ANUAL
REPORT
2018

Mondragon

WE ARE MONDRAGON

Cooperation and shared progress The focus on people is one of the values of MONDRAGON, people who come together to achieve extraordinary feats and grow together.

We are committed to sustainable development Of our businesses, our society and our planet.

We have our own model Different, inclusive, responsible, fair and solidary: cooperative.

And we look towards the future Proactively, exploring new opportunities that take our experience to the next level.

Humanity at work.

OBJECTIVE:
SUSTAINABLE
BUSINESSES

“Our industry has generated over 8,000 jobs in the last five years, of which 57% (4,589) were created locally. This is, without a doubt, the best contribution that cooperatives can make to society”.

Iñigo Ucin

A MESSAGE FROM THE CHAIR

The year 2018 has been, in general terms, a good year for the member cooperatives of MONDRAGON. An overview of the main figures of the year leads to the conclusion that the outcomes of the year have been positive: last year’s sales have been improved, we have created jobs and we have increased the sustainability of the businesses.

One of the most noteworthy aspects has been industrial employment, whose upward trend confirms, once more, the capacity to create new jobs in this field. Our industry has generated over 8,000 jobs in the last five years, of which 57% (4,589) were created locally. This is, without a doubt, the best contribution that cooperatives can make to society.

Moreover, industrial investment is progressing steadily; over 1,400 million Euros have been invested during the last five years. The main purpose of these investments have been new implementations -we already have 141 subsidiaries abroad with a workforce of over 14,400 people- and improvement of facilities, without mentioning the development of new products and services.

Despite the adverse conditions for the industry, the financial area has experienced positive growth once again, with remarkable solvency and default ratios. The uncertainty of the financial market resulted in a brief slump in the investment portfolio of LagunAro at the close of the year, but this scenario subsided during the first months of the current year.

In the retail area, our businesses ended the year with overall positive results - for the second consecutive year in the case of the Eroski Group. Worthy of mention is the new boost to the transformation of Eroski’s "Contigo" commercial network plan that is being applied to new stores.

Another significant aspect the enhancement of inter-cooperation to share experiences and projects and improve the competitiveness of the cooperatives, while promoting financial inter-cooperation funding.

And lastly, in order to improve the future sustainability of businesses, an extra effort has been made during the year to strengthen the permanent resources of the cooperatives. The concept behind these actions is quite simple: only sustainable and competitive business are going to yield better cooperatives for us and a better legacy for future generations

IÑIGO UCIN PRESIDENT Iñigo Ucin

BASIC
FIGURES

In € million

Business development

2017
2018
Variation (%)
Total Income
11.936
12.215
2,3
Total sales (Industry and Distribution)
11.280
11.581
2,7
Net investments
451
420
-6,9
Ebitba
1.021
1.037
1,6
LABORAL Kutxa Intermediate Resources
21.014
21.841
3,9
LagunAro equity fund
6.477
6.169
-4,8

Employment

2017
2018
Variation (%)
Average No. of jobs
80.818
81.837
1,3
% of shareholders in Industrial Area cooperative workforce
73,8
73,6
-0,4
% of female shareholders in the cooperative workforce
42,9
42,8
-0,2
Rate of Industrial Area incidents or accidents
34,4
34,7
0,9

Participation

2017
2018
Variation (%)
Working shareholders, share capital
1.733
1.795
3,6
Number of workers in governing bodies
825
835
1,2

Solidarity

2017
2018
Variation (%)
Funds for activities with a social content
25,1
28,0
11,6
No. of students in educational centres
11.010
11.248
2.2

Environmental management

2017
2018
Variation (%)
No. of ISO 14000 certifications in force
73
75
2,7
Number of eco-design certifications
4
4
0,0

Investment in the future

2017
2018
Variation (%)
% funds allocated to R&D from the added value of the Industrial Area
8,6
8,9
3,5
No. of Technology Centres and R&D units
15
15
0,0
Total No. of researchers
1.928
2018
4,7
Finanzas
Finanzas

FINANCE

THE 2018 FISCAL YEAR HAS ENDED WITHOUT AN UPTURN IN THE INTEREST RATES IN THE EUROZONE, WHICH HAS SEVERELY CONDITIONED INCOME STATEMENTS AND, THEREFORE, THE PROFITABILTIY OF FINANCIAL INDUSTRIES.

