will also designate a legal advisor for the Board of Directors. 71
1.2 APPOINTMENT The Board members will be appointed by the Shareholder's Meeting or by the Board of Directors in accordance with the standards contained in Company Law (Ley de Sociedades Anónimas).
The proposals made by the Board of Directors submitted to the Shareholder's Meeting and the decisions taken by the Board by virtue of the co-opting faculties it has legally attributed must be preceded by the corresponding proposal and report from the Committee for Appointments, Remuneration and Expediting of Standards.
1.3 REQUIREMENTS FOR BEING APPOINTED DIRECTOR In accordance with the Texto Refundido de la Ley de Sociedades Anónimas (TRLSA) (Revised Company Law), to be elected board member by co-option it is necessary to be a shareholder of the company.
In any case, the person to be designated board member or representative of a board member must not be involved in any of the activities classified as incompatible or prohibited by Company Law or the company by-laws.
The office of board member will be compatible with any other function within the company.
The Board of Directors and the Committee for Appointments, Remuneration and Expediting of Standards will make every effort to elect candidates of renowned solvency, competence and experience, taking special care with the posts of independent board member who must comply with these regulations and who will be elected after a formal selection process.
1.4 RE-APPOINTMENT AND VACATION OF OFFICE BY DIRECTORS The Committee for Appointments, Remuneration and Expediting of Standards will be informed prior to the Shareholder's Meeting of the directors proposed for re-appointment by the Board of Directors.
The directors will hold office for a maximum period of six years and may be re-elected.
The Board members elected by co-option will occupy the post up to the date of the following Shareholder's Meeting or until the legal period expires when the following the shareholders' meeting takes place to approve the previous year's accounts.
The Board members will vacate their office when the period for which they were appointed expires, when the Shareholders' Meeting so decides or when they are found to be involved in any of the prohibitions stipulated by law.
The Board members must tender their resignations to the Board and duly resign when they are involved in any of the prohibitions stipulated in Art. 124 of "Texto Refundido de la Ley de Sociedades Anónimas"(Revised Company Law) and/or any other applicable legislation. 9 2. Board Members
2.1 CHAIRMAN The Board of Directors will appoint a Chairman from among its members. The range of powers and in particular whether the Chairman may or may not carry out the functions inherent to the company's top executive will be decided by the Board when being appointed.
It is the Chairman's responsibility to call the ordinary Board Meetings, to decide on the agenda and to chair the 72 debates. The Chairman however will call a meeting of the Board when requested by at least two board members and will include the matters requested in the agenda.
In case of a tie in the voting, the Chairman's vote will be decisive.
2.2 VICE-CHAIRMAN The Board may appoint one or more vice-chairmen who will substitute the Chairman in his absence.
2.3 SECRETARY It is not a pre-requisite for the secretary to be a member of the Board. The Board secretary will aid the Chairman in his functions and will ensure that the Board runs smoothly, being especially responsible for providing the Board members with advice and the necessary information, keep the Company official documentation, record the minutes of Board meetings and witness agreements thereof. The secretary will ensure the legality of the Board's actions and will guarantee that its procedures and rules of conduct be respected and regularly revised.
The secretary will also be responsible for interpreting corporate governance law and will verify that the company complies therewith in accordance with these regulations. In addition, the secretary will analyse corporate governance law recommendations to be included in the company by-laws.
2.4 VICE SECRETARY The Board of Directors may appoint a vice-secretary who need not be a Board member to assist and substitute the secretary in case of absence.
The vice-secretary may attend the Board meetings to substitute or assist the secretary when the Chairman so decides.
3. Procedures 9 Corporate Governance Report
3.1 MEETINGS The Board of Directors will meet at least four times a year and regularly once a month. Furthermore and at the Chairman's prerogative, as many times as deemed necessary for the smooth running of the company. The Board will also meet when at least two members so require and the Chairman will call the meeting.
The regular meetings will be called by any written means addressed personally to each board member with at least one day's notice except for extraordinary circumstances perceived by the Chairman, in which case the Board meeting may be called without complying with this length of notice.
Along with the request to attend each meeting and as far as is possible for the extraordinary sessions, the members will be provided with the necessary documentation and information to discuss the points on the agenda.
The Board will draw up a calendar of regular meetings. . 3.2 AGREEMENTS The Board will be considered valid when at least half of its members attend, be it in person or by representation. When any of the Board members cannot attend a meeting in person, they will make every effort to provide the member who will represent them with the necessary instructions as far as the agenda allows.
Except for the cases where quorum is otherwise established in these regulations and in circumstances required by law, the agreements will be reached by absolute majority of the attendees.
