Special issue: Large companies

Installment payment of Corporation Tax In 2014, total installment payment of corporation tax increased 6.9% over 2013, to 17,425 million euros.

Installment payment by the large companies and consolidated groups totaled 15,905 million euros in 2014, some 8.3%

more than in 2013 and double the figure of 2011 (7,626 million).

The increase in taxes on the part of the large companies can be explained by the drop in deductions, the increase in payment by installment, and the benefits of the economic recovery.

Sales According to the Tax Agency, sales by the large companies (more than 250 employees and billings of more than 50 million euros) increased in the first two months of 2015 by a cumulative 5.2%: 4.6% interanual in January and 5.7% in February.

Inside Spain, these sales increased 6% in February (5.8% on average in the two months) and overseas by 4.8% (an average of 3.1%).

In the first two months of 2015 there was an increase in sales for consumption and investment:

• Sales destined for consumption grew 4.9%, following the 2.7% average increase in the fourth quarter of 2014.

• Those directed to investment in hardware and software increased 4.5%, (2.5 more points than in the previous quarter).

By sectors, the recovery also reached construction and real estate, which in February showed an annual positive increase of 6.7%, with an average of 2.1% in the first two months of the year.

Ibex 35: overseas sales The companies traded on the Ibex 35 index, with combined billings in 2014 of 432,031 million euros (0.4% less than in 2013), obtained 61.5% of their sales overseas, as against 59.9% in 2013 and 39.8% in 2004 (National Securities Market Commission, or CNMV in Spanish). Half of these companies receive more than 60% of their sales from overseas, and for

one in every four the figure was 80% or higher (Abengoa, ACS, Amadeus, Santander, Gamesa, Grifols, IAG, Inditex and Técnicas Reunidas).

Income from overseas (265,000 million euros) increased by 2.3% with respect to 2013, and has tripled since 2004, when it reached 84,241 million euros. For its part, income generated in Spain in 2014 (166,432

Large 91.3%

SMEs; 9.2%

Installment payments of Corporation Tax% of total and variation 2014/2013

Source: AEAT

Payments in millions of euros- Total = 17,425- Large companies = 15,905- SMEs = 1,595

∆ 7.4% over 2013

∆ 8.3% over 2013

7,626

11,636

14,69215,905

2011 2012 2013 2014

Installment payments of Corporation Tax. Large companiesTotal tax revenues in millions of euros

Source: AEAT

Así está…

April 2015

The company

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million euros) dropped by 4.4% on an annual basis.

These figures reflect the importance of the internationalization process for the large

publicly traded companies in recent years. The recent weakness of the domestic market has led them to diversify their markets and acquire new companies overseas.

Financing Large companies in need of financing have sought it more in the capital market than in the banking system. Nevertheless, in recent months this trend has changed. According to the Bank of Spain, between December and February (and except for January) the

financial institutions have increased their new loans of more than 1 million euros. In February these loans totaled 14,510 million euros. Thus in December, the balance increased by almost 10%, and in February by 0.59%.

Stock exchange listing Last April 8, the total market value of the 35 Ibex companies reached an historic record of 653,956 million euros, surpassing the 650,541 million of November 8, 2007. Since the start of the year, the value has increased 16%, and with regard to the summer of 2012 –when the euro crisis had driven it below 300,000 million euros– it has doubled.

In comparative terms:

Tracking bankruptcies In the first quarter of 2015 there were 1,344 bankruptcies, almost 30% fewer than in the first quarter of 2014 (1,916), thus confirming the slowdown that has been maintained since the fourth quarter of 2013.

By Autonomous Communities, 50% of these bankruptcies were in Madrid (178), Barcelona (280) and Valencia (218).

By sectors, 61% of the total bankruptcies were in construction, services and the real estate sector.

By company size:

• 70% of the companies declaring bankruptcy have assets of less than 2 million euros. In addition, the average value of these companies has dropped

from 5.7 million euros in the first quarter of 2014 to 4 million euros in the first quarter of 2015, which indicates that the trend to insolvency is concentrated in the smaller companies.

• 79% of the companies affected have fewer than 50 employees.

Capitalization of stock indexes

nº companies Country Value

(bn €)Dow Jones 30 USA 4.95CAC 40 France 1.36Dax 30 Germany 1.18SMI 20 Switzerland 1.1Ibex 35 Spain 0.65MIB 40 Italy 0.48

Source: Bloomberg

Up to 5079%

From 51 to 2504%

More than 250

17%

Bankrupt companies ranked by number of employees, 1Q 2015% of total

Source: pwc

‘Así está…The company’, a publication of the Círculo de Empresarios produced by its Department of the Economy, contains in-formation and opinion from reliable sources. However the Círculo de Empresarios does not guarantee its accuracy and does not take responsibility for any errors or omissions. This document is merely informative. As a result, the Círculo de Empresarios is not responsible for any uses that may be made of the publication. The opinions and estimates of the Department can be modified with-out any warning.

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