2016 Annual Report
1 FINANCIAL RESULTS
CONTENTS
00 01 02 03
Chairman’s statement 6 FINANCIAL RESULTS MAIN BUSINESS LINES HOLDINGS OF CORPORACIÓN Board of Directors 10 Key figures 24 Wealth Management 46 FINANCIERA ALBA Nomination and Corporate Investment portfolio 74 Banca March Group 26 Retail and Private banking 48 Governance Committee 10 Affiliated companies 75 Remuneration Committee 10 Consolidated balance sheet 31 Corporate Banking 57 LISTED COMPANIES 75 Audit Committee 11 ACS 75 Customer funds 34 Subsidiaries 64 Acerinox 76 Global Risk and Technology Ebro Foods 77 Change Committee 11 Customer loans 36 March A.M. 64 Bolsas y Mercados Españoles 78 Credit Risk Committee 11 Viscofan 79 Capital markets 38 March JLT 66 Indra 80 The economy in 2016 12 Euskaltel 81 The outlook for 2017 20 Capital instruments 39 March Vida 68 Parques Reunidos 82 Clínica Baviera 83 Consolidated income statement 40 Consulnor 70 NON-LISTED COMPANIES 84 Mecalux 84 Banco Inversis 71 Panasa 84 Flex 85 Siresa - EnCampus 85 In-Store Media 86 Ros Roca Environment 86 Real estate activity 87
2 3 INFORME ECONÓMICO Y FINANCIERO 00 INTRODUCTION
Chairman’s statement 6 Board of Directors 10 Nomination and Corporate Governance Committee 10 Remuneration Committee 10 Audit Committee 11 Global Risk and Technology Change Committee 11 Credit Risk Committee 11 The economy in 2016 12 The outlook for 2017 20
4 5 CHAIRMAN’S STATEMENT
CHAIRMAN’S In 2016, Banca March celebrated its Banca March’s five-year goal is to competitors, business models that have 90th anniversary. Over these nine become Spain’s leading provider of transformed the global economy and STATEMENT decades of effort and dedication, our private banking and corporate advisory new technologies, drive us to constantly unwavering business philosophy has services, safeguarding our significant better ourselves. been underpinned by four key tenets: market share in the Balearic Islands. This landscape has led Banca March shareholder commitment, exclusive We are backed by a robust balance to launch a transformation process products, outstanding service quality sheet and our financial ratios – capital and excellent professionals. Our involving all key areas, including equity, liquidity, NPL and NPL coverage management model seeks to ensure technology, information systems, – position us as a European sector shared growth for all of our stakeholders, products and human resources. Coupled leader. Beyond the implications in terms including our shareholders, clients, with our size, experience, expertise and of rankings, this affords our clients employees and society as a whole. financial strength, this process will allow the utmost confidence in our range of This model has proved to be a great us to fully harness every opportunity financial products and services. success, thanks to our long-term we encounter. Our goal is to continue approach and our enduring values: Banca March recently received a further to offer top-level advice and expertise for our clients whilst upholding our commitment, ambition, integrity, effort rating upgrade. and exacting standards. These roots principles of responsible commitment ensure we have the determination we We are fully equipped to tackle – with and profitable growth. At Banca March, need to face the substantial challenges the utmost security – the rapidly- we are alert and receptive to the changes ahead, as we strive to achieve our most changing landscape in which we underway in the market; we are able not ambitious goals. operate. New challenges, such as new only to adapt, but also to maintain our
6 7 CHAIRMAN’S STATEMENT
unique identity and we look forward to unemployment rate stood at 18.6% of another 90 years of success. the active population in 2016; still too high, but lower than the figures for We are operating against an economic 2015 (20.9%) and 2014 (23.7%). The backdrop that shows continued signs of Spanish Active Population Survey (EPA) recovery. For the second year running, reveals that 413,900 people found work the Spanish economy was the top in 2016. This gradual recovery of the performer in the eurozone, beating labour market is partially overshadowed international organisations’ forecasts by the excessive use of temporary with 3.2% year-on-year growth, its contracts and the reduction in the active strongest figure since the beginning population in recent years. of the financial crisis in 2007. GDP has trended steadily upwards since 2014, Another persistent weak spot is Spain’s confirming that the Spanish economy public sector debt. Despite the slight is headed in the right direction. This improvement on last year’s figure, buoyant economic performance was public sector debt stood at 99.4% of driven by the reforms undertaken in GDP in 2016. This undeniably high the last political term and the end of ratio somewhat undermines the well- management. Our commitment to Specifically, Banca March has the lowest previous political uncertainty, as well established recovery of the country’s profitable growth, underpinned by our NPL ratio in the Spanish banking sector as contained energy costs, low interest economy. robust balance sheet, our outstanding at 3.99% and one of the highest capital rates and an upturn in the labour market service levels and the flagship co- equity ratios in Europe at 20.85%. As for Banca March, our 2016 results spurred by record tourism figures. investment initiatives that set us apart reflect our clear commitment to None of these achievements would have from the competition, provides peace This positive trend is now entrenched, as specialising in private banking and been possible without the commitment of mind to investors and savers alike. confirmed by property sector data, with corporate advisory. The sustained of our shareholders, the trust of our a substantial increase in the number growth in off-balance sheet assets under This is evidenced by the fact that assets clients and the Banca March team. of transactions taking place and rising management (7.6%) and the increased under management in SICAVS grew to I am deeply grateful to everyone who has house prices, and by the foreign sector, weighting of income from services 3,230 million euros, positioning the worked hard to make Banca March the which closed 2016 with record exports within the ordinary margin from banking Group’s asset manager, March Asset bank it is today: Spain’s only fully family- of over 250 billion euros. This gave rise activity (63.4%) both demonstrate the Management, as the third largest owned bank and a private banking and to a drop in the trade deficit of 22.4%, effective implementation of the bank’s player in the Spanish SICAV market by corporate advisory leader. With hard which benefited clearly from low oil specialist, advisory-based business AuM. At the end of 2016, assets under work and dedication, we will continue to prices. model. management by March A.M. stood at strengthen our unique business model 6,385 million euros. Despite this positive performance, The significant increase in Private and secure shared growth for clients, unemployment continues to be Banking clients (11.3%) confirms that our The aforementioned robust balance employees and shareholders alike. one of the Spanish economy’s key business model – which is unparalleled sheet is supported by the bank’s excellent financial ratios. For years weaknesses, although the sustained in the Spanish financial sector – is a Juan March de la Lastra drop in unemployment figures do resounding success. Increasing numbers now, we have boasted unquestionably Chairman allow for cautious optimism. Spain’s of savers are placing their trust in our strong NPL and capital equity ratios.
8 9 STRUCTURE OF COUNCILS AND COMMITTEES
BOARD OF NOMINATION AUDIT GLOBAL RISK DIRECTORS AND CORPORATE COMMITTEE AND TECHNOLOGICAL GOVERNANCE CHANGE COMMITTEE
Chairman COMMITTEE Chairman Chairman Mr Juan March de la Lastra (executive) Mr Nicolás Villén Jiménez Mr Moisés Israel Abecasis
Executive Vice Chair Members Members Chairman Ms Rita Rodríguez Arrojo (executive) Mr Moisés Israel Abecasis Mr Vicente Moreno García-Mansilla Mr Albert Esteve Cruella Mr Vicente Moreno García-Mansilla Mr Ignacio Muñoz Pidal Chief Executive Officer Mr Nicolás Villén Jiménez Members Mr José Luis Acea Rodríguez (executive) Secretary Mr Moisés Israel Abecasis Mr José Ignacio Benjumea Alarcón Secretary Mr Vicente Moreno García-Mansilla Directors Mr José Ignacio Benjumea Alarcón Mr Ignacio Muñoz Pida Mr Juan March Delgado (non-executive) Mr Carlos March Delgado (non-executive) Secretary Mr Juan March Juan (non-executive) Mr José Ignacio Benjumea Alarcón Mr Javier Vilardell March (non-executive) CREDIT RISK Chairman Mr Juan Carlos Villalonga March (non-executive) Mr Santos Martínez-Conde Gutiérrez-Barquín Mr Jorge Bergareche Busquet (non-executive) COMMITTEE Mr Albert Esteve Cruella (independent) Members Mr Moisés Israel Abecasis (independent) Mr José Luis Acea Rodríguez Mr Santos Martínez-Conde Gutiérrez-Barquín (non-executive) REMUNERATION Mr Jorge Bergareche Busquet Mr Vicente Moreno García-Mansilla (independent) Mr Ignacio Muñoz Pidal Mr Ignacio Muñoz Pidal (independent) COMMITTEE Mr Nicolás Villén Jiménez (independent) Secretary Mr José Ignacio Benjumea Alarcón Company Secretary Chairman Mr José Ignacio Benjumea Alarcón (executive) Mr Ignacio Muñoz Pidal
Members Mr Albert Esteve Cruella Mr Moisés Israel Abecasis Mr Vicente Moreno García-Mansilla
Secretary Mr José Ignacio Benjumea Alarcón
10 11 THE ECONOMY IN 2016
INCREASE IN GDP MAIN ECONOMIES
In 2016, global economic growth slowed 5.0 2016: by one tenth of a percentage point year 4.5 GLOBAL GROWTH on year to 3.1%, the weakest growth 4.0 rate since the great recession of 2009. 3.5 SET TO BE STABLE, That said, following the anaemic early 3.0 quarters, the global growth rate did 2.5 BUT MODEST stabilise over the course of 2016 and 2.0 actually picked up the pace in the final 1.5 straight of the year, dispelling fears of 1.0 another recession. The total economic 0.5 0.0 growth chalked up in 2016 was World Developed Emerging US Eurozone Spain therefore modest, but the overall trend continues to be towards improvement. 2015 2016 2017 p This performance was largely due to the unexpected drop in activity in the US in the first half of the year. It was by just 0.9%. However, it was the US from recession: both Brazil and also impacted by the more sluggish economy that suffered the most severe Russia saw GDP shrink for the second performance of some of the emerging setback, with growth dropping from year running, by -3.5% and -0.06% markets, especially the economies 2.6% in 2015 to 1.6% in 2016. respectively. that were hit hardest by the drop in commodity prices in the first quarter of China’s soft landing continued; growth Inflation varied by region, but in general the year. remained in the region of 6.5% to 7%. terms remained low thanks to contained The Indian economy, however, saw its energy costs. Fears of deflation in The developed economies saw their growth rate slow to 6.6% from 7.6% in advanced economies dissipated over the year-on-year growth rate fall to 1.6%, 2015. The emerging economies with the year, as the uptick in oil prices and the versus 2.1% in 2015. Eurozone growth most exposure to commodity prices and economic recovery impacted consumer remained at a robust pace of 1.7%, but the largest macroeconomic imbalances prices. The CPI stood at 2.1% in the US was three tenths of a point lower than registered the poorest performances, and 1.1% in the eurozone, substantially in 2015. The Japanese economy grew emerging more slowly than expected higher than the levels of 0.7% and 0.2%
12 13 THE ECONOMY IN 2016
INFLATION
10.0 the second time in the last ten years. was elected – Theresa May – to head This official rate hike took place in up the UK’s departure from the EU. The 8.0 December, as weak first-half growth and markets plummeted in response initially a lack of inflationary pressure led the but gradually stabilised in subsequent 6.0 Fed to err on the side of caution. The sessions thanks to interventions by the token 25 bp hike took the target range main central banks and the upturn in 4.0 to 0.5%-0.75%. global economic activity.
