Annual Report 2004
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2004 Annual The FCC Group • Areas of activity • Social report Corporate governance • Financial Statements Report Annual Report S.A. FOMENTO DE CONSTRUCCIONES Y CONTRATAS, 2004 MUSAC. Museo de Arte Contemporáneo de Castilla y León www.fcc.es On cover, close-up of the facade Contents Letter from the Chairman 2 Letter from the Managing Director 4 Governing Bodies 7 Strategy 9 The FCC Group in Figures: Consolidated Figures 11 The FCC Group’s areas of activity 19 Services 21 Construction 41 Cement 71 Real estate 75 Other sectors 81 Social report 83 Corporate governance 97 Financial Statements, Management reports and Auditor’s report 147 Executive personnel 263 Letter from the Chairman Letter from the Chairman Letter from Dear shareholders, The Notes to the Financial Statements and the All of these rules, regulations and committees Annual Report presented here, like a shop window have been notified to the National Securities on the company which displays our best work Market Commission and are available to the public and our published annual accounts, is also a clear on the company’s website. indicator of the progress made by FCC in recent years. FCC's accounts have also been adapted to comply with the International Financial Reporting While employees have worked to ensure the Standards and we have noted that their impact continuous improvement of the company’s on the Group’s financial statements had little financial statements and balance sheet every year, relevance, and consequently will not have any the company has implemented some profound repercussion on our dividend policy. A report changes to its corporate governance structure on the impact of this adaptation was submitted and internal code of conduct to make FCC a to the CNMV and can be consulted on the CNMV more modern, efficient and transparent company. or FCC website. With these decisions, we have also brought the company into compliance with the new corporate In short, our company is up to date, which is governance regulations established by the a magnificent reality and ideal foundation upon competent authorities. which to continue building our future. It is an exciting task to which more than 67,000 people For the second year in a row we have prepared devote themselves every day, highly motivated the Annual Corporate Governance Report which by and identified with the objectives set by the is published along with the Notes to the main shareholders. I would like to express my Financial Statements and the Annual Report. most sincere gratitude to them for their dedication. The Regulations of the Board of Directors and the General Meeting of Shareholders have been updated and we have also created an Audit and Control Committee and an Appointments Marcelino Oreja Aguirre and Remunerations Committee which report to Chairman the Board of Directors, along with the Strategy Committee set up in 2005. 3 Dear shareholders, After a long career spent almost entirely at FCC, I am proud to write my first letter to Letter from you to present these Notes to the Financial Statements and Annual Report, especially since the Managing these documents unequivocally show that the 2004 fiscal year has been fully satisfactory for Director the FCC Group, with considerable progress in all of our economic variables which will enable us to face the future with optimism, which is also the fruit of the Group’s sound shareholder stability. The consolidated turnover was 6,286 million euros, which represents a 3.9% increase. If we consider that sales in 1998 were 3,303 million euros, the average annual increase rate for the period is 11.3%. This increase in sales was achieved almost exclusively through the organic growth of the Group’s strategic areas: services, construction and cement. With regard to the geographical breakdown, domestic sales in Spain rose by 4.3%, while international sales were down, accounting for only 10.2% of turnover when the year before they had accounted for 10.5%. This decline is due, in a large extent, to the depreciation of the dollar with respect to the euro. 4 As a result of the Group's efforts to win new figure over the next three years to between contracts, at the end of the year the construction 10,000 and 12,000 million euros, and to bring and services backlog reached a record amount the gross operating profits (Ebitda) to a total of 16,405 million euros, or 6.2% higher than the of 1,400 to 1,600 million euros. year before. All without significantly impairing the company’s Letter from the Managing Director Letter from The net profit attributable to the parent company financial capacity, which will continue to maintain grew by 25.8% to 388 million euros. This increase one of the sector's lowest leveraging rates. represents an improvement of more than one point of net margin on sales, which was The achievements attained to date and the goals 6.2%, clearly demonstrating the level of efficiency we have set for the future would not be