All the matters discussed by the Board of Directors will be secret and the members will maintain the confidential nature of the matters discussed, except when the Board of Directors, considering the company's and shareholders' 73 interests and the transparency regulations of the stock exchange commission, agrees to make certain matters or decisions public. Confidentiality will not be required in those cases where law permits but communication will be made in accordance with legal stipulations.
The legal advisor for the Board of Directors will watch and advise the Board on whether the agreements and decisions are in accordance with law, the company by-laws, the stock exchange commission standards and these regulations. 4. Board of Committees
4.1 AUDIT COMMITTEE
4.1.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATION
The Audit Committee will comprise at least three members appointed among the Board, who will occupy the post over a period of four years. They may be re-elected for the same or less amount of time. The Audit Committee will be made up by a majority of non-executives appointed by the Board of Directors. The chairman will be appointed among the non-executive members and must be substituted every four years though the possibility of re-appointment exists one year after vacating office.
The members of the Audit Committee will be relieved of their responsibilities once the period for which they were appointed has expired, of their own volition or by not being re-appointed board member. The members are subject to the same secrecy and confidentiality rules as the Board members. They will be directly responsible to the Board of Directors.
A secretary with the right to speak but without voting rights and who need not be a Board member will assist the Committee. In addition, any member of the management team or company personnel, with the approval of the Chairman or chief executive officer is obliged to attend the Committee meetings when requested to do so. The Committee may also request the attendance of the auditors.
The Committee will meet as many times as they deem necessary but not less than four times a year, and within the two-week period after each year quarter.
The Committee may operate when half of its three members plus one attend. When the members are not all present, the rule of unanimous instead of majority vote will apply.
The Committee may regulate its internal conduct to improve its performance and may propose modifications to these regulations for the Board of Directors to submit to the Shareholders' Meeting. 4.1.2 OBJECTIVES AND RESPONSIBILITES OF THE AUDIT COMMITTEE
The activities of the Committee have the following objectives:
•To have unrestricted, direct access to all company financial information. •To have unrestricted, direct access to the external company auditors, holding informative and explanatory meetings as necessary. •To supervise compliance with the audit contract, demanding that the auditors' opinion on the annual accounts and the contents of the report be written in a clear and precise manner. 74 •To act as a channel between the Board of Directors and the auditors. •To evaluate the results of each audit and the response of the management team to the recommendations made by the auditors. •To act as intermediary in case of discrepancies between the management team and the auditors regarding the principles and criteria to be applied in preparing financial statements. •To check the company accounts and ensure that the generally accepted accounting principles are applied correctly. •To inform on proposed modifications to criteria and accounting principles suggested by the management as well as those stipulated by law. •To check the integrity and use of adequate internal control mechanisms and to propose or review the appointment or substitution of those responsible. •To approve prospectuses and periodic financial information that the Board of Directors must supply to the markets and their supervisory bodies. •Any other entrusted by the Board of Directors.
4.1.3 COMMITTEE MEMBERS
Mr. Marcos Antuña Egocheaga CHAIRMAN Mr. José Manuel Agüera Sirgo MEMBER Mr. Juan Carlos Torres Inclán MEMBER Mr. Inversiones El Piles, S.L. MEMBER Construcciones Obras Integrales Norteñas, S.L. MEMBER
Mr. Secundino Felgueroso Fuentes SECRETARY NON-MEMBER Mr. Agustín Tomé Fernández LEGAL ADVISOR
4.2 COMMITTEE FOR APPOINTMENTS, REMUNERATION AND EXPEDITING OF STANDARDS
4.2.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATION 9 Corporate Governance Report
The Committee will consist of a minimum of three and a maximum of five components, members of the Board of Directors, who are not directors or executive members of the Board and appointed by majority vote of the Board members.
The appointment will have duration of five years and in any case the same duration as the post of Board member. The members may be re-appointed as many times as necessary as long as they are still members of the Board.
The chairman will be appointed among the members for a period of five years and in any case for the amount of time left to occupy the post of Committee member. In addition, the secretary and legal advisor of the Board of Directors will be considered members of the Committee with the right to speak but no voting rights.
The Committee will meet at the request of the chairman, at the company's registered office or where the chairman decides, whenever the Chairman or the majority of the members or the Duro Felguera Board of Directors decides. 9 In any case, the Committee will meet at least twice a year and coinciding with dates which will allow analysis and study of conditions and information to decide on annual remunerations, appointments of the Board members or top management of Duro Felguera and its subsidiaries. .