In the major emerging economies, Towards the end of the year, all eyes 2.0 stabilising currencies in the second were on the US presidential elections half, coupled with confirmation that and the victory of Republican candidate 0.0 inflationary pressures were easing, Donald Trump. The Republican Party also gave rise to the implementation kept control of both the House and the -2.0 07 08 09 10 11 12 13 14 15 16 of monetary stimulus measures. The Senate, which will allow the President most intense measures were taken to push through the range of measures BRIC Ination (YoY) US and Eurozone ination (CPI YoY) Source: IMF and in-house data in the economies which are currently outlined in his electoral programme. in recession. Russia slashed rates by President Trump plans to cut the 100bp to 10% and Brazilian rates were corporate tax rate from 35% to 15% registered respectively in December intentions to provide further long-term cut by 50bp to 13.75%. The main Asian and reduce personal income tax, roll 2015. In the BRIC countries – Brazil, liquidity through TLTRO-II to incentivise economies also applied loose monetary out a new infrastructure investment Russia, India and China – inflation bank lending at rates that can be as low policies. In India, official rates were plan, make changes to foreign policy eased off over the course of the as the deposit facility rate, currently at lowered by 25bp to 5.75%, and in China, (including tougher restrictions on the 12-month lending rate was 4.35%. year, as stabilising currencies curbed -0.4%, which means that banks actually immigration and increased import tariffs The People’s Bank of China continued to inflationary pressure in Russia and Brazil get paid for increasing lending. The Bank for Mexico, China and Canada), and cut allow the Yuan to depreciate against the and consumer prices were contained in of England also cut its Bank Rate by regulation in the financial and energy US dollar; the currency lost 6.95% over China and India. The average combined 25bp to a record low of 0.25%, its first sectors. the year to reach 6.945 USD/CNY. CPI of these economies stood at 3.9% rate cut in seven years, and resumed its The highest-rated sovereign bonds were YoY, versus 4.96% in 2015. asset purchase programme. If there was one key macroeconomic buoyed mainly by low inflation and feature last year, it was the substantial Against this backdrop of gradually expansionary monetary policy. German The Bank of Japan took the most political uncertainty, in particular the improving growth and moderate bund prices rose further with 10-year aggressive stance. It slashed its deposit unexpected outcomes of the Brexit inflation levels, monetary policy remains yields down 40bp on the year to 0.2%, rate by 20bp to negative territory at referendum and the US presidential loose and the main central banks, with even dipping into negative territory for -0.1%. However, its boldest move in elections. the exception of the Fed, implemented terms of monetary policy came in the part of the year. US Treasury bonds further stimulus measures over the second half of the year, when it said In June, the polls got it wrong and remained stable, but 10-year yields rose course of the year. In Europe, the it would undertake bond purchases the British people voted to leave the slightly, especially towards the end of European Central Bank (ECB) cut the to keep 10-year bond yields at zero, European Union, with 52% of the votes the year, when they jumped 10bp to price of money to 0% and raised the thereby taking control of the long-end and a turnout of 72%. This outcome 2.4%. The performance of peripheral penalty rate on deposits parked in its of the yield curve. kicked off a complex political process sovereign credit spreads varied widely: accounts by slashing the interest rate for which there is still no clear roadmap, political uncertainty hampered Italian by 10bp to -0.4%. The ECB also stepped The exception to these more as this is the first time a member debt, driving yields on 10-year Italian up asset purchases to 80 billion euros expansionary monetary policies came country has ever chosen to leave the government bonds to 1.6%, whilst in a month and broadened the scope from the Fed. Improved activity and union. The British Prime Minister, David Spain, the formation of a government of these acquisitions to include non- falling unemployment allowed the US Cameron, subsequently stepped down and improved economic activity saw financial corporate bonds. It announced central bank to hike interest rates for and a new Conservative party leader 10-year government bond yields fall
14 15 THE ECONOMY IN 2016
to 1.4%. Spain’s overall sovereign bond The European markets lagged behind, economies, the pound was weak and Turkish currency, and the election of index gained 4.2% over the year. despite continued robust economic the dollar appreciated. In the emerging Donald Trump as US President and the growth and further ECB stimulus markets, we saw significant currency potential introduction of protectionist The performance of equity markets also measures. The Stoxx Europe 600 lost appreciation in the two countries that measures on US imports from Mexico varied by region. The US equity markets 1.2% and in Spain, the Ibex 35 fell for began to emerge from recession: Brazil drove down the peso. racked up the largest gains, underpinned the second year running, this time by and Russia. The Spanish economy continued to by the end of the drop in corporate 2%. Political uncertainty hampered the The euro closed the year down enjoy a cyclical upswing, reporting 3.2% earnings and the expectations generated performance of European equities and 3.2% against the dollar, with most growth again in 2016, the strongest by the new government, which is likely the asset class saw major outflows over of the fall taking place at the end of GDP growth rate since the economic to roll out broader fiscal stimulus plans the year. that would boost economic activity and the year following confirmation of crisis began. support US companies’ profits. It is worth In the commodity markets, the key the Fed rate hike. The euro-dollar cross closed 2016 at 1.05 EUR/USD. Contained energy costs, low interest noting that after five quarters of falling factor last year was the performance rates thanks to ECB stimulus measures corporate earnings, the third quarter of oil prices, which fell to 2003 lows The pound sterling plummeted on confirmation that the British people and the improvement in employment had voted to leave Europe and lost all buoyed domestic Spanish demand, 15.8% against the euro, closing at which allowed the economy to sustain YIELDS ON 3-MONTH 0.85 EUR/GBP. its significant growth rate. A record year for tourism and a drop in the trade deficit 10-YEAR SOVEREIGN BONDS INTEREST RATES The best-performing emerging provided added economic tailwinds. dec ’16 dec ‘15 dec ‘16 dec ‘15 currencies were the Russian rouble This uptick in economic activity led USA 2.4% 2.3% USA and the Brazilian real, which gained 17.9% and 20.3% against the euro, to job creation, though at a slower Germany 0.2% 0.6% (Libor 3 months) 1.05% 0.61% respectively. The Turkish lira and the rate towards the end of the year. The Spain 1.4% 1.8% Eurozona Mexican peso underperformed, both Spanish Active Population Survey (EPA) reported unemployment at year end Italy 1.6% 1.6% (Euribor 3 months) -0.33% 0.13% losing just over 14% against the euro. Political uncertainty hampered the 2016 of 18.6%, down 8.3pp since the
of 2016 marked a change of trend that before climbing to close up 55% at OIL PRICES (USD) was later confirmed in the final quarter 55.4 USD/barrel. This upturn in prices of the year, when earnings climbed came partly on the back of increased 160 by over 5%. Against this backdrop of demand, but was primarily thanks to 140 improving earnings, the S&P 500 gained the agreement in November between 9.5% in 2016. Emerging market equities OPEC members and other producers to 120 also notched up impressive gains. The cut production to stabilise prices. Gold 100 MSCI Emerging Markets Index gained prices also closed the year up, albeit 8.6% over the year, as Russia and Brazil more moderately, gaining 8.6% to reach 80 emerged from recession and fears $1.152 per ounce. 60 around a downturn in Chinese growth dissipated. Stock market performance In the currency markets, the outlook 40 for monetary policy and the political varied widely by region, with the 20 Latin American and Russian markets agenda determined the performance of outperforming their Asian counterparts. the key cross rates. In the developed 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Brent crude prices Source: Bloomberg and in-house data
16 17 THE ECONOMY IN 2016
early-2013 high. Employment rates were to doubts as to the sustainability of this of GDP at year-end 2016, only slightly up 2.3% last year, equivalent to 413,900 improvement in the deficit in a scenario under the 99.8% registered in 2015. people, according to EPA data. The of rising oil prices. As for tourism, labour market is gradually recovering, 75.6 million international tourists visited Inflation remained low and the average although some less positive trends Spain in 2016, an increase of 10.3% CPI for the period fell by 0.2% year do persist, such as the reduction in versus 2015. on year, showing negative growth for the active population and an excessive the second year running. However, proportion of temporary employment The main inbound tourism markets this stemmed from falling oil prices; contracts. for Spain were the UK, with a 12.4% as illustrated in the graph below, core increase in visitors, France, with an inflation remained stable at levels closer The property sector confirmed this increase of 7.1%, and Germany, with an to 1%. This downwards trend in the CPI positive trend. Residential demand was increase of 6.4%. Spending by these reversed at the end of the year as the boosted by rising employment figures visitors stood at 77.63 billion euros in impact of falling energy costs eased off, and foreign demand for investment 2016, a year-on-year increase of 9.0%. and the overall CPI was up by 1.6% in opportunities also showed signs of These figures underscore the strength year-on-year terms in December. improving. In the first three quarters of of the domestic tourism industry and its 2016, house sales rose by an average of substantial contribution to the economic 15% year on year. Average house prices growth rate. were up 4.6% year on year in the fourth quarter. Another imbalance in the Spanish economy that showed signs of In terms of the foreign sector, the improvement was the excessive level Spanish economy closed last year with of private sector debt, which was down record exports, which rose 1.7% year on to 1.7 times GDP at the end of Q2 2017, year to 254.3 billion euros, and a 0.4% versus 2.1 times GDP in 2010. The drop in imports. As a result, the trade performance of public sector accounts deficit fell by 22.4% to 18.75 billion was less encouraging; once again, the euros, the second-lowest deficit since reduction in the deficit failed to meet 1997. This enhanced performance was targets and public sector debt remains partly due, however, to the lower cost high. According to Bank of Spain data, of energy imports, which has given rise the public sector debt stood at 99.4%
QUARTERLY GDP GROWTH AND ECONOMIC CONFIDENCE EMPLOYMENT AND GDP GROWTH PRIVATE SECTOR DEBT - SPAIN INFLATION RATE - SPAIN
2.0 120 6.0 6 250% 6.0% 4.0 4 215% 5.0% 200% 1.0 2.0 2 169% 4.0% 157% 100 0.0 0 150% 131% 3.0% 0.0 -2.0 -2 102% 2.0% 100% 92% 1.0% -1.0 -4.0 -4 80 -6.0 -6 50% 0.0% 64% 84% 67% -2.0 70 -8.0 -8 -1.0% Mar ’05 Dec ‘06 Sep ‘08 Jun ’10 Mar ’12 Dec ‘13 Sep ‘15 0% Mar ’01 Dec ‘02 Sep ‘04 Jun ’06 Mar ’08 Dec ‘09 Sep ‘11 Jun ’13 Mar ’15 Dec ‘16 Mar ‘05 Mar ‘10 Jun ‘16 -2.0% Jan ‘05 Apr ‘06 Jul ‘07 Oct ‘08 Jan ‘10 Apr ‘11 Jul ‘12 Oct ‘13 Jan ‘15 Apr ‘16 Quarterly GDP growth Economic con dence GDP YoY Employment YoY Households Non-nancial Total (Active Population Survey, right axis) (% GDP) corporations (% GDP) (% GDP) CPI Core CPI
Source: Bloomberg and in-house data Source: Bloomberg and in-house data
18 19 THE OUTLOOK FOR 2017
Economic growth is set to pick up the exposure to commodities will drive flight from China. This year will bring THE OUTLOOK pace this year, buoyed by expectations growth, and the slowdown in China will greater growth, but also increased FOR 2017: of fiscal stimulus measures and public be gradual. uncertainty, so central banks will spending in the US and the economic avoid any drastic moves to tighten up GROWTH TO PICK recovery underway in Russia and Brazil. Inflation will rise on the back of monetary policy. The eurozone will continue to grow at increasing commodity prices and UP BUT ECONOMIC a similar rate to last year and global stronger economic growth, but will not inflation will trend upwards. pose a substantial risk. In the second POLICY WILL TAKE half of the year inflation will climb more The outlook for 2017 points to a slight gently as the impact of rising energy CENTRE STAGE upturn in global growth, which should costs tapers. There are also structural rally to a rate approaching 3.4%. issues that could curb the increase in This economic upturn will likely be consumer prices: population ageing, underpinned by ongoing favourable rapid technology progress and idle financial conditions that will encourage capacity in the major economies. investment in developed economies and reduce risk for emerging markets. Monetary policy will therefore be somewhat less expansionary. The main The cyclical upswing will be backed by central banks – including the ECB – will the US economy, which is set to grow pare back monetary stimulus measures, at an ever faster rate of 2.3%; the and some, mainly the Fed, will hike eurozone will also continue to grow, interest rates. Official rates will remain but at a slower pace. In Spain, following low in historical terms, and will continue the impressive growth achieved for to support the economic recovery. the last two years, the pace will ease off slightly to 2.5% in 2017, as rising This promising outlook also has its oil prices and increased fiscal austerity potential risks: a series of elections in hamper domestic demand. The recovery Europe, the unknown measures to be of the emerging markets with the most implemented by the US government, excess private sector debt and capital
20 21 FINANCIALINFORME ECONÓMICO RESULTS Y FINANCIERO 01 FINANCIAL RESULTS
Key figures 24 Banca March Group 26 Consolidated balance sheet 31 Customer funds 34 Customer loans 36 Capital markets 38 Capital instruments 39 Consolidated income statement 40
22 23 FINANCIAL RESULTS
BANCA MARCH GROUP BANCA MARCH, S.A.
