Economic Driver of Spain Geostrategic Location 2 and World Class Infrastructure

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Economic Driver of Spain Geostrategic Location 2 and World Class Infrastructure INVEST IN MADRID October 2017 The Region of Madrid A BUSINESS-FRIENDLY ECONOMY 2 5 REASONS TO INVEST AND OPERATE IN MADRID 1 ECONOMIC DRIVER OF SPAIN GEOSTRATEGIC LOCATION 2 AND WORLD CLASS INFRASTRUCTURE 3 EXCEPTIONAL HUMAN CAPITAL 4 LEADERS IN INNOVATION 5 UNIQUE QUALITY OF LIFE 3 1 ECONOMIC DRIVER OF SPAIN 4 1 Economic driver of Spain Key figures SIZE 8,030 km2 (1.6% of Spain) POPULATION (2016) 6.47 million (13.9% of Spain) GDP (2016) €210,813 million (18.9% of Spain) GDP PER CAPITA (2016) • €32,723 - 1st region in Spain • 36.5% higher than the national average GDP BY SECTOR 2016 5 1 Economic driver of Spain Madrid, an economic powerhouse, is the main financial hub and decision-making centre in Spain. MADRID LEADS SPANISH GROWTH Source: INE 6 1 Economic driver of Spain MAIN FINANCIAL HUB OF SPAIN Madrid is home to the operational head offices of the main Spanish banks (Santander, BBVA, Popular, Bankinter, Bankia) and foreign banks, as well as the head offices of the leading investment funds in Spain. All the main national and international financial institutions in Spain are located in Madrid: Madrid Stock Exchange, IBEX, Latibex, The National Securities Market Commission, Spain Financial Center, Inter-American Development Bank, European Investment Bank, IOSCO, etc. Financial centre operating on a global level: Santander and BBVA are among the top banks in the Eurozone in terms of market capitalisation (1st and 3rd respectively). 6th European market in terms of market capitalisation (after the London Stock Exchange, Euronext, Deutsche Börse, SIX Swiss Exchange and NASDAQ OMX Nordic Exchange). 7 1 Economic driver of Spain LEGISLATIVE & REGULATORY DECISION-MAKING CENTRE The vast majority of Spain’s governmental and regulatory institutions and organisations are based in Madrid: Office of the Head of State, Central Government, Congress of Deputies, Senate, statewide ministries and public companies, Constitutional Court, Supreme Court, National Markets and Competition Commission, etc. BUSINESS DECISION-MAKING CENTRE There are over 561,000 businesses registered in Madrid, accounting for almost 16% of all businesses in Spain in 2016. There are 4,045 foreign businesses in Madrid, accounting for 39.1% of all foreign businesses in Spain. The Spanish head offices of all the large law firms, engineering companies, international consultancy firms and estate agencies are based in Madrid: PricewaterhouseCoopers, Deloitte, Accenture, KPMG, EY, Garrigues, Cuatrecasas, JLL, Aguirre Newman, etc. 8 1 Economic driver of Spain BUSINESS DECISION-MAKING CENTRE 3rd city in the European Union (after London and Paris) with the most operational head offices of multinational companies, according to the 2015 FORTUNE 500 list (Santander, Telefónica, Repsol, ACS and Mapfre). Madrid is home to the head offices of the majority of the leading Spanish companies: almost 3 out of every 4 Spanish companies on the Forbes 2000 Global companies list are based in Madrid (19 of 26). 73% of the largest companies in Spain are in Madrid Source: Forbes 2016 9 1 Economic driver of Spain Leader in securing Foreign Direct Investment (FDI). For investments in Spain, Madrid is the 1st choice. 6 OF EVERY 10 € INVESTED IN SPAIN ARRIVE IN MADRID 10 1 Economic driver of Spain Solid base in industry and exports. Excellent services provision. INDUSTRY WITH HIGH ADDED VALUE The Region of Madrid is the second region in Spain in terms of industrial production and the third in terms of exports volume. Production with a high technological content: The Region of Madrid is the centre of the aerospace sector in Spain: EADS-AIRBUS, BOEING, BOMBARDIER and others. 30% of the national ICT market and 45% of the head offices of all ICT companies in Spain. Science and biopharmaceutical companies: the Region of Madrid is home to 35% of all scientific production in Spain. It also has a number of powerful clusters in the automotive sector, the publishing industry and in renewable energy, among others. Madrid is the national leader in engineering: 39% of companies 75% of revenue 47% of total employment in this sector. 11 1 Economic driver of Spain THE LARGEST SERVICES PLATFORM IN SPAIN Nearly 80% of all people living in Madrid work in the service sector. 7 groups with head offices in Madrid are among the 50 top international building companies (Top 225 International Contractors): FCC, ACS, Sacyr, Técnicas Reunidas, Ferrovial, Isolux and OHL. The Region of Madrid is an international benchmark for the granting of administrative concessions and Public-Private Partnership (PPP) funding projects. SPAIN LEADS THE GLOBAL TOURISM SECTOR In 2017, Spain has been said to have again the most competitive tourism sector in the world, according to the World Economic Forum. 3rd global market in terms of revenue from tourism (just after the USA and China). 