Any member of the management team or the company personnel, with approval of the Chairman or chief executive officer, is obliged to attend the Committee meeting when requested to do so.
The secretary will draw up the minutes of the deliberations, transcendental matters and the agreements, which must have the majority vote of the members. 75 The chairman of the Committee will inform the Board of Directors at the first meeting held of the content of the agreements reached by the Committee.
The Committee may regulate its internal conduct to improve its performance and may propose modifications to these regulations to the Board of Directors.
4.2.2 FUNCTIONS OF THE COMMITTEE FOR APPOINTMENTS, REMUNERATION AND EXPEDITING OF STANDARDS
The functions of this Committee are:
•To inform and propose for office members of the Board of Directors, to the Board itself, to decide by co- option when the need to cover a vacancy on the Board arises, or to the Shareholders' meeting.
•To decide and propose contractual conditions or company agreements with the Chairman and the chief executive officer for the Board's approval. To inform and submit the remunerations of the Board members for approval by the shareholders and also that the Board may approve expenses to attend the Board meetings and Committee meetings.
• To inform and submit for approval by the Board of Directors the selection and appointment of Duro Felguera top level management, i.e. staff management, business line managers and managers of subsidiaries; remuneration policies, contract conditions and incentives which will take into account results of their area of the company.
•To supervise management conduct, transparency of company dealings, compliance with the Internal Code of Conduct by the Board Members and management of the company and to inform the Board of conducts or non-compliance with company codes so they may be corrected or to inform the Shareholders if they are not corrected.
Within the scope of its functions is to present any matters it deems necessary before the Board for review and approval.
4.2.3 COMMITTEE MEMBERS
Construcciones Termoracama, S.L. CHAIRMAN Mr. Acacio Faustino Rodríguez García MEMBER Inversiones El Piles, S.L. MEMBER Residencial Vegasol, S.R.L. MEMBER
Mr. Agustín Tomé Fernández SECRETARY & LEGAL ADVISOR NON MEMBER 4.3 EXECUTIVE COMMITTEE FOR CONTRACTS, INVESTMENTS AND PROJECTS
4.3.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATIONS
The Committee is made up of five Board members designated by the Board of Directors for the same period of time as their office of Board member.
The Committee will elect a chairman among its members. The Committee will also elect a Legal Advisor, with rights to speak but without voting rights, who will be the Legal Advisor of the Board of Directors. The secretary, 76 also with rights to speak but without voting rights, will be the vice-secretary of the Board of Directors. Any technical members of Company staff, who are required to do so, will also attend the meetings. The Committee may also be assisted with exclusive dedication by the technical staff that the Committee deems necessary. The appointment of the technical staff will be approved by the Chairman of the company who will decide whether the person named is appropriate for the position. The technical staff will not be members of the Committee.
The Committee will always decide by majority vote of its members and will require the presence of at least half plus one of its members to be valid.
The members of the Committee for Contracts, Investments and Projects will vacate office once the term for which they were elected expires, by resignation or by not being re-appointed member of the Board, but may not be obligated to vacate office without majority vote of the Board.
The members of the Executive Committee for Contracts, Investments and Projects will be subject to the same secrecy and confidentiality regulations as with the Board members, and will inform the Board of Directors directly when requested to do so.
4.3.2 FUNCTIONS OF THE EXECUTIVE COMMITTEE FOR CONTRACTS, INVESTMENTS AND PROJECTS
A| Contracts
With reference to all Duro Felguera, S. A. contracts from the bidding phase to final conclusion, whether they involve the Company directly or indirectly via any of its subsidiaries, in the following cases:
1) Contracts exceeding 200,000 euros. The Committee will:
a) fix the dates for third party companies to present contract proposals and to decide on the manner to publicise and/or request bidding proposals for these contracts; 9 Corporate Governance Report b) modify specifications of request for bids; c) open the sealed bids received containing the conditions of contract offers; d) decide on contracts, and may request any technical assistance to decide on the convenience of subscribing to the contract e) draw up content of the contract, watch over its development, execution and exact compliance up to guarantee expiry date; f) decide on modifications, extensions or renovation of contracts and if any of these were to exceed 200,000 euros, a public request for bids will be made for the extension, modification or renovation. If the Committee considers that it would be more favourable to the company's interests not to make a public request for bids, it will provide the Board of Directors with a report on the matter and it will be the Board's responsibility to make the ultimate decision. 2) Contracts which do not exceed 200,000 euros. The Committee will ensure that the criteria used to award these contracts are in accordance with market prices. If this were not the case, it will provide the Board of Directors with information on the corrective measures to be taken.