€M €M 2016 2015 Change 2016 2015 Change
KEY BUSINESS FIGURES KEY BUSINESS FIGURES Equity 4,468.8 4,097.1 371.7 Equity 1,065.6 970.2 95.4 Customer deposits Customer deposits 10,188.9 9,780.1 408.8 and off-balance sheet AuM 16,974.1 16,133.5 840.6 Loans to customers 7,305.5 7,373.8 -68.3 Loans to customers 7,194.3 7,460.2 -265.9 Total assets 12,510.4 12,038.7 471.7 Investments in affiliated companies 2,351.0 2,276.0 75.0 Total assets 17,526.8 16,097.6 1,429.2 RESULTS Net interest income 117.7 132.3 -14.6 RESULTS Gross income 337.2 387.9 -50.7 Net interest income 163.5 181.0 -17.5 Operating income 198.9 157.6 41.3 Gross income 601.4 479.8 121.6 Net income for the financial year 126.6 124.6 2.0 Operating income 306.4 143.2 163.2 Consolidated profit for the financial year 444.5 299.4 145.1 NUMBER OF EMPLOYEES AND POINTS OF SALE Profit attributable to the Group 134.3 100.8 33.5 No. of employees 1,339 1,337 No. of branches 190 195 CAPITAL ADEQUACY AND SOLVENCY RATIOS (%) No. of ATMs 505 490 Total capital ratio 22.2 19.2 NPL ratio 4.0 3.8 NPL coverage ratio 51.1 80.4 Foreclosed assets coverage ratio 52.0 44.0
NUMBER OF EMPLOYEES No. of employees 1,906 1,733
24 25 FINANCIAL RESULTS
BANCA MARCH GROUP
Banca March Group is structured Banca March, S.A. also owns 100% of around the bank’s two main business Banco Inversis, S.A., a Spanish financial lines: banking, complemented by the sector leader which specialises in bank’s insurance and asset management investment services related to the activity, and investment, which focuses execution, custody and settlement of BRANCH NETWORK 2016 2015 on investing in industrial holdings. securities (including investment funds), depository and administration services Retail and Private Banking 175 180 Banca March S.A., the parent company, for investment and pension funds, and Wealth Management 8 7 has been undertaking the Group’s the distribution of the main international Large Companies 5 6 banking activity since 1926. Our business asset management firms’ products via model, which is geared towards family its fund platform. International branches 2 2 businesses and entrepreneurs as Total branches 190 195 well as high net worth individuals, The Group has a retail network of 190 is implemented through the bank’s branches, including one in London and different specialist units: Wealth another in Luxembourg. It has eight Management, Private Banking, Retail Wealth Management centres, located in Banking and Corporate Banking. In the Basque Country, Valencia, Madrid, the Basque Country and La Rioja, our Catalonia, the Balearic Islands, the financial asset management products Canary Islands and Aragón, as well as and services are also distributed through the Luxembourg branch. The Corporate our affiliated company Consulnor, S.A.. Banking business line is delivered out of five locations in Palma de Mallorca, The bank’s insurance operations are Madrid, Barcelona and Valencia. delivered through March JLT Correduría Through these branches – in addition de Seguros, S.A. and March Vida, S.A. to the specialist Private Banking offices de Seguros y Reaseguros, and the asset and Consulnor’s branches – we offer management line is handled by March unparalleled tailored advisory services London Asset Management, S.G.I.I.C., S.A., March to our clients. Gestión de Pensiones, S.G.F.P., S.A. and Artá Capital S.G.E.C.R., S.A. Luxembourg
Bilbao San Sebastián Lleida Vitoria Zaragoza Girona La Rioja Madrid Barcelona Tarragona Menorca Valencia Lanzarote Cádiz Málaga Alicante Mallorca La Palma Tenerife Fuerteventura Ibiza Formentera Gran Canaria
26 27 FINANCIAL RESULTS
*
MARCH MARCH MARCH IGALCA GESTIÓN ASSET Banca March is controlled by Juan, euros, down 10.5% year on year, and CANARIAS DE PENSIONES MANAGEMENT Carlos, Gloria and Leonor March deposits and off-balance sheet assets 100.0% 100.0% Delgado, who together own 100% under management totalled 16,974.1 100.0% 100.0% of the bank’s share capital; none of million euros, an increase of 5.2% versus the shareholders exercises individual 2015. Shareholders’ equity stood at control, be it via share ownership or 1,676.8 million euros on 31 December MARCH MARCH MARCH DE MARCH by any kind of agreement. Investment 2016. The profit attributable to the INMUEBLES VIDA INVERSIONES J LT in industrial holdings is undertaken Group for financial year 2016 was 134.3 75.0% via Corporación Financiera Alba, S.A., million euros. 100.0% 100.0% 100.0% in which Banca March holds a direct stake of 20.0%, following the sale of For the purposes of calculating the 3.91% in 2016. Banca March, S.A. and its capital ratio, Banca March Group proportionally includes 20.0% of MARCH BANCO shareholders hold joint control of 62.6% PRINVER PATRIMONIOS INVERSIS of Corporación Financiera Alba, S.A.. Corporación Financiera Alba. Pursuant to current regulations, the Group’s total 100.0% 100.0% 100.0% As well as managing real estate rental capital ratio as of 31 December 2016 GRUPO CORPORACIÓN assets, Corporación Financiera Alba, S.A. was 22.2%. Capital requirements stood FINANCIERA ALBA holds stable, long-term investments in at 568.3 million euros, with a tier total 20.0% sector leaders including ACS, Actividades capital surplus of 1,011.2 million euros. INMOBILIARIA PRODUCCIONES CONSULNOR de Construcción y Servicios, S.A. (7.5%), MARHIGAL PRINVER Acerinox, S.A. (19.0%), Indra Sistemas, 75.0% 74.0% 48.4% S.A. (11.3%), Euskaltel, S.A. (11.0%), Ebro Foods, S.A. (10.0%), Bolsas y Mercados Españoles, S.A. (12.1%), Viscofan, S.A. (11.0%) and Parques Reunidos Servicios EBRO PARQUES Centrales, S.A. (10.5%). ACS ACERINOX FOODS REUNIDOS 7.5% 19.0% The Group also offers its clients the 10.0% 10.5% chance to acquire holdings in co- investment projects through the special purpose vehicle Deyá Capital. At 31 INDRA BOLSAS VISCOFAN EUSKALTEL December 2016, the Group held co- SISTEMAS Y MERCADOS ESPAÑOLES investment positions in a number of 11.3% 11.0% 11.0% major, non-listed companies: Mecalux, 12.1% S.A., TRRG Holding Limited (formerly known as Ros Roca Environment, C.E. TRRG S.L.), In-Store Media Group, S.A., MECALUX PANASA EXTREMADURA HOLDING LTD Grupo Empresarial Panasa, S.L., Grupo 24.4% 26.5% Empresarial Flex, S.A., EnCampus 1.0% 7.5% Residencia de Estudiantes, S.A. and Siresa Campus, S.A.. SIRESA SIRESA On 31 December 2016, total assets FLEX CAMPUS EN CAMPUS CAMPUS SII on the bank’s consolidated balance 19.7% NOROESTE 32.7% sheet were up by 8.9% to 17,526.8 17.4% 17.4% million euros. Consolidated loans and receivables stood at 8,196.5 million
IN-STORE CLÍNICA Fully integrated MEDIA BAVIERA Accounted for using the equity method 18.9% 20.0% Fair value through P&L
Figures as of 31 December 2016. 1. ACS: Alba divested its entire position over the course of 2017. 2. Parques Reunidos: In early 2017 Alba bought an additional 4.3%, raising its total stake to 14.8%. 3. Flex: On 28 March 2017, an agreement was reached to sell the entire position. 28 29 FINANCIAL RESULTS
€ thousands THE CONSOLIDATED CAPITAL EQUITY RATIO 2016 Change BALANCE SHEET CET 1 1,557,555 21.9% Tier 1 capital 1,557,555 On 31 December 2016, consolidated Tier 2 capital 21,983 balance sheet assets totalled 17,526.8 Tier Total 1,579,538 22.2% million euros, up 8.9% year on year. Loans and advances to customers CET1 capital surplus 989,239 amounted to 7,173.5 million euros, a Tier Total surplus 1,011,222 decrease of 3.5% versus last year’s Capital requirements 568,316 figure. Customer deposits were also up, climbing 7.3% to 10,027.5 million euros. Equity totalled 4,468.8 million euros at On 31 December 2016, in accordance would have stood at 3.1%, down 67 basis 31 December 2016. with the new provisioning criteria points versus 2015 and in line with the outlined in Bank of Spain Circular 4/2016, gradual recovery in the macroeconomic Banca March’s NPL ratio (credit risk and landscape. The NPL coverage ratio OBS exposures) stood at 4.0%, among was 51.1%. the lowest in the Spanish banking sector. Applying the previous provisioning criteria set out in Annex IX of Bank of Spain circular 4/2004, the NPL ratio
NPL RATIO AND NPL COVERAGE RATIO 2016 2015
NPL ratio 4.0% 3.8% NPL coverage ratio 51.1% 80.4%
BREAKDOWN OF ASSETS (€M) BREAKDOWN OF LIABILITIES (€M)
CAPITAL EQUITY RATIO (%) NPL RATIO (%) 20,000 20,000
2,352.2 4,430.2 25 5 15,000 3,726.0 15,000 2,012.4 22.2 4.2 4.0 4,468.8 2,864.2 4,097.1 19.7 19.2 4 3.8 2,756.0 20 10,000 10,000
3 7,435.4 7,173.5 9,494.9 10,161.2 15 5,000 5,000 2 2,180.3 3,058.8 493.2 544.6 10 8 8 8 0 0 1 2015 2016 2015 2016
5 0 Interbank Customer loans Interbank Customer funds 2014 2015 2016 2014 2015 2016
Minimum legal requirement Capital equity ratio Holdings and Other assets Equity Other liabilities capital instruments
30 31 FINANCIAL RESULTS
€M €M
CONSOLIDATED Change CONSOLIDATED Change BALANCE SHEET 2016 2015 Absolute % BALANCE SHEET 2016 2015 Absolute %
Cash, cash balances with central banks and Financial liabilities held for trading 249.2 143.8 105.4 73.3% other demand deposits 2,035.8 460.5 1,575.3 342.1% Financial liabilities at amortised cost 11,226.2 10,507.7 718.5 6.8% Financial assets held for trading 243.9 142.9 101.0 70.7% Deposits from central banks 0.0 0.0 0.0 - Other financial assets designated at Deposits from credit institutions 544.6 493.2 51.4 10.4% fair value through profit or loss 332.7 293.6 39.1 13.3% Customer deposits 10,027.5 9,343.5 684.0 7.3% Available-for-sale financial assets 2,809.0 2,215.1 593.9 26.8% Debt securities issued 133.8 151.4 -17.6 -11.6% Debt securities 2,628.4 2,028.7 599.7 29.6% Other financial liabilities 520.3 519.6 0.7 0.1% Other equity instruments 180.6 186.4 -5.8 -3.1% Derivatives - hedge accounting 29.5 25.4 4.1 16.1% Loans and receivables 8,196.5 9,155.1 -958.6 -10.5% Liabilities under reinsurance Credit institutions 1,023.0 1,719.7 -696.7 -40.5% and insurance contracts 1,309.3 1,128.1 181.2 16.1% Customers 7,173.5 7,435.4 -261.9 -3.5% Provisions 115.0 85.3 29.7 34.8% Held-to-maturity investments 307.2 250.5 56.7 22.6% Tax liabilities 68.5 62.9 5.6 8.9% Fair value changes of the hedged items Other liabilities 60.3 47.3 13.0 27.5% in portfolio hedge of interest rate risk 0.1 0.0 0.1 - Accumulated other comprehensive income 26.2 16.2 10.0 61.7% Derivatives - hedge accounting 154.7 178.4 -23.7 -13.3% Shareholders’ equity 1,676.8 1,671.2 5.6 0.3% Investments in subsidiaries, joint ventures, Minority interests 2,765.8 2,409.7 356.1 14.8% and associates 2,351.0 2,276.0 75.0 3.3% TOTAL 17,526.8 16,097.6 1,429.2 8.9% Assets under reinsurance and insurance contracts 0.6 0.6 0.0 0.0% Tangible assets 433.9 450.7 -16.8 -3.7% Intangible assets 33.5 29.7 3.8 12.8% Tax assets 320.6 366.0 -45.4 -12.4% Other assets 86.8 51.9 34.9 67.2% Non-current assets and disposal groups classified as held for sale 220.5 226.6 -6.1 -2.7% TOTAL 17,526.8 16,097.6 1,429.2 8.9%
32 33 FINANCIAL RESULTS
€M
Change CUSTOMER FUNDS 2016 2015 Absolute %
Customer funds 11,279.1 10,421.2 857.9 8.2 On-balance sheet deposits 11,072.5 10,219.0 853.5 8.4 Public Administrations 219.2 190.3 28.9 15.2 Demand deposits 6,305.8 3,613.1 2,692.8 74.5 Time deposits 2,940.4 4,491.0 -1,550.7 -34.5 Repurchase agreements 355.5 846.9 -491.4 -58.0 Insurance-based saving plans 1,251.7 1,077.7 174.0 16.1 Valuation adjustments 206.6 202.2 4.4 2.2
Marketable debt securities 133.8 151.4 -17.6 -11.6 On-balance sheet deposits 133.5 151.1 -17.6 -11.6 Commercial paper and bills of exchange 33.5 51.1 -17.6 -34.4 Mortgage-backed securities 100.0 100.0 0.0 0.0 Valuation adjustments 0.3 0.3 0.0 -5.6
CUSTOMER OBS Assets under Management 5,561.2 5,560.9 0.3 0.0 FUNDS Investment and private equity funds 1,212.5 1,170.2 42.3 3.6 SICAVs and private equity firms 4,020.4 4,068.2 -47.8 -1.2 Pension funds 328.3 322.5 5.8 1.8 On 31 December 2016, customer funds to 5,561.2 million euros, up 0.5% versus under management by the Group stood year-end 2015. at 16,974.1 million euros, a year-on- Total customer funds managed 16,974.1 16,133.5 840.6 5.2 year increase of 840.6 million euros. Management by the Group of off- Both customer account balances and, balance sheet AuM (investment and to a lesser degree, off-balance sheet private equity funds, SICAVs and assets under management, increased pension funds) is undertaken through in absolute terms. Customer account Artá Capital, S.G.E.C.R., March Asset DEPOSITS AND OFF-BALANCE SHEET AUM (€M) balances were up by 857.9 million euros, Management, S.G.I.I.C. and March or 8.2% year on year, to 11,279.1 million Gestión de Pensiones E.G.F.P.. 20,000 euros. Off-balance sheet assets under 15,000 management rose by 0.3 million euros 5,560.9 5,561.2
133.8 10,000 151.4
5,000 10,421.2 11,279.1
0 2015 2016
Bank Marketable O -balance deposits debt securities sheet AuM
34 35 FINANCIAL RESULTS
€M
Change LENDING 2016 2015 Absolute %