IN THIS CONTEXT, LABORAL KUTXA HAS CLOSED THE YEAR WITH AN INCREASE IN ITS MAIN RATIOS, WHILE LAGUNARO EPSV IS STILL FAR ABOVE THE MINIMUM MANDATORY SOLVENCY MARGINS, DESPITE THE NEGATIVE EVOLUTION OF THE STOCK MARKET INDICES.

laboral
kutxa

LABORAL Kutxa has obtained a consolidated profit of 133.7 million euros after taxes, a 10.06% increase from 2017. It has maintained its comfortable liquidity and solvency position and has improved its profitability (7.9%) and default ratio (4.51%).

LABORAL KUTXA
133,7 M€

The insurance business in 2018 brought in ordinary global pre-tax results of €38.94 million, which accounts for an increase of 3.92 % over the previous year.

SEGUROS LAGUN ARO
38,9 M€

laboral
kutxa
IN FIGURES

INTERMEDIATED
RESOURCES

21.841 M€

CUSTOMER
DEPOSITS

19.481 M€

SOLVENCY

18,76%

LIQUIDITY

73,75%

PROFITABILITY

7,9%

DEFAULT
RATE

4,51%

Number of
customers

1.147.805

NETWORK
OF OFFICES

309

EMPLOYEES

1.928

MALE

981

FEMALE

947

LagunAro
Epsv.

The year 2018 ended with a total of 28,401 active members, distributed among 123 Cooperatives, for a net increase of 415 compared to the end of 2017.

The group of Pensioners and Beneficiaries, in their different modalities (Retirement, Widowhood, and Permanent Incapacity), amounts to 14,022, with a net increase of 516 persons in the year.

EQUITY FUND

6.169 M€

ACTIVE POLICYHOLDERS

28.401

Industria
Industria

INDUSTRY

THE POSITIVE TREND OF THE LAST FEW YEARS IN THE INDUSTRIAL AREA CONTINUES, WITH AN INCREASE IN SALES (6.8%) AND JOB GENERATION (1,702 JOBS).

industrial employment

Sales:

Sales of the industrial Area of MONDRAGON amounted to 5,922 million euros in 2018, an increase of 6.8% over the previous year.

Ventas

5.922 M€ TOTAL SALES

International Sales:

These amounted to 4,041 million euros, with a 4.9% increase from 2017, that is, 68% of total sales.

Ventas internacionales

4.041 M€ INTERNATIONAL
SALES

Investments:

Mainly oriented to the start-up of new production plants and to improving the efficiency of the processes to gain competitiveness, these totalled €304 million.

inversiones

304 M€ INVESTMENTS

Profitability:

Net income last year was 230 million Euros, in line with the one achieved the previous year.

rentabilidad

230 M€ net income of the
previous fiscal year

EMPLOYMENT

The industrial divisions already employ 38,722 people, of which more than 14,400 work in production sites of the cooperatives in other countries. In 2018, average jobs increased by 1.702, of which 772 were local and the remainder generated in other countries.

empleo 1,702

NEW JOBS

INNOVATION

The Corporation has 2,018 people exclusively dedicated to R&D. Expenditure reached 175 million Euros, with 656 million Euros in new product sales (11% over the total sales of the area).

innovacion 2,018

PEOPLE ENGAGED IN R&D

distribucion
distribucion

DISTRIBUTION

AT THE CLOSE OF 2018, TOTAL SALES OF THE RETAIL DIVISION, COMPRISED BY THE EROSKI GROUP AND ERKOP, A SECOND-DEGREE COOPERATIVE CONSISTING OF FIVE COOPERATIVES IN THE AGROFOOD INDUSTRY WAS 5,969 MILLION EUROS, WITH A TOTAL WORKFORCE OF 39,723 PEOPLE.

39,723 PEOPLE
EMPLOYED

Eroski

INTERNATIONAL

It achieved sales of €5,393 million, 2% less than the previous year, a reduction due to the sale of some of its shopping centres.

EMPLOYMENT

A workforce of

30,903 people,

plus 3,300 employees in its franchise network.

RENEWAL OF THE NETWORK

In 2018, 42 stores were converted to the new model, with noticeable improvements in commercial activity and appeal. There are already 670 new-generation “Contigo” stores. Its commercial network comprises 1,652 stores.

PROFITABILITY

Its profit amounted to 1.6 million euros. However, operational profit increased once more in 2018, for the eighth consecutive year, to 163.6 million euros, a 19.1% increase from the previous fiscal year.

