MONDRAGON cooperatives in industrial sector create 1.000 jobs in 2014

In 2014, MONDRAGON had encouraging results. The Corporation kept the level of employment rates, with 74,117 workers in the cooperatives (0.1% more than the previous year). The cooperatives in the industrial sector performed particularly well, with 957 more jobs than the year before (657 in the domestic market and 300 abroad).

Throughout the year, emphasis was laid on the management of solutions for the members affected by the crisis at Fagor Electrodomésticos. To date, about 1700 of them retired, chose early retirement or were transferred to other cooperatives.

Taken together, the companies and cooperatives in the MONDRAGON Corporation totalled sales for €10,985 million (1.4% less than the year before). Overall investment was €345 million. As to EBITDA, it amounted to €1168 million, that is, 10.6% of sales.

These figures, plus the positive indicators in the first half of 2015, are really encouraging, especially as a result of internationalisation and innovation in various areas of activity.

Industrial strength

After the results submitted for Retail and Distribution, Finance, and Knowledge, the industrial sector released its balance too. In 2014, the MONDRAGON cooperatives in the industrial sector, with 31,736 workers, had a total turnover of €4754 million and profits for €191 million (80% more than the year before). Investment amounted to €247 million.

Commitment to internationalisation resulted in foreign sales accounting for 71% of total sales. The industrial cooperatives had new premises set up in such markets as China, India, USA, Mexico and Brazil, having 125 production subsidiaries abroad (3 more than the year before).

On the other hand, the domestic market began to recover: for the first time in a few years, sales picked up vis-à-vis the previous year (+1.7%), totalling €1400 million.

MONDRAGON’s bid for innovation showed clearly in the area of Knowledge, where R&D investment amounted to €145 million (8.93% of added value and 3.07% of total sales). The 15 organisations in this area have 1700 employees. Likewise, the sale of new products and services totalled €620 million, accounting for 13% of total sales.

Interestingly enough, MONDRAGON holds a high number of patent families: 479, equivalent to 25% of all the patents granted in the Basque Country. Moreover, the Corporation is participating in more than 30 European R&D cooperation projects and is a leading partner in the Spanish Technological Platform for Advanced Manufacturing, MANU-KET, integrating next-gen technology into advanced manufacturing: advanced materials, biotechnology, photonics, microelectronics and nanotechnology.

Retail and Distribution continued to be the area with the highest employment potential, giving 38,686 jobs. Last year, this sector’s sales totalled €6231 million (1.9% less than the previous year). With a €80 million investment – mostly fuelled into an automated logistics platform for Eroski – the sector had losses for €280 million (€256 million in facilities). A key issue in 2014 was the bank debt restructuring of Eroski, which has resulted in a broader financial horizon for the company to focus on business plan development. Meanwhile, the retail group was granted the Basque Retail Award 2014 for innovation, in recognition of the ‘Eroski With You’ (Contigo) store model, offering more personalised customer service, fresh, in-season local produce, healthy foods, and innovative saving schemes.

Finally, the financial area had a positive performance in terms of solvency ratio, liquidity and delinquency in payment of dues. Profits in this sector amounted to €109.2 million, going considerably up by 26.4%. What is more, with €175 million in premiums, its growth rate was higher than average for the insurance sector. Likewise, by the end of 2014, the Lagun-Aro, EPSV equity fund totalled €5566 million (+6.93% over the previous year).

Future prospects

Javier Sotil, Chairman of the MONDRAGON General Council, sent out a message of hope for the future. ‘We can rely on management and innovation capabilities to promote competitive business, joint commitment and inter-cooperative solidarity,’ he remarked.

Describing 2014 as a ‘turning point on the path to economic recovery at the Basque, Spanish and European levels,’ Mr Sotil believes the Corporation will be able to keep the job creation pace it set for itself in the past financial year.