Total lending (broken down by type) 7,038.3 7,397.3 -359.0 -4.9 Commercial bills 291.8 208.6 83.2 39.9 Secured loans: 4,062.8 4,075.2 -12.4 -0.3 - Mortgages 3,028.9 3,439.3 -410.3 -11.9 - Other collateral 1,033.9 636.0 397.9 62.6 Other term loans 2,193.5 1,933.8 259.8 13.4 Other demand and miscellaneous loans 76.8 174.6 -97.8 -56.0 Financial leasing 350.5 433.7 -83.3 -19.2 Reverse repurchase agreements 444.8 -444.8 Other financial assets 62.9 126.6 -63.6 -50.3
Impaired assets 305.4 291.9 13.5 4.6
Valuation adjustments 6.0 5.7 0.3 4.6
CUSTOMER Less impairment losses -155.4 -234.7 79.2 -33.8 LOANS Total loans managed 7,194.3 7,460.2 -265.9 -3.6 At 31 December 2016, total customer At 31 December 2016, gross impaired loans managed by the Group stood at assets were up 13.5 million euros versus Of which: off-balance sheet securitised assets 20.8 24.9 7,194.3 million euros. 2015 to 305.4 million, as a result of the application of the risk classification Over the course of 2016, the balance criteria outlined in Bank of Spain circular of mortgage loans fell by 410.3 million 4/2016. Consequently, the NPL ratio euros, mainly due to the reduction in (credit risk and OBS exposures) stood at the Group’s exposure to the property 4.0% at the end of 2016, substantially TOTAL GROSS LENDING (€M) development sector, to stand at 3,028.9 lower than the sector average. The NPL million euros on 31 December 2016. 8,000 coverage ratio stood at 51.1%. 960.3 437.5 7,000 305.4 291.9 350.5 Other secured loans – primarily backed 6,000 433.7 by cash and securities – increased by 5,000 1,933.8 2,193.5 397.9 million euros, closing the year at 4,000 1,033.9 million euros. On the same date, 3,000 the balance of other term loans stood at 2,000 2,193.5 million euros. 1,000 4,075.2 4,062.8 0 2015 2016
Secured Other loans term loans Financial Impaired Other leasing assets loans
36 37 FINANCIAL RESULTS
CAPITAL INSTRUMENTS
The Group continues to implement a a strong global footprint. Details of the strategy of holding stable, long-term investment portfolio as of 31 December positions in well-run sector leaders with 2016 and 2015 are as follows:
€M
2016 2015 Voting rights held Voting rights held by the group Cost by the group Cost
Consolidated costs: ACS, Actividades de construcción y servicios, S.A. 7.5% 411.0 11.7% 635.7 Acerinox, S.A. 19.0% 608.8 19.6% 610.9 Indra Sistemas, S.A. 11.3% 191.6 11.3% 159.3 CAPITAL the balance available on the European Euskaltel, S.A. 10.0% 166.0 10.0% 149.5 Central Bank (ECB) facility granted in Viscofan, S.A. 11.0% 238.8 6.9% 138.0 MARKETS exchange for pledging certain assets to the Bank of Spain. Ebro Foods, S.A. 10.0% 272.0 10.0% 260.6 Clínica Baviera, S.A. (*) 20.0% 0.0 20.0% 27.9 Throughout 2016, the Group maintained The Group’s liquidity coverage ratio substantial available liquidity assets, (LCR) remained stable throughout Consulnor, S.A. 48.4% 11.3 48.4% 10.2 the year at substantially above 200%, which totalled 3,732.2 million euros on Bolsa y Mercados, S.A. 12.1% 318.2 10.6% 283.9 31 December 2016, as detailed in Note complying comfortably with regulatory 7.3 on the Group’s consolidated annual limits. Parques Reunidos Servicios Centrales, S.A. 10.5% 133.4 0.0% 0.0 accounts. Banca March’s available TOTAL 2,351.0 2,276.0 liquidity assets include interbank balances, liquid portfolio assets and (*) The holding in Clínica Baviera, SA was classified at 31 December 2016 as a non-current asset held for sale.
€ thousands 2016 Through the special purpose vehicle Deyá Holding Limited (formerly known as Ros Capital, the Group’s available-for-sale Roca Environment, S.L.), In-Store Media High-quality liquid assets (numerator) 3,585,320 portfolio comprises a range of holdings Group, S.A., Grupo Empresarial Panasa, Total net cash outflows (denominator) 1,302,809 in leading non-listed companies, which S.L., Grupo Empresarial Flex, S.A., Cash outflows 2,327,510 it offers to clients as co-investment EnCampus Residencia de Estudiantes, opportunities: Mecalux, S.A., TRRG S.A. and Siresa Campus, S.A.. Cash inflows 1,024,701 LCR (liquidity coverage ratio) % 275.2%
38 39 FINANCIAL RESULTS
€M
PROFIT ATTRIBUTABLE Change TO THE BANCA MARCH GROUP 2016 2015 Absolute %
Net interest income 163.5 181.0 -17.5 -9.7% Dividend income 21.4 3.7 17.7 478.5% Share of profit/loss from companies accounted for using the equity method 167.7 62.8 104.8 166.9% Net fee income 164.1 167.0 -2.9 -1.7% Net gains/losses on financial transactions 70.5 47.9 22.6 47.1% Net gains/losses on foreign exchange 32.4 28.1 4.2 15.1% Other operating income 24.7 23.3 1.4 5.9% Other operating expenses 20.5 15.0 5.5 36.6% Income from assets under reinsurance or insurance contracts 460.3 250.0 210.4 84.2% Expenses from liabilities under reinsurance or insurance contracts 482.7 269.1 213.7 79.4%
Gross income 601.4 479.8 121.6 25.3% Administrative expenses 232.8 221.8 11.0 5.0% Depreciation and amortisation 27.6 25.8 1.8 6.8% Provisions or reversal of provisions (net) 39.1 33.7 5.4 15.9% Impairment of financial assets -4.5 55.2 -59.8 -108.2%
CONSOLIDATED Operating income 306.4 143.2 163.2 114.0% Impairment of Investments in joint ventures, INCOME and associates -27.9 -43.6 15.7 -36.1% STATEMENT Impairment of non-financial assets -0.1 0.0 -0.1 0.0% Gains/losses on disposals of non-financial assets and holdings (net) 156.9 128.3 28.6 22.3% Profit attributable to the Group stood Net interest income totalled 163.5 Negative goodwill recognised in profit or loss 0.7 0.0 0.7 0.0% at 134.3 million euros on 31 December million euros. Net fee income fell by 2016. Net interest income fell this year 1.7% to 164.1 million euros. These fees Gains/losses from non-current assets classified as held for sale -27.3 -14.8 -12.5 84.6% as a result of the interest rate scenario, are generated through the provision but fee income held steady. Loan-loss of collection and payment services, provisions were also lower, thanks mainly credit and debit cards, payment Profit/loss before tax 464.6 300.2 164.3 54.7% to the quality of debt and efficient orders and bank bills. They also stem Tax expenses or income 20.1 0.8 19.2 2276.0% restructuring of the balance sheet, to from bank guarantees and securities the application of the new provisioning services, as well as the sale of insurance, model outlined in Bank of Spain circular investment and pension funds and Profit/loss for the period 4/2016, and to the capital gains from specialist financial products. from continuing operations 444.5 299.4 145.1 48.5% the sale of 4.2% of Actividades de Profit/loss from discontinued operations 0.0 0.0 0.0 0.0% Construcción y Servicios, S.A.. Consolidated profit/loss for the period 444.5 299.4 145.1 48.5% Profit/loss attributable to minority interests 310.2 198.6 111.6 56.2% Profit/loss attributable to the parent company 134.3 100.8 33.5 33.2%
40 41 FINANCIAL RESULTS
At 31 December 2016, profits from loans and other receivables worth a companies accounted for using the total of 6.6 million euros. equity method stood at 167.7 million euros. Gains on financial transactions, On 31 December 2016, operating stemming from trading activity and the income stood at 306.4 million euros. disposal of securities from the available- Over the course of 2016, the Group for-sale portfolio, as well as from saw a turnaround in impairment of the the increased value of the portfolio investment portfolio worth 27.9 million of other financial assets at fair value euros, as the stock market recovery through profit or loss, totalled 70.5 buoyed prices. The Group also sold million euros. Gains on foreign exchange a 4.17% stake in ACS, Actividades de transactions amounted to 32.4 million Construcción y Servicios, S.A., for a euros. As a result, gross income for the total of 374.6 million euros, generating year grew to reach 601.4 million euros capital gains of 157.3 million euros. NET INTEREST NET FEE CONSOLIDATED PROFIT INCOME (€M) INCOME (€M) FOR THE PERIOD (€M) as at 31 December 2016. 250 200 500 At year-end 2016, personnel and other 167.0 164.1 415 administrative expenses totalled 232.8 181.0 million euros, up 5.0% year on year. 185 163.5 150 330 444.5 299.4 Thanks to the bank’s high quality, 125 100 250 efficiently structured balance sheet
and as a result of the application of the 165 provisioning criteria outlined in Bank 62 50 of Spain Circular 4/2016, 2016 saw a 80 reversal in the impairment losses on 0 0 0 2015 2016 2015 2016 2015 2016
42 43 FINANCIALINFORME ECONÓMICO RESULTS Y FINANCIERO 02 MAIN BUSINESS LINES
Wealth Management 46 Retail and Private banking 48 Corporate Banking 57 Subsidiaries 64 March A.M. 64 March JLT 66 March Vida 68 Consulnor 70 Banco Inversis 71
44 45 MAIN BUSINESS LINES
offered by the market for each asset WEALTH class.
MANAGEMENT For some time now, we have been advising our clients to hold a certain The Wealth Management area provides proportion of alternative assets in their specialist services for family business portfolios. Depending on the customer’s owners and high-net worth individuals risk profile, we suggest these assets and families requiring tailored monitoring account for between 10% and 30% of of both savings and investments over the portfolio. Alternative assets are the medium and long term. Our goal is particularly important in the current to help our clients preserve and grow market scenario, with record low interest their wealth, and pass it down to future rates and global stock markets expected generations. to underperform versus previous years. In recent years market volatility has We offer a broad range of products and also been high and correlation between services, including discretional portfolio the traditional asset classes – debt and management, investment funds, equities – has risen. SICAVs, structured products, financing, traditional banking products and co- In 2016, our clients’ portfolios investment. outperformed their benchmark indices. This was made possibly largely by the Co-investment is a core component of strong performance of SICAVs, in which our unique value proposition, made some of our clients hold substantial possible by the fact that Banca March positions. is the fund manager through which The fund undertook five investments in is a family-owned bank. Co-investment On 31 December 2016, Wealth Banca March Group invests in non-listed 2016: means our clients can invest in the same companies. The Group’s investments products and projects as the bank’s Management had 8.1 billion euros under of this nature total almost 200 million 1. Comess Group: a leading Spanish shareholders. management, up 4.0% year on year. restaurant franchise group. The euros. company’s top brands are Lizarrán Banca March Group receives an These results are in line with the As for March Campus, a co-investment (beers and tapas), Cantina Mariachi abundance of investment proposals of increase in the division’s off-balance project created in late 2012 to develop a (Mexican food) and Pasta City (Italian all different kinds. We carefully analyse sheet assets under management versus portfolio of student residences in Spain food). these proposals and then undertake any 2015, particularly in funds, pension plans investments which we consider to be and Luxembourg-domiciled products. In by acquiring existing residences and 2. Discefa: one of Europe’s top frozen compelling opportunities, inviting our terms of the year-on-year increase in building new ones, the key highlight for octopus processors. clients to invest alongside us and giving inflows, two regions really stood out 2016 was the opening in September of them the benefit of our experience and in 2016: Levante (9.1%) and the Canary the residence in Claudio Coello, Madrid, 3. Caiba: Spain’s second-largest expertise. We feel that sharing these Islands (8.3%). which is now fully operational. manufacturer of PET bottles and investment opportunities is the best packaging with a 17% market share. As for our co-investment products, By 31 December 2016, the mezzanine possible expression of our commitment one key development this year was debt fund managed by Oquendo Capital 4. Rotecna: a domestic and global to clients and investors alike. the launch of the second Artá Capital had invested 156.8 million euros, 99% of leader in the manufacture and sale of We also believe in open architecture, private equity fund, called the Artá the total investor capital committed as equipment for pig farms. which allows us to offer independent, Capital Fund II. The fund implements of 31 December 2016. Since the fund’s 5. Multiasistencia: European leader in flexible advice, and we therefore sell the same investment policy as its inception, investors have netted 18.2 household claims management for other international financial institutions’ predecessor, Deyá Capital, which is now million euros in capital reductions and banks and insurers. products. We seek the best product in the divestment phase. Artá Capital dividend pay-outs.