B| Investments
With reference to any investment or promise to invest in any type of goods or real estate of any kind, be it directly by the Company or indirectly via any of the subsidiary companies and in whatever form or title used to carry out such investment, the Committee will be entitled to request any information and even request reports from third parties related to any investment exceeding 120,000 euros in the financial year, as well 77 as being empowered to decide on the execution or not of such investments. To this effect, when during the financial year investments are made or promised, which do not reach the amount of 120,000 euros individually, but exceed this amount as a sum, the Committee will be empowered to intervene in any of the investments to follow, whatever the amount involved, be they intended investments or promises to invest in the financial year.
C| Projects
With reference to any offer, commitment or contract to be carried out for customers or future customers of the Company, either directly by the Company or indirectly by any of the subsidiary companies and whose amount exceeds 30,000,000 euros or may be exceeded by future extensions, even if carried out by Consortium Agreements or similar; or, even if the above characteristics are not applicable, the offer, commitment or contract involves appreciable penalty risks above the usual market conditions, difficult payment customers, countries with commercial or political high risk characteristics, etc., the Committee will be empowered to request any information considered necessary before presenting the offer, during execution and up to final completion and to make any decision in the best interests of the Company and will report these decisions to the Board of Directors or propose the most appropriate measures to be taken to the Board.
4.3.3 COMMITTEE MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMAN Mr. Acacio Faustino Rodríguez García MEMBER Residencial Vegasol, S.L. MEMBER Inversiones El Piles, S.L. MEMBER Construcciones Obras Integrales Norteñas, S.L. MEMBER
Mr. Secundino Felgueroso Fuentes SECRETARY NON MEMBER Mr. Agustín Tomé Fernández LEGAL ADVISOR 9 3. Management Work Committes
Although the Management Committee and the Risk Committee are not Board Committees, given their importance in company business developments and risk analysis where contracts are concerned, they are sufficiently relevant as to be included in this report.
1. Management Committee
1.1 FUNCTIONS This Committee, made up of executive directors and the directors of each line of company business, analyses 78 performance of the company. The Committee is informed of project progress, the possibility of new business, deviations occurring in project execution and in general any relevant incidences.
1.2 MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMAN & CHIEF EXECUTIVE OFFICER Inversiones el Piles, S.L. CHIEF EXECUTIVE OFFICER Mr. Antonio Martínez Acebal GENERAL MANAGER ASSISTANT TO CHAIRMAN (1)) Mr. Mariano Blanc Díaz CHIEF FINANCIAL OFFICER Mr. Francisco Martín Morales de Castilla POWER SYSTEMS LINE DIRECTOR Mr. Félix García Valdés INDUSTRIAL PLANTS LINE DIRECTOR Mr. Carlos Ruiz Cornejo MANUFACTURING LINE DIRECTOR Mr. Antonio Mortera Morán SERVICES LINE DIRECTOR (1)Until 30 April 2009
2. Risk Committee
2.1 FUNCTIONS
In general terms, this Committee analyses the risk that certain contracts may have for the company, considering their volume, execution conditions, guarantees, the risk-country component, payment conditions and whether a new field of action is involved.
2.2 MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMAN & CHIEF EXECUTIVE OFFICER 9 Corporate Governance Report Inversiones El Piles, S.L. CHIEF EXECUTIVE OFFICER Financial Management ADVISOR Legal Management ADVISOR 9 4. Connected Operations
The company's major shareholders have carried out significant economic operations for supplies and services with the Corporation, in free competition with other companies outside the share capital of Duro Felguera, S. A. and its subsidiaries, and at market prices.
All operations are analysed and approved by the Contracts Committee without the shareholder involved in the voting or decision making process.
The financial sums of the operations and type of operation are reported to the Stock Exchange Commission. The overall amount of all operations in 2009 was as follows (thousands of euros): 79 TSK, Electrónica y Electricidad, S. A.: 9,836
Cartera de Inversiones Melca, S.L.: 20 Sales 4 Purchases
5. Inter-group Operations
Duro Felguera, S. A., is made up of a group of companies whose activities are frequently complementary and therefore business is strengthened by the various subsidiaries which taken as a whole can offer a more complete service to its clients.