possible achieved by the company. If we compare 2004 without the active commitment of all FCC profits with those recorded in 1998, we see that employees, who are 63,000 strong at this time. they are seven times higher. Employee training is one of the highest priorities the Group’s executives are entrusted with pursuing. Given these excellent results, the Board of Directors will submit to the General Meeting of Shareholders This training is intended to provide employees for its approval a proposal to pay a dividend of with new knowledge and skills, adapt and update 1.36 euros per share, 27.5% higher than the year the skills they already possess and increase job before. In 1998, a dividend of 0.17 euros per safety. During the last fiscal year there were share was paid, which means that over the last 3,313 training activities which were attended by seven years the dividend has increased eightfold. 37,387 employees for a total of 492,230 instructional hours. The dividend for fiscal year 2004 represents a yield of close to 4%, one of the highest percentages among I would like to thank all of the Group’s employees Spanish publicly-traded companies.This high rate from here for their collaboration as well as was achieved despite the fact that over the last two the shareholders for placing their trust in me. years the quoted price of FCC shares has increased by 65.6%. With the increase in company share value, there Rafael Montes Sánchez has accordingly been an increase in capitalisation, Managing Director which has gone up from 2,426 million euros at the close of fiscal year 2002 to 4,626 million at the close of 2004, a 90% increase. Furthermore, in the last few months of 2005 FCC shares have continued to hit historical highs in a clear show of the market’s confidence in our company. This fiscal year marks the end of a cycle in the company’s long history in which the company’s growth has basically been organic. A new period is beginning in which we intend to make a qualitative and quantitative leap, backed by the necessary financial resources and management staff. The goal is to duplicate the turnover 5 Governing Bodies Governing Bodies Board of Directors Marcelino Oreja Aguirre Chairman Nominee Director Rafael Montes Sánchez Managing Director Francisco Mas Sardá Independent Director Executive Director Casanelles B 1998, S.L. Representative: Robert Peugeot Nominee Director Esther Koplowitz Romero Cartera Deva, S.A. Representative: de Juseu José Aguinaga Cárdenas Nominee Director Nominee Director Dominum Desga, S.A. Representative: Ibersuizas Alfa, S.L. Representative: Esther Alcocer Koplowitz Luis Chicharro Ortega Nominee Director Nominee Director Dominum Dirección Representative: Ibersuizas Holdings, S.L. Representative: y Gestión, S.A. Alicia Alcocer Koplowitz Pedro Agustín Nominee Director del Castillo Machado EAC Inversiones Representative: Nominee Director Corporativas, S.L. Carmen Alcocer Koplowitz Larranza XXI, S.L. Representative: Nominee Director Lourdes Martínez Zabala Fernando Falcó y Nominee Director Nominee Director Fernández de Córdova Antonio Pérez Colmenero Corporate Human Gonzalo Anes y Álvarez Independent Director Resources Manager de Castrillón Executive Director Juan Castells Masana Nominee Director Francisco Vicent Chuliá Secretary (non-member) Felipe Bernabé García Pérez General Secretary Executive Director Executive Committee Chairman Rafael Montes Sánchez Members Dominum Desga, S.A. represented by Esther Alcocer Koplowitz Fernando Falcó y Fernández de Córdova Cartera Deva, S.A. represented by José Aguinaga Cárdenas Juan Castells Masana Secretary (non-member) José Eugenio Trueba Gutiérrez 7 Audit and Control Committee Chairman Francisco Mas Sardá Casanelles Members Fernando Falcó y Fernández de Córdova Juan Castells Masana Pedro Agustín del Castillo Machado, on behalf of Ibersuizas Holdings, S.L. Secretary (non-member) José María Verdú Ramos Appointments and Retributions Committee Members Esther Alcocer Koplowitz, of Dominum Desga, S.A. Fernando Falcó y Fernández de Córdova Rafael Montes Sánchez José Aguinaga Cárdenas, on behalf of Cartera Deva, S.A. Robert Peugeot Strategy Committee Members Esther Koplowitz Romero de Juseu, on behalf of B 1998, S.L. Esther Alcocer Koplowitz, on behalf of Dominum Desga, S.A. Fernando Falcó y Fernández de Córdova José Aguinaga Cárdenas, on behalf of Cartera Deva, S.A. Luis Chicharro Ortega, on behalf of Ibersuizas Alfa, S.L. Pedro Agustín del Castillo Machado, on behalf of Ibersuizas Holdings, S.L. Lourdes Martínez Zabala on behalf of Larranza XXI, S.L. Robert Peugeot Steering Committee Chairman Rafael Montes Sánchez Members Fernando Falcó y Fernández de Córdova Ignacio Bayón Mariné Felipe Bernabé García Pérez (Secretary) José Luis de la Torre Sánchez Antonio Gómez Ciria José Ignacio Martínez-Ynzenga José Mayor Oreja Antonio Pérez Colmenero José Eugenio Trueba Gutiérrez José Luis Vasco Hernando 8 Strategy Strategy Founded in 1900, the FCC Group has been, practically since its origins, more than a construction company.