46 47 MAIN BUSINESS LINES
The fund hopes to complete its final RETAIL STREAMLINING THE RETAIL AND PRIVATE BANKING BRANCH NETWORK investment in the first quarter of 2017, 300 80 after which the Oquendo Mezzanine II AND PRIVATE 73.6 SCA SICAR portfolio will be closed with 250 70 a total of 14 positions. BANKING 254 68.2 231 60.8 In 2017, the Wealth Management area’s 200 217 201 60 196 main goals are as follows: BRANCH 180 46.7 175 AND ATM NETWORK 150 54.5 50 • Continue to expand the customer 42.3 base and generate stronger, multi- Over the course of 2016, we continued 100 40 product loyalty among existing to adapt our branches to changes in the 28.8 customers. sector and to our customers’ needs. 50 85 68 66 30 48 43 39 46 • Enhance brand recognition, rolling The digital transformation, coupled with 0 20 out our range of products and our tailored advice-based business model, 2010 2011 2012 2013 2014 2015 2016 services to regions of Spain where we has led us to channel our branch network Branches 1 - and 2 - employee branches Volume/branch (€M) are not yet present, such as Castilla y towards larger-scale business centres, León, Galicia and Asturias. where we can offer our customers the AVERAGE NUMBER OF EMPLOYEES PER BRANCH services they need in a comfortable, • Shore up our range of products and professional setting. 6 services in Luxembourg. Our goal is to be a direct, long-term 5 • Fully integrate Consulnor into 4.0 3.9 4.06 partner to our customers and to fully 3.7 Banca March. 4 3.5 meet their banking needs. We ensure 3.3
they can carry out their day-to-day 3 transactions from anywhere, on any device, 24 hours a day, 365 days a year, 2 and the mobility of our advisors also provides for personal, tailored customer 1 services. 0 Our online banking services mean 2010 2011 2012 2013 2014 2015 2016 Banca March customers can enjoy greater autonomy in their banking activity. This facilities with larger teams of highly different geographic areas with significant was further enhanced by the initiative qualified professionals, and the opening domestic and international footfall. The to provide all managers with tablets, so of certain inner-city branches with long- number of standalone ATMs increased they can complete transactions, generate term potential. by almost 7% year on year. simulations and sign contracts using digital signatures on any customer visit, We have a broad ATM network, which In 2016, we commenced migration to removing the need for branch visits. saves our customers time and affords Windows, which will allow for new ATM them greater independence in their functions, as well as contactless and We continued to streamline Retail and banking activity, enhancing both the mobile (NFC) cash withdrawals. Private banking branches from 180 to quality of our services and our advisory 175 in view of the ongoing process of capacity. transformation and rightsizing. The key features of this adjustment were the We have a total of 505 ATMs, of which integration of analysis centres into bigger 331 are standalone ATMs in a range of
48 49 MAIN BUSINESS LINES
PAYMENT Management, Private Banking and METHODS Corporate Banking areas – provides our customers with a guarantee of exacting In 2016, a number of banking institutions standards and the utmost commitment. – including Banca March – reached an This commitment is best demonstrated agreement with the mobile peer-to- by our co-investment vehicles, which peer (P2P) payment platform Bizum. offer Banca March customers the This innovative mobile app allows users opportunity to invest in the same to send money instantly, easily and products as the bank’s shareholders. securely, with no need for an ATM or a card. One example of the co-investment opportunities we offer are our Another key milestone was the launch institutional SICAVs, Torrenova, Bellver of Banca March’s ANY PAY mobile app, and Lluc, which were created over 20 which allows any smartphone to be years ago to provide an investment used as a Point of Sale (POS) terminal. vehicle for the bank’s shareholders and The app allows businesses, the self- customers alike. employed and liberal professionals, such as mobile freelancers, notaries, Other co-investment vehicles include law firms and participants in trade fairs the funds Deyá Capital, Oquendo or events, among others, to process Mezzanine, Artá Capital, EnCampus and occasional card payments. Mercapital.
The tools allows these professionals to We also offer a range of products take payment using EMV and magnetic through our asset manager March These products attract both large and services for professional groups, which stripe cards, send receipts by SMS or A.M., which further underscore our small investors, and in 2016 registered has allowed us to step up the number email and register products, simplifying commitment to our clients: year-on-year growth in off-balance sheet of agreements signed with these orders and sales. Users can also search assets under management of 13.2%. associations. for transactions and carry out refunds. - The first and only global equity fund The app provides transaction graphs and investing in companies linked to the Another compelling investment can be easily configured by the user in wine industry value chain, March opportunity given the current market line with their requirements. ViniCatena. scenario are our retirement products. CUSTOMER Through March Vida, our unit-linked life EVENTS - The Family Businesses Fund, a insurance plans offer two alternative global equity fund which invests in investment formats, depending on the In 2016, 146 events were organised PRODUCT a selection of the best listed family- client profile: structured deposits, which with Private Banking customers, which DEVELOPMENT owned companies, where 25% is allow clients to combine an attractive were attended by approximately 4,500 AND SALES owned by a single family and the yield with redemption windows, and people. intention is to transition this holding The global financial markets remained March Vida’s Multifondos, through down to the next generation. The different types of events held can highly volatile in 2016, in line with which clients invest in a certain portfolio be broken down into: the previous year. In addition to this - Fonmarch, F.I., Spain’s longest- of funds depending their risk profile. volatility, interest rates are at record standing investment fund. Our more traditional products also • Market strategy presentations. lows, and regulatory requirements are continue to sell well and in many cases, more stringent. - We also continue to promote our At these meetings, held early on in risk-profiled funds, a range of à la can be tailored to meet our customers’ the year, we give clients an overview Given the circumstances, our business carte investment products that allow needs: discounted mortgage rates, flat- of Banca March’s strategic outlook for model – which foregrounds specialist investors to vary their degree of fee current accounts and credit cards, advisory services in the Wealth equity exposure. among other products. In this product the economic and market landscape. segment, we have developed a series of We also offer five investment ideas
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for their portfolios over the course of • Events in partnership with the the year. Juan March Foundation.
• Institutional SICAV monitoring Every year, the Juan March meetings. Foundation offers Banca March’s €M customers access to previews of the 2016 2015 Change (%) The team in charge of monitoring main exhibitions inaugurated at the Banca March’s institutional SICAVs Foundation’s headquarters in Madrid. Risk insurance 6,700.4 6,394.7 4.8% gives a first-hand account of the Savings insurance 9,420.8 7,441.7 26.6% results and performance obtained • Meetings with business leaders. to the customers who co-invest with Retirement insurance and pension plans 5,933.7 5,241.5 13.2% Banca March through these vehicles. These meetings are held to discuss TOTAL BANCASSURANCE specific issues of interest to family AND RETIREMENT PLANNING 22,054.9 19,077.9 15.6% • Investment forums. business leaders in particular, such as taxation and succession planning, At these events, Banca March invites and to monitor certain investment three international asset managers to products, among other topics. take part in a debate on the markets, BANCASSURANCE INCOME BY REGIONAL DIVISION moderated by Banca March’s Director AND RETIREMENT PLANNING of Private Banking. These debates are a clear expression of Banca March’s The bancassurance and retirement planning business performed well open architecture approach. SPANISH overall in 2016, with revenues of 22.1 MAINLAND • Tax meetings. million euros, up 15.6% year on year. DIVISION €4.5M Banca March holds regular meetings Broken down by region, the revenues BALEARIC with its customers to inform them reported were as follows: 13.4 million CANARY ISLANDS of all tax-related developments that euros in the Balearic Islands, up 14.1% ISLANDS DIVISION €13.4M year on year, 4.5 million euros in DIVISION could impact the management of €3.1M their assets. The bank has a specific mainland Spain, up 22.8%, and 3.1 million tax department comprising a team of euros in the Canary Islands, up 14.3%. top-level professionals. Broken down by segment, the revenues were distributed as follows: Retail Banking accounted for 13.3 million euros, up 10.7% versus 2015, Private Banking generated revenues of 7.2 million INCOME BY SEGMENT euros, up 25.9%, and 0.57 million euros corresponded to Corporate Banking, up 25.8%.
PRIVATE BANKING €7.2M
RETAIL BANKING €13.3M
CORPORATE BANKING €0.6M
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In 2016, saving products were the way in which our company – quite WEBSITE • This advertisement was sent out via bestsellers in the insurance area, with rightly – adds value in the retirement a segmented strategy and attracted a 26.6% increase in business volume planning segment. Our corporate website attracted 2.4 interest from 4% of clients. and revenues of 9.4 million euros. This million users in 2016. However, the key positive performance was channelled Our permanent range of risk insurance milestone in terms of online advertising • Of this initial interest, 11.9% was mainly through our unit-linked products, products offers our clients added value last year was our first ever launch converted to loan applications, MV Ahorro and annuities. Revenues in various forms, including product page, larespuestaesbancamarch.com, of which 36.7% were eventually from retirement savings, through improvements across all three segments, which is the digital complement to our approved and signed. the simplicity of insurance sales and the traditional offline advertising campaign. pension plans, insured pension plans • This initiative represents an transparency of the coverage and limits (PPAs) and SIALP long-term savings This online advertising campaign outstanding example of multichannel in place. products, exceeded 5.9 million euros, up enhanced brand recognition, banking. Client interest is sparked 13.2%. Our new range of Premium products generating 75,647 visits, and boosted digitally, and the product is eventually our commercial activity, providing taken out in-branch. The loans taken Training continued to be one of our top for high-value customers in the Retail our managers with a total of 312 new out by customers who saw the ad priorities in 2016. Particular emphasis Banking area will be launched this client leads. online and subsequently carried out was placed on the need to manage client year. This product line, in addition to the transaction in-branch totalled portfolios as effectively as possible, improvements to our Exclusive range for 4.2 million euros, 55.2% of the total honing in on each customer’s specific Private Banking customers and the sale volume. needs to provide the ideal insurance of specific products (credit, damages, ONLINE solution. D&O) for Corporate Banking clients, BANKING will be the key focus of our insurance Our quality and management-related activity this year. Our online banking facilities continue to MOBILE goals for 2017 are focused on the expand; we now have over a hundred APP following key phases: thousand active users (meaning accounts accessed at least once in the Our mobile app was developed to • Depending on customer risk profile MULTI-CHANNEL past six months). We are working on respond to our clients’ growing mobility and market performance, we will BANKING two key activity lines: needs. It is undoubtedly our fastest- channel volumes from various savings In this area, our objectives are three- growing channel, with a spectacular products into other alternatives • Continuous improvements to our increase in usage figures. In 2013, fold: to traditional time deposits. These Remote Banking service in line with it represented just 5.2% of remote developments to our systems. volumes will mainly flow into our Quality banking. In 2014, this figure was up to unit-linked, savings and annuity 9.3%, and by 2015, it had hit 18.9%. In • Business generation via segmented We seek to provide simple, agile, the year 2016, transactions undertaken products, providing stronger returns actions that attract and redirect excellent services, whichever channel by our customers via our mobile app for our clients. branch customer flows. The main our customers use to interact with us. stood at 31.4% of all remote banking actions undertaken in 2016 to • Advisory services in retirement transactions. planning will be a key activity line Business generate new business were the over the year. The future pension leasing services and export insurance We operate directly in the Retail and landscape means we must help through the state-owned organisation Private Banking segments by generating meet the need for private long-term CESCE, as well as actions in the CONTACT CENTRE sales leads and providing support to all savings products to complement retirement planning and insurance bank divisions. segments for EU residents. Contact Centre activity grew by 34.0% in state pension programmes. The 2016, as we continued to transform this various tools available to our network Efficiency Our extremely successful pre-approved channel from solely providing support of managers and branches are key loan initiative also deserves a special for online banking users to adding value to providing forecasts and advisory We design the most efficient multi- mention: throughout every area of the bank. services in this area. Our pension channel combination possible depending plans, leaders in their respective on the needs of each customer segment categories, clearly demonstrate the at any given time.
