MCC/Memoria 98/Ingl‣s
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MCC/Memoria 98/inglés 17/6/99 12:51 Página 1 Annual Report 1998 MONDRAGON CORPORACION COOPERATIVA 1 MCC/Memoria 98/inglés 17/6/99 12:51 Página 2 ondragón Corporación Cooperativa (MCC) is the fruit of the co-operative movement initiated in 1956, the year in which the first industrial co- operative was set up in Mondragón, Gipuzkoa, M Spain. Its business philosophy can be found in its Corporate Values: • Co-operation • Participation • Social Commitment •Includes Innovation banking, social welfare, insurance and MCC’s mission combines the basic objectives of a business organi- sation competing on international markets with the use of demo- cratic methods in its company organisation, job creation, advan- cement of its workers in human and professional terms and commitment to social development. In organisational terms, Mondragón Corporación Cooperativa is divided into three groups: Financial, Industrial and Distribution, together with the Research, Training and Education areas. Financial Group: leasing Industrial Group: Consists of seven divisions engaged in indus- trial production. Distribution Group: Combines retailing with agricultural-food acti- vities. CENTRO CORPORATIVO de MCC Pº José Mª Arizmendiarrieta, nº 5 20500 MONDRAGON - Guipúzcoa MCC/Memoria 98/inglés 17/6/99 12:51 Página 1 1 MCC/Memoria 98/inglés 17/6/99 12:51 Página 2 MCC/Memoria 98/inglés 17/6/99 12:51 Página 3 Sumary Highlights 4 Message from the President 5 Financial Group 9 •Caja Laboral 11 •Lagun-Aro 13 Industrial Group 15 •Automotive 18 •Components 19 •Construction 20 •Industrial Equipment 21 •Household Goods 22 •Engineering and Capital Goods 23 •Machine Tools 24 Distribution 25 •Eroski 27 •Erkop 29 Research, Training and Education 31 •Research Centres 32 •Training and Education Centres 34 Financial Statements and Trading Account 37 Organisational Structure 42 Social and Management Bodies 42 List of MCC Companies 45 3 MCC/Memoria 98/inglés 17/6/99 12:51 Página 4 Highlights • In millions of euros 1996 1997 1998 Total Sales 3,786 4,368 5,348 International Sales 1,080 1,255 1,434 Assets Under Administration* 4,402 5,024 5,708 Equity 2,000 2,369 2,843 Investment 271 378 425 Results 216 314 414 * Caja Laboral Workforce 31,963 1996 34,397 1997 42,129 1998 4 MCC/Memoria 98/inglés 17/6/99 12:51 Página 5 he general economic situation, characterised by a significant rate of growth, a reactivation in consumer spending, a high investment Tlevel, contained inflation and falling interest rates, provided the right framework for the achievements made by Mon- dragón Corporación Cooperativa which, in general, exceeded the targets set for the year. A favourable economic climate certainly helps, but it has to be managed. In this regard, an organisation based on peo- ple enables significant improvements to be made in terms of knowledge, which is the basis for business development in the world in which we live. Our results are the fruit of the commitment of all the people who form part of the Corpo- ration, whose efforts must be acknowledged as the reason behind the achievements made. The MCC Management Model, based on the co-operative principles behind this project, continues to be implemented and developed, with significant achievements made during the year. • Significant improvement in the number of applications of the model, with 67 companies applying the EFQM self-evaluation, as well as in the scores achieved, with two co-operatives having formally joined the 400 club. • General measurement of the satisfaction of the work- force, essential for finding out what members think and be able to establish plans for improvement. 5 MCC/Memoria 98/inglés 17/6/99 12:51 Página 6 • Widespread use of instruments to measure customer satisfaction, in the awareness that our future is inevitably linked to them. • Advances in the development of internal communica- tion, with increasingly more widespread specific plans. Qualitative developments have made possible significant increases in the activities of the three groups: Financial, Industrial and Distribution, with improvements that have enabled an increase in market share. Activity on the international stage, an aim pursued with deter- mination in the different plans, has enabled further advances to be made towards the 50% target established for the year 2000. More production plants have been set up abroad and bit by bit our culture is beginning to accept that to oper- ate in many markets it is necessary to have productions plants in situ. As a result of the excellent performance of other variables, there has been a significant increase in profitability, thereby establishing the bases for future development and enabling a firm commitment to be made to investment, as the best indi- cator of our undertaking to reinvest profits in order to gener- ate wealth. Results for