The economic and financial report contains the breakdown of the transactions carried out during 2009 between the companies belonging to the group and associated companies, whether Duro Felguera, S. A is a direct or indirect shareholder, as well as the results to 31 December 2009. All inter-group operations are standard company practice being carried out under ordinary market conditions and are eliminated from the consolidated information when this is drawn up, including the financial operations managed by the parent company and other general staff services. 6. Annual General Meeting of Shareholders (AGM)
1. AGM Regulations
The Annual General Meeting of Shareholders, called and constituted according to law and company by-laws, is the ultimate governing body of the company and represents all of the shareholders. Its agreements are mandatory even for those who do not attend and do not agree with the majority decisions taken, without prejudice to the rights of reply as provided by law.
The Annual General Meeting of Shareholders will be held at the company's registered office or at a place stipulated 80 by the Board of Directors in accordance with law.
1.1 RIGHT TO ATTEND Shareholders of at least two hundred and fifty (250) shares and who according to law have demonstrated ownership of shares at least five days before the date of the general meeting will have the right to attend. The right to attend the general meetings and delegation of rights will be in accordance with the "Ley de Sociedades Anónimas" (Company Law). Any shareholder who has the right to attend may grant representation to attend on any other shareholder. Shareholders who do not possess the number of shares mentioned above in the first paragraph may group together to attend and designate a representative who must be a shareholder. To attend the general meeting, a personalised card will be given on request to each shareholder who has the right to attend which will include indications provided by Law or by the company by-laws.
1.2 RIGHT TO VOTE The attendees at the general shareholders' meeting will have one vote per share owned or represented. As far as fractions are concerned, these may be grouped to exercise the right to vote in accordance with Article 105.3 "Ley de Sociedades Anónimas" (Company Law). Shares not carrying a vote will be governed by provisions in the "Ley de Sociedades Anónimas".
1.3 ORDINARY AND EXTRAORDINARY GENERAL MEETINGS The General Meetings may be Ordinary and Extraordinary. The Ordinary General Meeting will be held on the day designated by the Board of Directors within the first semester of the financial year, to discuss management, approve, if such is the case, the accounts of the previous year, decide on how the results will be applied, and to discuss and agree on any matter affecting the company. Any meeting not included in the above paragraph will be considered Extraordinary.
1.4. ANNOUNCEMENT AND PUBLICITY The date of the General Meetings will be agreed by the Board of Directors and will be announced in the "Boletín Oficial del Registro Mercantil" (Company Register Official Bulletin) and in one of the provincial newspapers with 9 Corporate Governance Report greater circulation at least one month before the day it is to be held. The announcement will state the first day when the meeting may be held and the agenda. A second date may also be proposed which must be at least twenty-four hours after the first. Shareholders who represent at least 5% of share capital may request an addition to the announcement to include one or more points on the agenda. This must be officially sent and received at the Company's registered office five days after the meeting is announced. The supplementary announcement will be published at least two weeks before the Annual General Meeting date. 9 1.5 RIGHT TO INFORMATION All shareholders may request in writing before the date of the meeting or verbally during the meeting any reports or clarifications as necessary on the matters included on the agenda. The Board is obliged to provide information except in those cases where the Chairman considers that publishing of certain data may harm the company's interests. This exception will not be applicable when shareholders representing at least a quarter of the share capital support the request. In the case of the Ordinary General Meeting and in other cases established by law, the announcement of the meeting will indicate what documents are to be submitted for the approval of shareholders and, if such is the case, the report or reports legally foreseen and which are available to be examined and can be obtained immediately and freely at the company's registered office. 81 1.6 REQUIREMENTS OF THE AGM The Shareholders' General Meeting will be considered valid and will come to agreements which will oblige all shareholders, including those absent, who abstain or dissent when the minimum share capital is represented for each case according to the revised text of the "Ley de Sociedades Anónimas", on both the first and second dates set for the meeting, and in accordance with items on the agenda.
1.7 CHAIRMAN AND SECRETARY OF THE AGM The chairman and secretary of the General Meeting of Shareholders will be the same as those of the Board of Directors, or the Vice-chairman, and in their stead those designated by the AGM itself and proposed by the Board of Directors. The role of the Chairman is to conduct the deliberations, deal with any doubts arising from the list of shareholders and the agenda, determine turns of discussion where he can place time limits on each speaker, and close the debates when he considers that sufficient time has been spent on any given matter, and in general, all the powers required to organise and lead the General Meeting of Shareholders. It is the Secretary's role to draw up the attendance list, the minutes of the General Meeting of Shareholders as well as other activities related to the above. Certifying agreements is the role of the secretary or vice-secretary of the Board of Directors with the approval of the Chairman or vice-chairman. If the minutes of the General Meeting of Shareholders are drawn up by a notary public, this will be ruled by current law.