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The Contact Centre is a strong source of SOCIAL Banca March’s Corporate Banking business generation, with new services MEDIA CORPORATE area enjoyed a successful year. The including: BANKING fees generated – which accounted for We continued to expand our social almost 54.6% of the ordinary margin • Consolidation of the reverse- media footprint this year, generating AND MARKETS on the income statement – practically factoring service we launched in 2015. specialist content that helps position offset the drop in net interest income. This service allows us to manage our our brand as an advisory expert. These results clearly evidence the customers’ suppliers proactively, In 2016, Banca March continued to effectiveness of Banca March’s strategy • On LinkedIn, we use a one-to-one stepping up advance payments of position itself as a bank which, as well in the Corporate segment of offering strategy that allows our managers to invoices remitted to our customers as offering corporate financing and both advisory and financial services. to 3.3 times the amount received in position themselves as go-to voices transaction solutions for companies, advance payments last year. and reach highly segmented target also provides added-value specialist All of the specialist business units clients. Our profile now has 7,781 advisory services. comprising the Corporate Banking area • Euro Accounts. This service, through contacts, up 16.3%. contributed to this improvement in the which we help EU residents buy Swift decision making and an ability overall results, as did the sales team at • On YouTube, we post weekly homes, attracted 481 new customers to adapt to each customers’ specific the five Large Companies offices (the videos on our market outlook and in 2016. circumstances are both crucial to Large Companies units for the Balearic investment strategies. Our videos got the Corporate Banking business. Islands, Madrid, Catalonia-Aragon • Information for potential clients. The 136,805 views through this channel in Banca March boasts highly-specialised and the Levante region, as well as the Contact Centre provides support 2016, up 49.7% versus 2015. corporate banking teams – our Large Expansion branch). The ability to provide for advertising campaigns and Companies Units – as well as a portfolio family businesses with advisory services agreements with professional groups. • Our Twitter account chalked up 1,066 followers in December 2016, a year- of products and services which, in the fields of capital markets financing on-year increase of 34.4%. alongside our financing, transaction and to offer alternatives to bank funding, cash management services, also includes as well as in M&A and in corporate comprehensive specialist corporate insurance with global coverage (through advisory services provided through the our insurance brokerage, March JLT) Capital Markets unit, the M&A unit and is an advantage that very few financial the insurance broker March JLT. institutions can offer their middle- income level clients.
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The sales teams at the Large Companies M&A offices cover an increasingly large geographical area and are highly The overriding objective of the specialised, both of which are key factors Banca March M&A unit is to complete in terms of providing responsible, quality the end-to-end range of solutions advisory services. offered by the bank to its customers, forging close ties and providing long- The bank achieved outstanding results term advisory services. The unit works by ramping up the distribution of with Banca March clients to seek treasury management products. The solutions for any shareholding and Capital Markets area has allowed for the strategy-related concerns the business creation and distribution of a portfolio owner and family business may have in of products which is constantly adapted any area of corporate activity: to fluctuations in the forex market, interest rates and commodity prices. • Identify and integrate investment We have also made substantial headway partners for companies or for specific in the distribution to professional and projects. institutional investor clients of various • Acquisition-based growth as a structured vehicles to provide regulated complement to organic growth or in market financing for our Corporate sectors which are trending towards Banking customers. consolidation.
Banca March remains fully committed • Full or partial divestments of to growing in Corporate Banking, rolling companies or businesses as a solution out our specialist business model and in late 2015, the unit advised a range CAPITAL when succession is not an option, of companies on deals in the insurance, MARKETS harnessing synergies with the other in response to highly fragmented bank areas and Group subsidiaries. This retail, transport and logistics and shareholdings or when part of the The main goal of our Capital allows us to offer our target customers, passenger transport sectors. The M&A group is deemed non-strategic. Markets unit is to seek solutions for comprising businesses and business team is structured to work on both the structured financing needs of owners, a complete, unparalleled domestic and international deals in • Mergers and spin-offs of companies Banca March’s clients, including bank range of products and services for their a range of sectors, drawing on the and businesses. financing and funding sourced from business activity which fully reflect extensive experience of its various alternative investors. Banca March’s values and principles and • Management buyouts (MBOs). members. are highly competitive in terms of price, • Transactions related to rental assets To that end, the Capital Markets team is quality, flexibility and efficiency. as a solution to monetising part of the active in the following areas: In 2017, the Corporate Banking area will portfolio or in response to the search 1. SYNDICATED FINANCING continue to provide end-to-end advisory for different investment alternatives. services to business owners, enterprising Covers all corporate financing, • Equity capital market transactions. families and family businesses – large or acquisition financing and structured mid-sized – which, as customers of any • Other strategic advisory services: financing transactions involving two of our segments, place their trust in us Strategic plans, valuation reports, or more financial institutions. to protect and manage both their private analysis of potential synergies in Banca March participated in 21 and business assets. We provide these M&A transactions. clients with an expansive range of tailored transactions in 2016 totalling corporate banking services, regardless of In 2016, the first full year of activity for over 8.8 billion euros in financing. where they are and what they do. the M&A team, which was assembled Banca March’s share of the financing stood at over 210 million euros.
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In the last four years, Banca March Since 2014, Banca March has worked Banca March acted as sole lead dealer on Acciona’s ECP (European has managed positions in syndicated tirelessly on initiatives to secure short- arranger, bookrunner and placement Commercial Paper) programme. loans worth over 700 million euros term funding for companies through agent. through over 50 transactions. the capital markets. We spearheaded 3. PRIVATE CAPITAL MARKETS the creation of commercial paper At year-end 2016, the total limit on Private capital markets encompass These deals took a broad range programmes in Spain’s Alternative MARF programmes managed by long-term financing transactions of formats, including corporate Fixed Income Market (MARF), Banca March stood at over a billion carried out between middle market transactions (ACEK, Europastry, which allows qualified institutional euros, with over 1.5 billion euros companies, i.e. those with average Vidrala and Instituto de Empresa), investors to finance these companies. placed since 2014 with institutional capital markets transactions (Antolín) investors, clearly demonstrating the annual revenues of between 100 and acquisition-related transactions In 2016, Elecnor, Tubacex, Europac, success of the product. million and 1.5 billion euros, and (Ingesport, Noa Brands Europe and Barceló and IM Fortia I (securitisation institutional investors. Martinavarro). of receivables) renewed their This financing model aims to allow Banca March advises its clients commercial paper programmes with commercial paper issuers to optimise 2. PUBLIC CAPITAL MARKETS Banca March. These programmes financing costs and diversify sources. throughout the process of currently have limits of up to identifying opportunities, drafting This segment comprises financing There was also substantial demand and coordinating the documentation transactions in the European and 825 million euros. Banca March is sole lead arranger, acting as for the commercial paper issued required for analysis by potential domestic public markets, both by among professional investors, investors, and optimising and qualified institutions which have the structuring agent (registered advisor), and the distributor as it represents an alternative to undertaking the entire process of public ratings, and companies which other investment products, given selecting the optimal financing do not. (bookrunner) and placement agent on all issuances undertaken through the declining yields on short-term alternative for the client. In 2016, Banca March was appointed these commercial paper programmes. products such as term deposits and government bonds. The risk involved Throughout 2016, Banca March as a dealer on Acciona’s EMTN (Euro continued to complete transactions Medium Term Notes) programme, Banca March also structured two is also very controlled, thanks to the new commercial paper programmes issuers’ credit ratings and the short under the agreement reached in 2014 managing long-term issuances worth with Mutua Madrileña to participate over 130 million euros. in 2016: Gestamp (150 million euros) maturities. and Maxam (100 million euros). jointly in the financing of Spanish At the global level, in 2016 companies with a certain credit rating Banca March was appointed as a and level of returns on the financing
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gradually falling margins, making it an even greater achievement.
The contribution made to Banca March’s results by liquidity management activities – aimed at optimising financing costs and creating treasury management products for each of the bank’s areas – increased by 17.0% year on year. On the operating front, adapting to MiFID II involved substantial efforts. Although the best practices demanded were already in place at Banca March, the legislation required that certain procedures be completed to demonstrate this, which necessitated major technical developments to adapt the tools used by the bank.
As for the sale of treasury management products to customers, adapting to MiFID II also required a certain amount of work to provide for even safer operations for our clients. Our highly provided. Banca March acted both TREASURY specialised products and services mean as financing bank and originator, AND MARKETS we can accurately respond to our clients’ as well as managing the credit needs in any environment, which drove Treasury and Markets (T&M) risk to be underwritten by Mutua a 22.0% increase in this business area maintained the robust growth rate it Madrileña. Through this strategy, versus last year. There were widespread has enjoyed in recent years. T&M is new agreements were closed with a increases across both asset classes and not just a regular treasury department; range of global institutional investors client numbers, but one of the most aside from the standard liquidity and in 2016. noteworthy was the volume of 2.5 balance sheet management, its goal billion in forex hedges. Banca March is firmly committed to is to provide services to the bank’s this strategy, which bridges the gap entire customer base. This requires us The methodology and quantitative between origination and distribution to be deeply specialised in each of the research team continues to facilitate – the former involving liaising with various functions performed, so that we the continuous improvement process, companies and the latter with can meet the demands of the various rolling out 38 projects comprising 175 investors – in order to spearhead a different business areas. actions. This team is without a doubt dynamic, demanding market in which an excellent growth driver for the In 2016, revenues were up by 20.0%. This the quality of a company’s services, unit, allowing us to face the future increase took place despite the complex management and reputation are with greater confidence, in spite of the backdrop, with strict risk management essential for success. uncertain financial landscape and ever- standards, uncharacteristically low – changing regulations. and even negative – interest rates and
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programmes of some of Spain’s main start to the year meant our funds had conservative stance, capital preservation SUBSIDIARIES political parties led to certain doubts their work cut out to recover previous and long-term approach. These are the around these investment vehicles. This levels of returns. Nonetheless, March key characteristics that have earned MARCH A.M. political uncertainty gave rise not only A.M. successfully harnessed the market March A.M. the absolute trust of its to substantial indecision among Spanish opportunities that emerged after the investors. In 2016, March A.M. had a total of investors, but also to major concerns summer, returned to positive ground 6,386 million euros in assets under over the possible impact on Spanish and managed to generate highly All of our funds performed well in management (AuM), up slightly by 1.3% economic growth. compelling yields and position our funds terms of returns. March Pensiones year on year. Total AuM was hampered at the top of their respective rankings 80/20 F.P., closed the year as the top slightly by uncertainty around the On the flipside, positive factors by year end. Our star fixed income fund, performer in its category with returns regulatory framework for SICAVs, the included the ongoing growth of the Fonmarch, posted returns of 3.86% of 3.78%, according to data compiled only asset type in which March A.M. Luxembourg-domiciled funds managed even with interest rates at close to 0%. by the financial daily Expansión. March saw AuM fall in 2016. The 3% drop by March A.M., which hit total assets In the equity component, March Global Pensiones 50/50 FP returned 4.58% and in AuM registered by these vehicles under management of 1,350 million closed the year with returns of 13.13%. March Acciones FP chalked up returns was less pronounced than the sector- euros. The growth registered by March Institutional SICAVs, our co-investment of 10.76%, both finishing second in their wide decrease, which Inverco data Global International Investment was vehicles par excellence, also registered respective rankings. particularly impressive. March A.M.’s outstanding results. Torrenova Sicav shows stood at 3.8%. The fund house Once again this year, March A.M. Spanish funds saw a 3.6% increase in returned 2.06%, Cartera Bellver Sicav generated strong returns across the received a range of awards and assets under management. The assets returned 5.75%, and finally, Lluc Valores entire product range, positioning March accolades from various organisations in A.M.’s funds among the top performers managed through pension plans and closed the year with returns of 10.35%. funds chalked up the most substantial the asset management industry, both in the market in the key rankings, which in Spain and internationally. The fund underscores the outstanding levels of growth last year, rising by 16.0% versus In the early part of the year, as volatility meagre sector-wide growth of 2.2%. reigned and stock markets crashed, the house was awarded first place in the commitment and loyalty among our 2016 portfolio management contest clients and investors. sales team channelled all its efforts into In management terms, market volatility staying in close contact with clients and organised by Expansión and Allfunds The 2016 political landscape was less was one of the defining features of 2016. the branch network. The team conveyed Bank. This award clearly evidences our than ideal for SICAVs. The reform The year opened to plummeting markets confidence and calm and evoked, as team’s outstanding asset management proposals and potentially tougher tax that took almost all asset management always, the cornerstone of March A.M.’s expertise. It was named Best Fund treatment featured in the electoral industry players by surprise. This tricky investment policy and philosophy: our Manager in its category at the 2016
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edition of the prestigious European MARCH JLT Funds Trophy Awards. Our fixed income management was also awarded a triple The lack of major infrastructure projects A rating by the UK publication Citywire; globally and the sluggish local economy for part of the year, March A.M. was the did not provide the best environment for only asset manager in Spain to boast the the bank’s insurance brokerage business maximum Citywire AAA rating. in 2016. The construction sector is no longer the main growth driver and given The coming year poses some significant this complex market scenario, March challenges for March A.M. Our key goal JLT continued to channel its efforts will be to continue to offer attractive into greater specialisation, rolling out returns for our clients with contained an ambitious transformation plan to levels of risk and volatility. Adapting further this strategy in 2016. to MiFID II will involve major changes both for our asset management arm This transformation is geared heavily and for the rest of the sector. The final towards large accounts with a challenge we face – the technological consultation-based sales approach, advances underway throughout and focused exclusively on sectors that financial sector and certainly at March add significant value. This specialist A.M. – also represents the emergence approach requires more concentrated, of many great opportunities. centralised resources with a larger technical component, as opposed to a more general, nationwide structure, which can see excess capacity squeeze business margins. The process is also the Spanish market. Our expertise in the approach, comprise the key insurance underway to centralise services of lesser tourist sector also made for a strong business lines. This business structure, value in order to enhance efficiency and year in that segment, with 15% growth combined with a robust centralised reduce more administrative resources allowing us to safeguard our existing operations area and a highly technology- with a view to incorporating new, highly leadership position thanks to our strong driven approach, means the brokerage specialised sales profiles. foothold in the Balearic and Canary business is in an optimal position to Islands. guarantee substantial growth in returns As a result of this strategy, the marine for shareholders in the years to come. segment performed exceptionally The strategic plan for 2017 to 2019 well in 2016. Following the acquisition underscores our firm commitment to in December 2015 of Bilbao-based brokerage services for large accounts, insurance broker Luis Baroja, S.L., March to providing highly specialised services JLT has positioned itself as the unrivalled and to our international expansion sector leader, with year-on-year growth in partnership with Jardine Lloyd of 23.4% in business volumes. We also Thompson. This drive towards greater completed the definitive deployment specialisation has given rise to the of our reinsurance operations in 2016; creation of five sector-specific business we secured 42.8% growth in this units – Construction, Energy, Industry segment and are now among the top and Services, Marine and Aviation players in the Spanish market. Thanks and Leisure and Tourism – and two to our association with the JLT Group, product lines – Employee Benefits and we continue to be a major channel for Financial Risk. These, teamed with the Latin American insurance business into reinsurance operations and a middle market unit with a specialist product
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MARCH VIDA SIALP is a long-term savings product stood at 14.9 million euros, up 22.0% that offers tax advantages after the year on year. At the end of 2016, March Vida’s fifth year. March Vida Renta Reinversión portfolio stood at over 85,000 policies, is a life annuity aimed at over-65s who In 2017, March Vida will strive to uphold with technical reserves of 1,306.0 want to invest their capital gains in an the robust performance achieved million euros. income product of this kind, exempting last year in the marketing and sale of them from capital gains tax. March all product lines, offering innovative Premium income in 2016 totalled Vida Riesgo Empleados and March solutions to Banca March’s customers. 467.7 million euros. The low interest Vida Riesgo Executive are both life-risk rate environment channelled client products; the first is designed for Group balances from time and sight deposits employees and the second for our into March Vida savings and annuity Corporate Banking clients. products. The star performers were unit-linked products, which generated This year also saw the launch of 219.0 million euros, and traditional life- MV Ahorro Plus 90 Aniversario, which saving products, with premiums of 144.8 commemorates the 90th anniversary million euros. Life annuities totalled of Banca March’s inception. Premium 60.5 million euros, and retirement income from this new product stood at saving products – insured pension plans 44.2 million euros. (PPA), individual systematic savings plans (PIAS) and long-term individual In 2016, Solvency II came into force. savings insurance plan (SIALP) – stood March Vida complies fully with the new at 38.0 million euros. Life-risk products regulatory requirements, maintaining an also grew versus previous years. adequate solvency position.
