1946 - 2016

years full hist ory...This year we are celebrating our seventieth birthday. This event allows me to look back and acknowledge that without our team, without all the people we have trained and who form part of the Arteche Group, our history would not have been so long.

It is what that synthesizes our motto Moving Together, which refers to our history, our shared past and our future together.

Over these years, we have been confronted with numerous challenges, great diffi culties, which we have gradually overcome with much eff ort and dedication. We continue to move forward.

The great technical and human skills of our team have made this possible. Today, thanks to them, we are a small multinational with presence in more than 150 countries.

Thanks to all those who have been and are part of the Arteche Group, we are now in excellent conditions to face the immediate future with high levels of competitiveness, and respond to the challenges that continue to arise along the way.

Over these 70 years we have changed, moved with the times, adapting ourselves and adapting our solutions to what the industry and society has demanded. We will continue to do so.

It is a great source of satisfaction to have reached 70 years thanks to the work of so many people, of all those who are behind our successes. It is with great honor and pride. I visualize the future with enthusiasm and confi dence; a confi dence based on the professionalism, eff ort and excellence provided by the Arteche Group.

JOSE JAVIER ARTECHECHAIRMAN

Sample of the fi rst pamphlets and of the current web of the Arteche Group.

The company Electrotécnica Arteche Humanos, S.A. was founded in December 1946, after the end of the Second World War and in a country ravaged by its own civil war.

During its fi rst years, it manufactured and marketed instrument transformers from Balteau, small electric switchgear and X-ray machines.

But it soon left aside the latter activity to focus on a single sector, the electric sector.

Nine years earlier, in 1937, Aurelio de Arteche escaped from Gernika, bombed during the Civil War, and went into exile in Belgium. There he was hired as a laboratory worker by Usines Balteau, a family company dedicated to the manufacture of transformers and electrical material.

After becoming best friends with one of its directors, Aurelio went through all the sections of the plant, learning about the products and how to manufacture them.

That was when the idea of what would then be the Arteche Group sprung up.

1946 - 1974The birth

of Arteche

Mr. Aurelio de Arteche, founder of the company

The fi rst factory was located in the Billela district in Mungia. Operational until a fi re in 1968, it was the fi rst industry installed in the valley.

First workforce of Arteche in the 1950s.

Inside view of the workshop and the laboratory of the Billela factory in its early years.

1946 - 19742

years

With the outbreak of the Second World War, Aurelio left Belgium and settled in Venezuela, where he spent the next seven years, which allowed him to know other facets of the electricity market, new markets, products, technologies, and of course, contacts that then became of vital importance when it came to setting up the factory in Mungia.

When the war ended, Aurelio returned to Bilbao and, in the same year of his return, with the help of friends and family, Arteche was born.

The fi rst years of activity were hard and extremely complicated.

The Spanish market, isolated and isolationist because of the dictatorship, had been decimated by the wars, and there were big restrictions and quotas that forced Arteche, among other things, to resort to smuggling for getting, via Saint-Jean-de-Luz and Bermeo, many of the materials it used to manufacture its instrument transformers.

But despite all these diffi culties, 10 years later, in the early 1960's, it had already become an industry benchmark in Spain.

One of the fi rst shares issued in 1947.

HV transformer model. 1960’s.

First generation of protection relays.

1970’s.

1946 - 1974 3

years

At that time, Arteche decided to embark on the manufacture of a new product: auxiliary relays.

Thus, in 1961, it reached an agreement with the French company ICE-Paris, to manufacture and market its relays under license.

The agreements with Balteau and ICE-Paris gave Arteche important technological and fi nancial security, which was covered by larger companies, but that had little prospect for growth, since that implied confi nement in the Spanish market.

A situation which confl icted with the will to grow and innovate with which Arteche was set up.

With the aim of overcoming this barrier, Ikaslan was set up in 1969, Arteche's fi rst attempt to create from scratch new relays, this time of the Arteche brand, to replace the French technology. This was the fi rst step toward the company’s technological independence.