1.8 AGREEMENTS OF THE AGM For there to be consensus at the general meetings be they ordinary or extraordinary and whether they are on the first or second date proposed, at least half plus one of the votes present or represented must be in favour. Agreements reached when the company absorbs another or other companies, will require an ordinary majority as in the first paragraph of this article. For those cases contemplated in article 103 of "Ley de Sociedades Anónimas", a majority of votes defined therein will be mandatory unless by applying the above paragraphs of this article a larger number of votes is required, then in that case the requirement for larger number of votes established in this article will prevail.
1.9 PROCEDURE TO REACH AGREEMENTS Each of the items on the agenda will be submitted to vote individually. It is the responsibility of the Chairman to conduct the voting and he may be helped in this task by two or more freely appointed scrutinizers. Nevertheless, the Chairman of the meeting may decide to submit various items on the agenda to be voted on jointly in which case the result will be understood as if each of the items had been voted on individually if none of the attendees expresses the wish to modify their vote on any one of the items. If this were not the case, the minutes will reflect voting modifications expressed by each of the attendees and the result of the vote corresponding to each of the proposals.
1.10 APPROVAL OF MINUTES Attendees at the General Meeting will be listed at the beginning of the minutes or the list may be attached as an annex signed by the secretary and approved by the Chairman. The list may also be on electronic support in the manner established by applicable standards. The minutes of the AGM may be approved at the meeting itself or within a period of two weeks by the Chairman and two representatives named at the meeting, one representing the majority and the other the minority. The minutes will have executive force once approved by either of the means mentioned above. 9 1.11 SHAREHOLDERS' RIGHTS AT THE MEETING The documents to be submitted for approval by the Shareholders will be made freely available on request in compliance with articles 144 and 212 of the "Ley de Sociedades Anónimas": Annual Report, Balance Sheet, Profit and Loss Accounts and Management Report, all corresponding to the year ending on 31 December both for Duro Felguera, S.A., and for Duro Felguera, S.A. and its subsidiaries (Consolidated). Auditors' Report on Annual Accounts for Duro Felguera, S.A., and for Duro Felguera, S.A. and its subsidiaries (Consolidated). Proposal and application of the Year Results.
1.12 RIGHT TO REPRESENTATION 82 Shareholders who can legally attend are those who at least five days before the date of the meeting have accredited ownership of at least two hundred and fifty (250) shares at any of the entities belonging to "Servicio de Compensación y Liquidación de Valores", who will provide the corresponding attendance cards. These may also be provided by the company at its registered office: Marqués de Santa Cruz, 14, 1º, Oviedo (Asturias), against the deposit of the documentation proving ownership of the shares.
2. Information on the Last General Meetings
2.1 ORDINARY GENERAL MEETING ON 7th MAY 2009
The attendance quorum reached 79.40% of subscribed stocks and shares, with an attendance of 32.18%, and 47.22% represented. The voting results for the items on the agenda were as follows:
FIRST. Review and approval of the management report and annual accounts (Balance Sheet, Profit and Loss Accounts, and Annual Report) of Duro Felguera, S.A., and Duro Felguera, S.A. and its subsidiaries (Consolidated), corresponding to the year 2008 and proposal on how to apply the results of the financial year. Dividends.- 33,665 thousand euros Reserves.- 9,140 thousand euros. Results of the voting (votes): In favour.- 71,237,680 Against.- 9,760,431 Abstentions.- 0
SECOND. Approval of management by Board of Directors in 2008. Results of the voting (votes): In favour.- 71,249,487 Against.- 9,748,624 Abstentions.- 0 9 Corporate Governance Report
THIRD. Authorisation for the Board of Directors to acquire Company shares by the company or its subsidiaries in accordance with "Art. 75, Disposición Adicional Primera y concordantes" of "Texto Refundido de la Ley de Sociedades Anónimas" (Company Law), specifying mode of acquisition, maximum number of shares, maximum and minimum purchase prices and duration of the authorisation, thereby leaving without force the previous authorisation given at the last General Meeting on 9th May 2008. 9 It was agreed to authorise the Board of Directors to acquired company shares up to the maximum stipulated by current law over a maximum period of 18 months, at a minimum price of 1 euro and a maximum of 18 euros. Results of the voting (votes): In favour.- 71,248,507 Against.- 9,749,604 Abstentions. - 0
FOURTH. Appointment or re-election of the Auditors in accordance with Art. 204 of "Texto Refundido de la Ley de Sociedades Anónimas" (Company Law). 83 The result was the re-election of Pricewaterhouse Coopers Auditores, S.L. over a period of three years: for the 2009, 2010 and 2011 financial years to audit the accounts of both the individual Company and the companies that make up the group. Results of the voting (votes): In favour.- 71,249,487 Against.- 9,748,624 Abstentions.- 0
FIFTH. Delegation of powers to formalise or execute the agreements reached, to carry out the mandatory deposit of the annual Accounts, the Auditor's reports and to inform and notify the competent bodies, indistinctly on the Company Chairman, the Secretary of the Board of Directors and its Vice-secretary. In favour.- 71,249,487 Against.- 9,748,624 Abstentions.- 0
2.2 ORDINARY GENERAL MEETING ON 9th MAY 2008
Firstly the number of shares present or represented with voting rights was counted, making an attendance of 79.18% of fully subscribed stocks.