In 2016, the four products launched The results achieved in 2016 were highly in 2015 secured an even a stronger satisfactory. The total contribution to foothold: MV SIALP, MV Renta Banca March, defined as the fees paid Reinversión, MV Riesgo Empleados to Banca March by March Vida plus the and MV Riesgo Executive. March Vida pre-tax profit posted by March Vida,
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CONSULNOR hike in off-balance sheet AuM, and an BANCO INVERSIS A key landmark in 2016 was the increase in our client base in the Basque acquisition of 100% of the business Consulnor is an independent company Country, where there is a strong network Banco Inversis is specialised in high undertaken by the Spanish subsidiaries which was founded in 1972 and of family companies and substantial added-value solutions designed for other of RBC Investor & Treasury Services specialises in financial services for wealth generation. financial institutions and their business (RBC I&TS), which forms part of the private banking clients. Banca March’s in investments and financial assets. Royal Bank of Canada (RBC). This entry into Consulnor’s capital in 2012 The key business highlights in 2016 The range of services Banco Inversis deal afforded Inversis a strategic hike gave rise to a private banking sector were: offers includes trading and execution in market share. At year-end 2016, leader in its key region, boasting market- of orders, settlement of transactions - Business volume was up by over 12.5%, assets under custody stood at over leading services in the management of and custody of financial assets, an including the business generated 90 billion euros, up over 70% year on high net worth clients, market strategy integrated platform for the distribution for the bank by Consulnor clients, year, positioning Inversis as a leading and generation of innovative products, of investment of funds and more specific taking the total to almost 1.8 billion provider in its sector. On 13 July 2016, thanks to the combination of the two services such as acting as administrator euros. Key clients were up by 8.5%, Banca March increased its holding in companies’ workforces. and depositary for collective investment clearly evidencing the confidence Banco Inversis to 100%. schemes and pension plans. This activity Private Banking clients have in both Consulnor operates primarily in the is all underpinned by a cutting-edge The companies acquired (now called Consulnor and Banca March. Basque Country, and also has branches technology platform that was fully Bancoval Securities Services, S.A. and in La Rioja and Madrid. Under our - The average return on our designed in-house. Inversis’ technology Sigval Administración de Activos, S.A.) agreement, Consulnor Banca March clients’ portfolios was over 3.0%, allows it to provide account-level were included in the Inversis Group’s clients have access to a broad range of outperforming the returns offered services for the end customers of its scope of consolidation, which was financial services, backed and supported by traditional financial assets, institutional clients, allowing them to integrated in turn into the Banca March by the bank’s solvency. particularly bank deposits and the outsource activities and processes to Group, on 21 October 2016. Profit after tax for Banco Inversis (standalone) in Having integrated the assets managed by region’s stock markets (Ibex 35: -2%). Inversis that do not form part of their 2016 stood at 9.4 million euros, up Consulnor, Banca March has positioned business models and thereby enhance 48.0% on 2015. The net fees reported itself as a leader in the Spanish private their own efficiency. Inversis offers value- by the Inversis Group were up 14% banking segment, and is the third- added services, such as those performed versus 2015. largest Spanish financial institution by by its research and investment fund Assets under Management in SICAVs. selection team and the capital markets The agreement also led to an impressive desk, as well as customised technology solutions for institutional clients.
70 71 FINANCIALINFORME ECONÓMICO RESULTS Y FINANCIERO 03 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
Investment portfolio 74 Affiliated companies 75 Listed companies 75 ACS 75 Acerinox 76 Ebro Foods 77 Bolsas y Mercados Españoles 78 Viscofan 79 Indra 80 Euskaltel 81 Parques Reunidos 82 Clínica Baviera 83 Non-listed companies 84 Mecalux 84 Panasa 84 Flex 85 Siresa - EnCampus 85 In-Store Media 86 Terberg Ros Roca 86 Real estate activity 87
72 73 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
INVESTMENT AFFILIATED PORTFOLIO COMPANIES
LISTED COMPANIES CORPORACIÓN FINANCIERA ALBA ACS ACS is one of the world’s leading million. Stripping out the impact of specialists in construction, turnkey renewable energy asset sales, EBITDA projects and infrastructure concessions, was down by 4.1% and EBIT was up by DEYÁ ACS ACERINOX with a strong presence in Europe, the 1.7%. CAPITAL SCR 7.5%1 19.0% US, Australia, Asia and the Middle 100.0% East. Once again in 2016, it topped the Net profit for 2016 stood at 751 million global rankings compiled by a range euros, up 3.5% on 2015, thanks to the of international trade publications of capital gains generated through the the biggest international construction Urbaser sale and to the drop in minority contractors and the main transport interests, which offset the exceptional BOLSAS Y provisions undertaken in 2016 MERCADOS infrastructure concession developers. EBRO FOODS MECALUX ENCAMPUS stemming from Royal Decree 3/2016 ESPAÑOLES 10.0% 24.4% 32.7% on tax measures and the likely value 12.1% Year-on-year comparisons of ACS’s 2016 results are impacted by the sale impairment of certain financial assets. in the first quarter of 2015 of 75% of Saeta Yield and of the energy asset At year-end, Alba’s stake in ACS stood management company Bow Power. at 7.5%, following the sale of 4.2% of the company in 2016 for 375 million, IN-STORE These transactions have affected the VISCOFAN EUSKALTEL PANASA MEDIA comparative results of the Industrial generating consolidated gross capital 11.0% 11.0% 26.5% 18.9% Services area versus 2015. In addition, gains of 169 million euros. Over the Urbaser’s activity, as a result of its course of 2017, Alba sold its entire sale, was recognised as a discontinued position in the company. operation in the 2015 and 2016 income statements. CLÍNICA TRRG INDRA FLEX BAVIERA HOLDING LTD. In 2016, ACS’s consolidated revenues 3 11.3% 20.0% 19.7% 7.5% were 31,975 million euros, down 4.0% year on year. Revenues from the domestic business fell by 12.8% due to the weaker performance of the Construction and Industrial Services PARQUES areas; global revenues were down REUNIDOS 2.4%. International activity accounted 14.8%2 for 86.6% of total 2016 revenues and 89.9% of the portfolio at year-end.
EBITDA dropped 5.5% to 2,023 million euros as EBIT grew by 1.7% to 1,445 www.grupoacs.com
Figures as of 31 December 2016. 1. ACS: Alba divested its entire position over the course of 2017. 2. Parques Reunidos: In early 2017 Alba bought an additional 4.3%, raising its total stake to 14.8%. 3. Flex: On 28 March 2017, an agreement was reached to sell the entire position.