Ikaslan an internal research unit which lasted until 1981, developed Arteche's relay range and it embarked on developing a complex systems engineering project in the Agiñur project. It was Arteche’s fi rst step to opening itself up to the world.

During the twelve years, it remained active, Ikaslan evolved from technological dependence to independence, from acquiring technology to its internal generation, from electromechanics to systems engineering. It promoted the role of technology as a source of competitive edge both in cost and in diff erentiation.

In 1971, Arteche’s relationship with ICE-Paris ended, and in 1973 it terminated in turn the contract with Usines Balteau.

For the fi rst time, after almost thirty years of activity in which it grew and matured, Arteche now only depended on itself.

1973 was decisive in the Arteche's track record when its technological independence (in the photo in the middle, signing of the agreement), the fi rst export and the opening of the factory located in its current location in the Zabalondo district of Mungia coincided.

Board of Directors of Arteche outside the relay building (1968). Sitting, Mr. Aurelio de Arteche (second from right). Standing, his children Unai (fi rst from left) and Lander (second from left), the second generation of the family at the helm of the company.

1946 - 19744

years

1974 - 1995Arteche opens up to the worldAchieving full technological independence, means tackling the enormous task of renewing the entire catalog of products, which no longer relies on third parties.

The goal was to develop new designs… New technologies that diff erentiate its products from those of Balteau and ICE-Paris, in order to be open to the world and become a reference in the international market.

But the way to achieve this was not easy.

Renewing all the products involved a titanic eff ort for the entire Arteche team that, in parallel, was attempting to open new markets that until then had been vetoed, adapting, moreover, all products to new regulations and requirements.

The job was enormous but by the end of 1977 most of the products off ered by Arteche were the result of new redesigns and developments.

The following year, Arteche set up for the fi rst time outside of Spain, in Venezuela.

For seven years, during the Second World War, Aurelio Arteche was exiled in Caracas, a city where his two children were born and where he settled on the idea that would be the Arteche Group. This was where his international and innovative vocation arose.

Left: R&D Design Centre, structured around an independent business unit called IKASLAN (in Basque:

learning group).

Right: Stand in CITA 87.

JOSÉ LUIS BASALDÚAInternational Business Manager(1978 - 2004)

“One of Arteche's great achievements has been to overcome the barriers that existed and that still exist”

The early years of Arteche’s exports were very important.Fundamental. These fi ve or ten fi rst years of exports accounted for a huge eff ort from everyone. There were no contacts, we didn’t know anybody... But we sold to Sweden, we got into America, we fought in Italy, Germany... In Germany, we competed with a big German manufacturer, in Switzerland with a Swiss one, in France with a French one like Alstom… It was hard, but after 10 years in Sweden we were selling more than ABB, the local manufacturer. These successes were the result of our perseverance, of all of us. Of hard work and dedication.

And now, from the outside, do you perceive the results of your eff orts?Well then, for example… I travelled to China a lot. They invited us to dinner and the cultural diff erences complicated the relationship. We were not accustomed to their food, nor to their manners. We said "no, we don’t have partial discharges”, and we did not know if they were listening to us, or even if they could understand us. It was all a bit weird, informal, but now look, there is a factory there. This is the result of a lot, I mean a lot, of people.

And how do you value it now?Very positively. …One of Arteche's great achievements has been to overcome the barriers that existed and that still exist. It is where it is and as it is, being a family company, working with local suppliers… It is the work of many people. We were a small group, more of a gang than colleagues. Arteche was always like a rowing boat, all rowing in the same direction.

1974 - 1995 5

years

...Arteche, over the years

The bond established between Arteche and Venezuela was of the utmost importance, both commercially and personally speaking.

At the end of the seventies, the Venezuelan market was already very important as the country had big growth rates and the need for renewal of its energy networks. As such, it monopolized most of the fi rst exports and was very optimistic about development.

Despite not having local industrial partners nor too many fi nancial resources for the project, in 1979 Arteche opened a factory in the town of Barquisimeto. A production center conceived from its foundations, in the same way as the new commercial networks it had to set up.