The results of the voting on the various points on the agenda proposed were as follows:
FIRST. Review and approval of the management report and annual accounts (Balance Sheet, Profit and Loss Accounts, and Annual Report) of Duro Felguera, S.A., and Duro Felguera, S.A. and its subsidiaries (Consolidated), corresponding to the year 2007 and proposal on how to apply the results of the financial year. Dividends.- 30,605 thousand euros Reserves.- 1,325 thousand euros. Results of the voting (votes): In favour.- 73,066,423 Against.- 7,711,154 Abstentions.- 720
SECOND. Approval of management by Board of Directors in 2007. Results of the voting (votes): In favour.- 72,820,181 Against.- 7,711,154 Abstentions.- 246,962
THIRD. Modifications to Articles 20 and 21 of the Company By-Laws to modify the length of time that a director may hold office, which changes to six years, and suppression of the age limit for directors to hold office, and consequently draw up the new wording of both articles. Results of the voting (votes): In favour.- 72,444,158 Against.- 8,533,419 Abstentions.- 720
FOURTH. To modify Article 21 of the Company By-Laws, changing the maximum number of chief executive officers that the Board can appoint to two and also changing the maximum number of executive or delegate committees that the Board can appoint to one, and consequently draw up the new wording of the article. Results of the voting (votes): 84 In favour.- 73,066,423 Against.- 7,711,154 Abstentions.- 720
FIFTH. To stipulate the number of members on the Board of Directors within the limits stated in article 20 of the Company By-Laws and consequent ratification, release or appointment of Board members. Within this point on the Agenda the following was proposed: 1) To stipulate eleven as the number of members on the Board of Directors. 2) Ratification of the member CONSTRUCCIONES OBRAS INTEGRALES NORTEÑAS, S.L. Results of the voting (votes): In favour.- 72,244,878 Against.- 822,265 Abstentions.- 7,711,154 3) To appoint LIQUIDAMBAR INVERSIONES FINANCIERAS, S.L. Results of the voting (votes): In favour.- 73,067,143 Against.- 0 Abstentions.- 7,711,154 4) To approve continuity as Board member RESIDENCIAL VEGASOL, S.L., after having renounced the grouping of shares basis used in its day to exercise right of proportional representation. Results of the voting (votes): In favour.- 72,244,878 Against.- 822,265 Abstentions.- 7,711,154
SIXTH. Authorisation for the Board of Directors to acquire Company shares by the company or its subsidiaries in accordance with "Art. 75, Disposición Adicional Primera y concordantes" of "Texto Refundido de la Ley de Sociedades Anónimas" (Company Law", specifying mode of acquisition, maximum number of shares, maximum and minimum purchase prices and duration of the authorisation, thereby leaving without force the previous 9 Corporate Governance Report authorisation given at the last General Meeting on 3rd May 2007. Results of the voting (votes): In favour.- Unanimous
SEVENTH. Appointment or re-election of the Auditors in accordance with Art. 204 of "Texto Refundido de la Ley de Sociedades Anónimas" (Company Law). The result was the re-election of Pricewaterhouse Coopers Auditores, S.L. for the 2008 financial year to audit the accounts of both the individual Company and the companies that make up the group. Results of the voting (votes): In favour.- 73,067,143 Against.- 7,711,154 Abstentions.- 0 EIGHTH.Delegation of powers to formalise or execute the agreements reached, to carry out the mandatory deposit of the annual Accounts, the Auditor's reports and to inform and notify the competent bodies, indistinctly on the Company Chairman, the Secretary of the Board of Directors and its Vice-secretary. Results of the voting (votes): In favour.- Unanimous
3. Costs Arising from the Last Shareholders Meetings 85 The announcement of the Shareholders' Meeting was published in the "Boletín Oficial del Registro Mercantil" (Company Register Official Bulletin) and in the Asturian newspapers: "La Nueva España", "La Voz de Asturias" and "El Comercio", as well as the national financial daily newspaper "Expansión".