the year totalled 414 million euros, which is 32% higher than those obtained in 1997. The most outstanding achievement of the year has been without doubt the creation of 7,732 new jobs. This has 6 MCC/Memoria 98/inglés 17/6/99 12:51 Página 7 helped to ease one of the biggest problems our society suf- fers from. For us, employment is a basic objective and we are naturally bound to strive to create more jobs. 1998 has therefore been a positive year, in which we have tried to offer an open image, of collaboration with others. This has resulted in the signing of new agreements, based on the conviction that our commitment to the values that inspire us will better reach fruition through solidarity. Antonio Cancelo President of the General Council 7 MCC/Memoria 98/inglés 17/6/99 12:51 Página 8 MCC/Memoria 98/inglés 17/6/99 12:51 Página 9 Financial Group 9 MCC/Memoria 98/inglés 17/6/99 12:51 Página 10 FINANCIAL GROUP n the financial area was offset by the increased vol- Worker Participation. In 1998 was charac- ume of business recorded in 1998 this Group’s workforce I terised by the conver- 1998 due to the improvement in increased by 45 people, mainly gence of interest rates, both the economy. In turn, the excel- cooperative members, to account long- and short-term, in the coun- lent performance of the financial for a total of 1,858 people at tries that have adopted the euro markets helped boost results, 31.12.98. as the single currency. This con- which for this Group, in overall The training courses offered dur- vergence has taken place at terms, increased by 26% com- ing the year were aimed at lower levels than expected, pared to 1997. improving the technical abilities which has led to revaluations of Internationalisation. of the workforce (tax matters, the the fixed and variable income Caja Laboral is the only company in euro, sales methods, etc.). Pro- portfolios, and also a tightening motion courses were also of the financial intermediation this Group that operates on the international stage, with an offered as was aid for comple- margins. mentary courses. extensive network of foreign cor- In this context, the compliance of respondent banks. It should also be highlighted that MCC’s Financial Group with the over the year, 7 million euros The most outstanding aspects in Basic Corporate Objectives has from Caja Laboral’s Education 1997 were the 19% increase in been as follows: and Promotion Fund were ear- the volume of commercial opera- Customer Satisfaction. Dur- marked for co-operative training tions abroad, the signing of a ing the year work was intensi- and promotion, and research as collaboration agreement with fied on the direct measurement well as cultural and health mat- CESCE to market a commercial of customer satisfaction, by ters. risk cover policy for exporters, means of self-evaluations, certifi- as well as the successful adapta- Among the aspects relating to cations and improvement pro- tion to the euro, with services Lagun Aro, the positive perfor- grammes. Caja Laboral’s Elec- now being offered in the new mance of the Employment Aid tronic Banking service and currency. benefit should be highlighted, Seguros Lagun-Aro’s car Insur- with its cost being half that ance business obtained ISO Development. All the indica- recorded in 1997. The efforts 9000 certification from AENOR. tors of the levels of activity of this made to clear up problems with In order to improve customer ser- Group recorded increases in early retirement and collaborate vice, 13 new bank branches 1998. Total customer assets in the management of health and 5 new insurance offices under administration and bank care for the Spanish Social Secu- were opened, the number of investment recorded two-digit rity system also stand out. A branches open all day was increases, while the high level of Community Service for the Pre- increased and there was promo- profitability obtained has rein- vention of Occupational haz- ■ tion of the alternative Telephone forced the soundness of the net ards was also set up. and Electronic Banking services. worth of the group, taking Caja The Electronic Banking service Laboral’s equity to 669 million Juan María Otaegui was given a further boost with euros and Lagun-Aro’s funds to MCC Vice-president Chief Executive - Financial Group the start-up of Caja Laboral Net, 1,721 million euros. an interactive banking service The opening of new bank via the Internet. branches continued, mainly in Profitability. The tightening of areas with greater expectations intermediation margins as a for business development like La result of the fall in interest rates Rioja and Castilla-León. 10 MCC/Memoria 98/inglés 17/6/99 12:51 Página 11 FINANCIAL GROUP Caja laboral Sdad. Coop. de Crédito Caja Laboral, Head Offices, Mondragón aja Laboral is a credit is an increase of 20.3% com- tal adequacy ratio was 21.3%, institution which, set up pared to 1997.