3rd country in the world in terms of number of tourists (after France and the USA), with 75,6 million visitors in 2016. 83 million tourists are expected for 2017. 12 1 Economic driver of Spain MADRID: AN INTERNATIONAL TOURISM CENTRE The Region of Madrid had 11.45 million visitors in 2016 (+2.6% yoy). Madrid is the world's 7th most popular conference destination, with 144 meetings in 2016, according to the prestigious rankings of the International Congress and Convention Association (ICCA). 13 2 GEOSTRATEGIC LOCATION AND INFRASTRUCTURE 14 2 Geostrategic location and infrastructure 2 Geostrategic location and infrastructure Prime location between Europe, Africa and Latin America MADRID: LEADING AIRPORT IN THE SOUTH OF EUROPE 1st Spanish airport and 5th in Europe for passenger and cargo traffic. Named best airport in the south of Europe and the 7th in the world. The T4 terminal is the 3rd best terminal in the world (behind T5 at Heathrow and T3 at Singapore).(1) Capacity for 70 million passengers a year. Large margin for additional traffic with no risk of congestion. Exceptional intermodal connectivity: the airport is 12 km from the city centre (20 mins). The Metro and Cercanías trains and the bus network connect the airport to the city of Madrid and the surrounding metropolitan area. Source: (1) AirHelp 2017 & Skytrax 2015 2 Geostrategic location and infrastructure MADRID: LEADING AIRPORT IN THE SOUTH OF EUROPE Barajas is the leading European airport for flights to Latin America: 1/5 of all connections between Europe and Latin America. 5 direct destinations from Madrid to China. 209 DIRECT FLIGHT DESTINATIONS FROM MADRID 132 (Europe) 8(Asia) (US & Canada) Beijing 13 Shanghai 9(Middle East) Hong Kong Chengdu Hangzhou 16 (Africa) 31 (Latam) 2 Geostrategic location and infrastructure MADRID: NERVE CENTRE OF THE SPANISH MARKET Madrid is the origin and centre of the national transport network. Madrid is a maximum of 6 hours by road from all other major cities and towns in Spain. Two high-capacity roads cross the border with France and there are high- speed rail connections with the rest of Europe. NATIONAL RAIL NETWORK Madrid is the main hub of the More high-speed lines now available 2nd most extensive high-speed New high-speed lines in 2015 rail system in the world (covering 3,000 km), second only to China. An extensive regional network of motorways connects the towns in the Region of Madrid to the national network, forming the backbone of the territory and ensuring access to the rest of the peninsula from anywhere in the Region. 2 Geostrategic location and infrastructure MADRID, PENINSULAR LOGISTICS CENTRE Logistics in Madrid cover an area of 38 million m2, the largest area dedicated to this sector in Spain. 75% of logistics companies operating in Spain (both Spanish and international) have their head offices in Madrid. The Dry Port in Coslada (bonded warehouse) is 10 minutes from the airport. It connects Madrid in just a few hours with the country's leading ports (Algeciras, Valencia, Barcelona, Bilbao) and is a very cost-effective system. The main logistics corridors in the Region are located around the A-2 and the A-4 motorways. The main attraction of these areas is their close proximity to Madrid and the availability of sites that are suitable for almost any type of activity. EXCEPTIONAL HUMAN CAPITAL 20 3 Exceptional human capital An open, diverse and talented society HIGHLY QUALIFIED PEOPLE Workforce of over 3.33 million people. 1st region in Spain in terms of activity (62.7% compared to 58.9% average across Spain). 48.5% of the workforce has a university degree (32.6% in the EU-28, according to Eurostat in 2016). CULTURAL DIVERSITY 26% of all people living in the Region of Madrid come from other areas of Spain. 17.8% are foreign-born, representing over 180 different nationalities. 3 Exceptional human capital AVAILABILITY OF TALENT Madrid has 15 universities. 3 of the best business schools in the world are based in Madrid: IE Business SchooI, IESE and ESADE. Availability of speakers of European languages 3 Exceptional human capital COMPETITIVE AND COST-EFFECTIVE WORKFORCE The moderation of wages is making it possible for Spain to maintain its competitivity, while costs continue to increase significantly throughout the rest of the European Union. 3 Exceptional human capital LEADER FOR SHARED SERVICE CENTRES Madrid has been particularly successful in recent years in attracting and growing Shared Service Centres: 24 3 Exceptional human capital LEADER FOR CUSTOMER SUPPORT AND BPO CENTRES Also regarding captive Customer Support Centres and BPO Centres with a wide geographical and process scope. 25 LEADERS IN INNOVATION 26 4 Leaders in innovation Madrid: national centre of innovation DYNAMIC ENTREPRENEURIAL ECOSYSTEM Madrid is home to 19.7% of all companies established in Spain in 2016 and 30.1% of the total capital subscribed by these new companies. More businesses are established each year in the city of Madrid than in Barcelona, Valencia, Seville and Zaragoza put together.
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