Card holders
EROSKI Club, CAPRABO
and FORUM SPORT.

+6,000,000
CLIENT MEMBERS.

Erkop

All of Erkop’s agrofood cooperatives obtained positive results in 2018 once again. Their sales were 266 million Euros and their workforce now totals 8,820 people. One of the most notable milestones was the first international implementation of Ausolan, specifically in Chile.

SALES

266
M€

EMPLOYMENT

8,820
PEOPLE

conocimiento
conocimiento

KNOWLEDGE

NEW BOOST TO INNOVATION TO IMPROVE THE COMPETITIVENESS AND TRANSFORMATION OF MONDRAGON’S BUSINESS FABRIC.

THE PRIORITY AREAS HAVE BEEN, ONCE AGAIN: ADVANCED MANUFACTURING, SMART CITIES, HEALTHCARE, BIG DATA, AND RAW MATERIALS.

Impulso a la innovación
OBSERVATORIO INDUSTRY 4.0

INDUSTRY 4.0 OBSERVATORY

Valuable fields for cooperatives have been prioritised: IT Security, IIoT Platforms, Servitisation, Human-Machine Interface, Traceability, Additive Manufacturing, Maintenance Program Optimisation, etc.

I+D+I INTERNACIONAL

INTERNATIONAL R&D

Participation in strategic international forums through its Corporate Office in Brussels. There are more than 50 MONDRAGON projects approved and financed by the European Commission.

MONDRAGON UNIBERTSITATEA

MONDRAGON UNIVERSITY

Its four schools (Engineering, Humanities, Business Studies, and Gastronomic Sciences) offer 15 degrees and 16 Master’s degree programs.

PARQUE TECNOLÓGICO GARAIA

GARAIA TECHNOLOGY PARK

The University encompasses 46 companies with a combined invoicing volume of 169 million euros and 1,424 people, of which 674 work in R&D.

FIGURES
R &D

175 m€ Total expenditure in R&D.

656 m€ Million euros in new products and services.

496 Patent families in effect.

2.018 full time researchers.

15 R&D centres

Cikatek

CS Centro Stirling

Edertek

ETIC

Fagor Aotek

IK4-Ideko

IK4-Ikerlan

IK4-Lortek

Isea

Koniker

Leartiker

MTC

MIK

Orona EIC

UPTC

equipo

General
Council

President:

Iñigo Ucin

Vice-Presidents:

Txomin García. Finance Division

Agustín Markaide. Retail Division

Iñaki Gabilondo. ULMA Group

Xabier Mutuberria. Elevator Division

Javier Oleaga. Components Division

Juan Mª Palencia. CHP Automotive Division

Pello Rodriguez. Machine Tool Division

Belén Kortabarria. Financial Management Director

Zigor Ezpeleta. Social Management Director

Amets Ugalde. Secretary

permanent
commission

President:

Javier Goienetxea. Retail

Vicepresident:

Lorea Barrutia. Components

Secretary:

Amets Ugalde. Corporate Centre

Members:

Aitor Aspe. CHP Automotive

Aitor Irure. Industrial Automation

Aitor Lejarzegi. Engineering and Services

Ander Bilbao. Tools and Systems

César Arriola. Machine Tools

Gotzon Juaristi. CM Automotive

Iker Estensoro. Components

Javier Amezaga. Retail

José Antonio Alustiza. Finance

Juantxo Martínez. CHP Automotive

Xabier Egibar. Finance

Lander Diaz de Gereñu. ULMA Group

Leire Mugerza. Retail

Mariasun Sarrionandia. Knowledge

Jone Urzelai. Construction

Mikel Larrea. Retail

Oier Lizarazu. Lifts

Raúl García. ULMA Group

Ruben Gabilondo. Equipment

Reconstituir
y renovar
todos los días

“La cooperativa hay que estar reconstituyéndola y renovándola todos los días”.

Arizmendiarrieta

MONDRAGON

We are inspired by nature...

...THE FOUNDATION OF OUR COMMITMENT. THAT IS WHY WE TAKE CARE OF OUR PLANET. AND THAT IS WHY WE MANAGE DIVERSITY WITH OUR OWN COOPERATIVE MODEL, TO FOSTER RESPECTFUL DEVELOPMENT AND SHARED PROGRESS. THEREFORE, WE ENRICH ALL OUR PROJECTS SO THEY CAN GROW HEALTHY AND FLOURISH.

“Look deep into nature and then you will
understand everything better”

Albert Einstein