The expenditure on publication of the announcement came to the sum of 17,978.46 euros
Publication of the Annual Report, hiring of the conference room to hold the Meeting, audiovisual means and the necessary services to hold the meeting as well as the attentions bestowed on the Shareholders who attended produced a cost of 55,229.38 euros.
4. Information means for the shareholder
The company has a shareholder assistance service which can be contacted at: Address: Parque Científico Tecnológico C/ Ada Byron, 90 33203 Gijón Telephone: (+34) 900 714 342 E-mail: [email protected]
There is also a web page (www.durofelguera.com) which contains information on the company, its rules and events notified to the Stock Exchange Commission
7. Audit The auditors from Pricewaterhouse Coopers have received the following fees in 2009:
For auditing Duro Felguera, S.A and Duro Felguera (Consolidated) accounts: 375,000 euros.
In addition, they have carried out other specific non-audit tasks receiving a sum total of 315,000 euros. Companies other than the main auditor received 3,000 euros for other auditing works. 9 9 8. Relevant Events In 2007, 2008 and 2009 the following relevant events were conveyed to the National Stock Exchange Commission:
DATE REGISTRY Nº TYPE OF EVENT
25/11/2009 ------Information on Dividends 03/11/2009 29948 Other relevant events 86 28/10/2009 115474 Intermediate financial information 30/09/2009 114313 Members of the Board of Directors 07/08/2009 ----- Information on Dividends 04/08/2009 112297 Members of the Board of Directors 31/07/2009 112118 Intermediate financial information 30/07/2009 29383 Information on results. - Strategies, Forecasts and presentations 04/06/2009 109351 Agreements by the Board of Directors 04/06/2009 28974 Other relevant events 25/05/2009 28909 Information on Dividends 07/05/2009 108100 Announcement and agreements of the shareholders meetings 29/04/2009 107578 Intermediate financial information 25/03/2009 106131 Announcement and agreements of the shareholders meetings 27/02/2009 28254 Information on Dividends 26/02/2009 104509 Corporate Governance Report 26/02/2009 104496 Intermediate financial information 26/02/2009 28218 Information on results. - Strategies, Forecasts and presentations 28/11/2008 100826 Presentation by the company 28/11/2008 27745 Correction of relevant events communication 27/11/2008 27734 Announcement of dividend and voucher payments 30/10/2008 27516 Presentation by the company 30/10/2008 99476 Results preview of issuing companies 9 Corporate Governance Report 15/09/2008 27235 Announcement of dividend and voucher payments 31/07/2008 96389 Regulation of the Board of Directors 31/07/2008 96357 Results preview of issuing companies 30/07/2008 96318 Presentation by the company 23/06/2008 94913 Increases or decreases in treasury stock 03/06/2008 26392 Announcement of dividend and voucher payments 12/05/2008 93104 Agreements by the Board of Directors 09/05/2008 93062 Agreements of shareholders meetings 05/05/2008 92724 Changes to the Board of Directors 05/05/2008 92713 Results preview of issuing companies 31/01/2008 88785 Agreements by the Board of Directors 27/02/2008 25671 Announcement of dividend and voucher payments 28/02/2008 89929 Results preview of issuing companies 12/03/2008 905754 Agreements by the Board of Directors DATE REGISTRY Nº TYPE OF EVENT
26/03/2008 91021 Announcements and agreements of shareholders meetings 31/03/2008 25988 Presentation by the company 04/04/2008 91518 Corporate Governance Report 87 16/04/2008 92003 Other relevant events 28/11/2007 24863 Announcement of dividend and voucher payments 07/11/2007 24607 Presentation by the company 05/11/2007 85522 Other relevant events: appointment of General Manager Assistant to Chairman 05/11/2007 85520 Results preview of issuing companies 04/11/2007 24328 Other relevant events: renewal of Audit Committee 10/09/2007 24184 Other relevant events: contracts July and August 2007 30/07/2007 82612 Results preview of issuing companies 05/06/2007 23636 Announcement of dividend and voucher payments 03/05/2007 79922 Announcements and agreements of shareholders meetings 25/04/2007 79501 Results preview of issuing companies 17/04/2007 79213 Share acquisitions or transmissions 29/03/2007 78623 Corporate Governance Report 2006 28/03/2007 78585 Announcements and agreements of shareholders meetings 08/03/2007 22913 Announcement of dividend and voucher payments 28/02/2007 77519 Results preview of issuing companies 01/02/2007 22628 Presentation by the company