Its implementation, as well as the introduction of production and operating models adopted in Mungia, involved numerous trips, many long stay, of Zabalondo managers and workers to the Caribbean country.

Despite the crisis in Venezuela during the fi rst half of the 1980's, the project progressed.

This fi rst deployment abroad was supplemented, in 1993, by the acquisition of the Mexican company Transformadores y Tecnología.

TyT had been created by former managers of Balteau in Mexico, one of whom was Gotzon of Anúzita, its General Manager and a second cousin of the Arteche family. The company at that time was not at its best.

During a business mission of the Basque Government, the General Manager of TyT passed on the idea to Arteche’s management of an off er of sale, to renew its technology as a strategy to resolve some of the problems of his company.

After two years of refl ection and negotiation, Arteche purchased TyT and set foot in a large market: North America.

CACEI plant in Venezuela, built from scratch. It has been the only experience that, in these circumstances,

Arteche has undertaken. Subsequent deployments have been carried out from agreements or acquisitions of

already constituted companies.

Inside of the TyT plant in Mexico. For a time, it continued to produce the articles of the earlier brand.

1976 - 1994

1995 - 2011

1946 - 1953

1954 -1975

2012

1974 - 19956

years

1995 - 2016Arteche becomes an

international referenceBy 1995 close to half of Arteche’s sales occur outside of Spain, and the trend continues to be upward for the following years, with the company becoming a global benchmark in the electrical sector.

What began as a modest venture, manufacturing products under license for a dictatorial market that imposed signifi cant restrictions, has evolved.

Arteche reached the end of the century with a mature and highly valued product, with a strong presence both in America and Europe and competing, one-to-one, with large multinational corporations.

The prospects were so good that it received some purchase off ers that were rejected. Arteche has grown and evolved, and wants to continue to do so in spite of the obstacles that arise.

Not only has Arteche evolved, the world has done also. The new century brought new needs in the sector, new concerns and, also new ways of facing the challenges. Arteche, as always, needed to adapt to the constant changes.

During these years Arteche has become established around the world, setting up in Argentina and Brazil, with new companies in Mexico and embarking on the conquest of the Far East. With the agreement reached in China to open its factory it now reached one of the largest producers of electrical equipment, and with its implantation in Australia the fourth continent in its expansion.

Arteche thus joined the concerns of the new times, in an era where Smart technologies predominate, adding to its catalog of equipment for automation of distribution and of substations, quality of the energy and solutions for smart networks, and control, metering, and protection equipment.

Arteche wanted to continue expanding, to continue growing. It attempted to do so through a close collaboration with all the agents that converge in our activity (clients, suppliers, and workers).

With its new international dimension, Arteche needed to adapt. It therefore adopted a new internal organization, focusing its activity in several specialized business units, to remain a lean and accessible organization. With experience, but also, with a vocation for innovation.

It currently has productive enterprises in 4 continents. From top to bottom: outside of the plant in China, inside of the plant in Brazil and the

"white room" for the manufacture of gas-insulatedtransformers in Vitoria-Gasteiz.

1995 - 2016 7

years

In 2012, Arteche opened the largest Ultra-High Voltage Laboratory in Spain, one of the largest in Europe. A cube almost 30 meters’ high that allows electrical tests up to 1200 kV and with capacity to generate lightning type electrical impulses of up to 4,800 kV.

In essence, a Faraday cage with a polished metal facade that looks like it is vibrating along its perimeter, making the building disappear into its setting, equipment designed for future levels of voltage, higher than those currently used.

Arteche faces the future open to innovation, a constant throughout its 70 years of history, striving to provide equipment and solutions with a high technological component that respond to the needs its clients, who have evolved and will continue to do so over the years.

It is the 2,000 people who work in the company who, with their training and motivation, are going to determine Arteche’s capacity for facing the challenges that lie ahead.

The ultra-high voltage laboratory located in Mungia has been an essential strategic investment to be able to meet the needs of the large transmission lines of the future.

...until our 7575 THTH ann iversary

+51995 - 20168

years