74 75 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
ACERINOX EBRO FOODS
Acerinox is one of the world’s leading This substantial upturn in the company’s The multinational food company the change to the scope of consolidation stainless steel manufacturers, with results came on the back of a significant Ebro Foods is the global rice sector and the sale of the rice business in an annual steel output capacity of 3.5 quarter-by-quarter improvement in leader and the world’s second largest Puerto Rico and a property in Madrid. million tonnes. performance, as commodity prices pasta manufacturer. It has a retail and stabilised thanks to the gradual recovery industrial presence through its extensive The company’s net financial debt The company has four flat product of conditions in the North American and network of subsidiaries and brands in increased by 4.0% in 2016 to 443 factories (Spain, the US, South Africa and European markets. over 25 countries in Europe, the US, Asia million euros due to the acquisitions of Malaysia), three long product factories and Africa. Celnat and Santa Rita Harinas. The net (two in Spain and one in the US) and At 31 December 2016, Acerinox had debt to EBITDA ratio therefore stood at an extensive commercial network, with equity of 2,169 million euros and net Ebro Foods’ revenues remained stable 1.29x, a comfortable level of debt which warehouses and service centres in 36 borrowing of 620 million, down 12.8% year on year in 2016 (-0.1%), standing was down slightly on the ratio for 2015 countries. Acerinox sells its products in on year-end 2015, thanks to enhanced at 2,459 million euros, due to the and will allow Ebro Foods to further its over 80 countries worldwide. cash generation levels versus the slight drop in commodity prices and growth strategy in terms of both regions previous year. despite the positive contribution to and products. In terms of output, 2016 was a strong its consolidated accounts of the 53 year for the Acerinox Group. All of the On the same date, Alba was still the million in revenues proceeding from the In 2016, Alba maintained its 10.0% stake Group’s plants reported increases in main shareholder in Acerinox, with acquisitions undertaken. in Ebro Foods’ capital, making it one of production versus 2015. 19.0% of its share capital. Over the past the company’s main shareholders. year, Alba pared back its holding slightly EBITDA increased 9.3% to 344 million As for its financial results, Acerinox’s due to the capital hike undertaken by euros, and EBIT rose 8.5% to 267 million revenues fell 6.0% in 2016 to 3,968 Acerinox, via which it issued new shares euros. The EBITDA margin rose to 14.0% million euros. This drop in revenues was to any shareholders that selected this from 12.8% in 2015 thanks to the gradual the result of the decreased average sale option as part of its flexible dividend improvement in gross margin and price per tonne of stainless steel due to programme. changes to the scope of consolidation. falling nickel prices, which offset the 9% This improved margin came despite increase in the number of tonnes sold. increased investment in advertising, Average stainless steel prices fell by particularly in the pasta business line. 18% in the US, 11% in Europe and 10% in Asia. Net profit was 170 million euros, up 17.2% on the figure for 2015 thanks to www.ebrofoods.es Even against this complex market the strong performance of the business, backdrop, EBITDA grew 15.0% to 329 million euros and EBIT rose 30.2% to 157 million. Net profit for 2016 stood at 80 million euros, up 87.3% year on year. www.acerinox.com
76 77 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
BOLSAS VISCOFAN Y MERCADOS ESPAÑOLES Viscofan is the world leader in artificial Net profit hit a new record high of 125 casings for meat products, and is the million euros, up 4.2% on the figure for only manufacturer that works with all 2015. This increase in net profit despite Bolsas y Mercados Españoles (BME) is EBITDA fell by 11.8% to 2016 million of the various types of casing: cellulose, the drop in EBIT was made possible the operator of all Spanish stock markets euros due to falling trading volumes and collagen, fibrous and plastic. It has a by lower financial expenses, positive and financial systems and the leading the non-recurring expenses stemming broad network of casing production exchange rate differences and a lower platform for transactions involving from the integration of Infobolsa. BME’s centres throughout Europe (Spain, tax bracket. shares of listed Spanish companies. efficiency ratio of 33.2% for 2016 is Germany, the Czech Republic and The company operates the stock 9 percentage points higher than the Serbia), North America (the US), Latin In 2016, Alba acquired an additional exchanges of Madrid, Barcelona, Bilbao sector average, positioning the company America (Brazil, Mexico and Uruguay) 4.2% stake in the company for 93 and Valencia. BME has been listed since substantially ahead of its peers in terms and Asia (China). It also has 14 sales million euros, raising its total position in July 2006 and is an international leader of management. offices located in a range of countries. Viscofan’s share capital to 11.0% at year- in its sector by solvency, efficiency and end. Alba is currently Viscofan’s largest profitability. Over the course of 2016, Alba increased Viscofan’s revenues were down 1.3% in shareholder. its position in BME’s share capital to 2016 to 731 million euros, due to the In 2016, BME reported net profit of 160 12.1%, buying an additional 1.5% of weakness of commercial currencies, the million euros, down 7.6% year on year the company for 35 million euros and decline in co-generation revenue and mainly as a result of the widespread shoring up its position as the company’s lower sales volumes in Brazil. drop in trading volumes. Almost all largest shareholder. the business areas directly linked to EBITDA fell by 4.6% in 2016 to 204 market activity saw a drop in revenues. million euros, with an EBITDA margin of BME’s total revenues were 327 million 27.9%, versus 28.9% in 2015. EBIT stood euros, down 6.1% on 2015, despite the at 154 million euros, down 4.0% year on strong performance of the Information year. This downturn was due to volume (+19.1%), IT & Consulting (+7.0%) and weakness in Latin America and lower co- Clearing (+33.9%) business areas. generation revenue, partially offset by the growth in the other reported areas www.bolsasymercados.es and contained operating expenses. www.viscofan.com
78 79 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
INDRA EUSKALTEL
Indra is Spain’s leading provider of year was 70 million euros, versus losses Euskaltel is a regional telecoms operator 49.0% in 2016, an improvement of 260 information technology and security of 641 million euros in 2015. As for which provides high-speed broadband, basis points versus 2015. and defence systems, and a key player in revenues, Indra reported total sales of digital pay TV and landline and mobile its sector in Europe and Latin America. 2,709 million euros in 2016, down 4.9% telephone services to households and Net profit grew from 7 million euros It offers high value-added solutions and year on year. businesses in the autonomous regions in 2015 to 62 million euros in 2016. services for the vertical transport and of the Basque Country and Galicia It is important to highlight that the defence markets (including both the EBIT was positive at 162 million euros, (through R Cable). It is one of the leading 2015 results included significant non- defence and security and transport and versus -642 million euros in 2015 as a operators in both regions, with shares of recurring costs linked to the IPO and the traffic sectors), and the IT market, which result of non-recurring costs recognised over 30% in various market segments. acquisition of R Cable, and the results of comprises the energy and industry, in the period. The EBIT margin was this company were only included in the financial services, public administrations 6.0%. This improved margin was thanks In 2016, Euskaltel obtained total scope of consolidation for one month. and healthcare, and telecoms and media to the increased profitability of ongoing revenues of 573 million euros, up 68.3% Alba is the company’s second largest sectors. projects underway, the efficiency plans on 2015, due mainly to the consolidation in place and the reduction in loss-making of R Cable for the full year. In like-for-like shareholder with 11.0% of the share Indra operates in over 140 countries and projects. terms, revenue for the period grew 1.3% capital as at 31 December 2016. Over had a workforce of almost 34,000 at the versus the previous year thanks to the the course of the year, Alba bought an end of 2016. The company’s international In 2016, Alba maintained its 11.3% stake positive performance of the residential additional 1.0% for 13 million euros. footprint has grown enormously in Indra’s capital, making it one of the segment. over recent years; in 2016, Indra’s company’s main shareholders. international business represented EBITDA, adjusted for non-recurring 57.0% of total revenues, with America expenses incurred through the representing an impressive 24.1% of the integration of Euskaltel and R Cable, total. In 2010, the international business amounted to 281 million euros, up accounted for just 38.7% of total sales. 68.0% year on year. In like-for-like terms, EBITDA was up 5.1% year on year, Following the series of non-recurring buoyed by increased revenues, falling write-downs and impairments in 2015, direct costs and the synergies obtained the company was able to post strong from the integration of R Cable. The results again in 2016. Net profit for the www.indracompany.com EBITDA margin was therefore up to www.euskaltel.com
80 81 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
PARQUES REUNIDOS CLÍNICA BAVIERA
Parques Reunidos is one of the three revenue was down by 1.2% to 584 Clínica Baviera is Spain’s leading provider EBITDA increased by 44.8% to 16 million leading leisure park operators in the million euros, which explains the 2.9% of eye care services for the correction euros, and the EBITDA margin grew from world, with a strong presence in Spain, drop in EBITDA for the period to 188 of problems such as myopia, hyperopia, 13.3% in 2015 to 18.0% in 2016. This across Europe and in the USA. With over million euros. International revenues in astigmatism, presbyopia and cataracts, enhanced profitability is in line with the 20 million visitors each year, Parques 2016 accounted for 76.2% of the total, and has a strong presence in Germany trend observed in 2015 and is explained Reunidos is the second-largest leisure with the US market generating 39.8%. and Italy. It is Europe’s largest eye care largely by the increase in refractive laser park operator in Europe and the eighth operator by both revenue and profit. eye surgery, which affords a larger gross globally, and is also the world’s leading Alba is the company’s second largest margin, and by the positive impact of water park operator. shareholder with 10.53% of the share At 31 December 2016, Clínica Baviera had the company’s operating leverage. The capital at 31 December 2016. Most 76 eye-care clinics and consultancies, EBITDA margin for the international The operating results of Parques of this stake was acquired through of which 52 are located in Spain, 20 in business registered outstanding growth, Reunidos for 2016 were affected by the company’s IPO on 29 April; the Germany and Austria and 4 in Italy. from 3.0% in 2015 to 15.4% in 2016. inclement weather conditions in the remainder was bought through the American Northeast in Q4 (from 30 market in the subsequent months. The The company’s total revenue grew EBIT increased by 78.2% to 12 million June to 30 September), which is the total investment stood at 127 million by 7.0% to 92 million euros thanks to euros and net profit attributable to the most important period of the year for euros. the strong performances of both the parent company climbed 64.2% to 8 the company. They were also weakened domestic business, with a 6.5% increase million euros. by the losses posted the Marineland In early 2017, Alba bought an additional in revenue to 68 million euros, and the park in France’s Côte d’Azur, due to 4.30% for 49 million euros, increasing international business, which grew 8.6% In 2016, Alba maintained its 20.0% severe damage caused by a storm at its position to the current 14.8%. to 24 million euros on the strength of stake in Clínica Baviera’s share capital, the beginning of the fiscal year and the the German market. This impressive making it one of the company’s largest terrorist attack in Nice in July. The impact performance by the international shareholders. of these effects were partially offset by business explains the drop in the the strong results obtained in Spain and weighting of Spanish sales to 74.0% of other European markets. the total.
The total number of visitors fell by 1.8% in 2016 to 19.8 million, and consolidated www.parquesreunidos.com www.clinicabaviera.com
82 83 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
NON-LISTED COMPANIES MECALUX PANASA FLEX SIRESA ENCAMPUS
Mecalux is one of the world’s leading Panasa (Panaderías Navarras) was Flex is one of Europe’s leading bed EnCampus buys, develops and manages companies in the storage systems founded in 1968 and is one of Spain’s and mattress companies, with a strong university residences, and its goal is to market. It designs, manufactures, sells leading manufacturers of fresh and international footprint. Founded in 1912, create the largest portfolio of university and provides services related to metal frozen bread, pastries and cakes, with an it manufactures and sells mattresses, student residences in Spain. shelving, automatic warehousing and unparalleled position in its sector. pillows, adjustable beds and other other warehousing solutions, and boasts accessories. In late 2012, EnCampus bought a sector-leading, cutting-edge technology. Through Berlys, it sells its products to stake in Siresa, a Spanish sector leader over 24,000 clients including bakeries, Thanks to its strong brand portfolio, with over 6,700 beds in 25 halls of It has a broad international presence; hotels, restaurants, major retail outlets including Flex, Vi-Spring, Kluft, Mash residence in Spain’s main cities. To over 80% of its activity is generated and other food shops, thanks to an and Molaflex, among others, it is the date, EnCampus has built a portfolio of outside Spain, with sales in around extensive distribution network spanning top sleep equipment manufacturer in projects comprising 1,500 beds through 70 countries. It has factories in Spain, the length and breadth of Spain. It also Spain, Portugal and the United Kingdom the acquisition and development of Poland, the US, Mexico, Brazil and has over 200 exclusive bakeries located (luxury segment), and is extremely well new student residences in Madrid (3), Argentina, and an extensive sales and in mainly in the north of the country, positioned in the US, Chile, Brazil and Barcelona (2), Tarragona (1) and Valencia distribution network, affording it a through which it distributes fresh and Cuba. More than 75% of the Group’s (1). leadership position in the European, frozen products. activity is international business. It has NAFTA and Mercosur shelving markets. production plants in Spain, Portugal, the On 31 December 2016, Alba’s stake in On 31 December 2016, Alba’s stake in UK, the US, Brazil, Chile and Cuba. EnCampus, held through Deyá Capital, At 31 December 2016, Alba had a 24.4% Panasa, held through Deyá Capital, was was 32.7%. stake in Mecalux, 8.8% directly and 26.5%. On 31 December 2016, Alba had a 19.7% 15.6% through Deyá Capital. stake in Flex, held through Deyá Capital. On 28 March 2017, a deal was reached to sell the entire position in Flex for 59.2 million euros, generating gross capital gains of 40.7 million euros. www.berlys.es
www.resa.es
www.mecalux.es
www.flex.es
84 85 HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
IN-STORE TERBERG REAL ESTATE MEDIA ROS ROCA ACTIVITY
In-Store Media was created in 1998 and Founded in 1953, Ros Roca specialises At the end of 2016, Alba owned lettable Gross yield based on the valuation as at is now a global leader in the operation of in the manufacture of urban waste area totalling 97,800 sqm and 1,500 year-end was 5.0%. in-store advertising platforms, providing collection vehicles and environmental garage spaces, mainly in office buildings services to advertisers and reaching equipment. It manufactures and sells in Madrid (78,000 sqm) and Barcelona In the first quarter of 2017, Alba sold exclusive agreements with retailers. vehicles for urban refuse collection (18,000 sqm). four floors of office space and seventy and street cleaning (waste compactor parking spaces in the building located The company has an extensive global trucks, street cleaning machinery and The book value of the properties is at Miguel Ángel, 23, in Madrid. The footprint, with over 65% of its activity sewer cleaning equipment). updated annually based on a valuation sale price stood at 24.5 million euros generated outside Spain, in Portugal, undertaken by an independent expert, (equivalent to €5,833 per above-grade Mexico, Argentina, Chile, France and In the first quarter of 2016, Ros Roca which at 31 December 2016 valued the sqm) and generated capital gains of 3.1 Poland, and boasts leadership positions Environment and the Dutch company assets at 371.6 million euros, up 19.4 million euros. in all its markets in terms of technology, Terberg Environmental successfully million euros year on year. This total innovation and revenues. merged, giving rise to TRRG Holding valuation exceeds the net investment In April 2017, the sale of another office Limited. Terberg Environmental is the value by 128.9 million euros. building in Madrid netted Alba 13.3 On 31 December 2016, Alba had an environmental subsidiary of the Dutch million euros, with capital gains of 2.4 18.9% stake in In-Store Media, held family-owned conglomerate Terberg. Rental income from the properties million. through Deyá Capital. The two companies’ products and stood at 18.6 million euros in 2016. markets provide for excellent synergies Direct expenses from the company’s and the merger has created a sector property management activity totalled leader in urban waste management and 5.0 million euros. the production of collection equipment, special vehicle chassis and loading systems, with manufacturing centres in www.in-storemedia.com the UK, Spain, the Netherlands, Germany and France.
On 31 December 2016, Alba had a 7.5% stake in TRRG, held through Deyá Capital.
www.rosrocaenvironment.com
86 87 Published by: Banca March Communications and Institutional Relations Department Avda. Alexandre Rosselló, 8 07002 Palma de Mallorca Tel. (+34) 971 779 127 E-mail: [email protected]
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D.L.: DL-PM-928-2010
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