Letter from the President
Confidence in our project
In these times of huge transformations in the world economy, companies must position themselves, and this is exactly what Mecalux is doing. Our Group is becoming stronger all the time motivated by its vocation to continue its international expansion and technological innovation, two pillars which guarantee the company’s pole position in the world market.
International action
In the context of the lethargy which took hold of the world economy in 2008, the performance of our company can be considered to be stable. In this sense, we have detected a certain weakness in the markets of Southern Europe (Spain, France, Italy and Portugal), although our participation in these areas continued to gain ground in comparison with our competitors. The value contributed by our automated warehouse division, which is attracting more and more clients and making great strides, makes us optimistic in this sense.
A clearer trend is the growth in Central and Eastern Europe, where invoicing rose by 30%. In contrast, the NAFTA area saw a fall of around 3% due to the current negative trends in the economy. This market now represents 14% of the Group’s sales, although we forecast that in the short term the figure will rise to 50% thanks to new takeovers.
In the same line, we can also consider very positively the progress of sales in South America, which saw a rise of 53%. One of the markets which most contributed to this advance was Brazil, where turnover soared by 71% in local currency. In Argentina, where the Mecalux Group continues to lead the market, turnover rose by 57%.
Investment in products
As far as investments in research and development are concerned, in 2008 Mecalux launched one of its most important products, of which we are particularly proud: the Mecalux Easy®. This new warehouse management software can be very easily installed in almost all companies irrespective of their size, sector and characteristics. Mecalux Easy® is produced in our Technological Centre in Gijón. Its six customised levels enable it to be implemented in warehouses with different levels of automation and needs, thus improving performance and facilitating stock management. Developed entirely by Mecalux, the product has been designed in line with the objective which has always guided our work: to improve warehouse management. The launch of Mecalux Easy® as the standard software package for the sector is being carried out simultaneously in the 14 countries in which our Group has a direct commercial presence.
Another of our products which has been recently launched on the market is the new vertical storage system, the Clasimat. Its totally automated and computerised operation prevents needless movements around the warehouse and maximises storage capacity by using the height of the warehouse to the full.
In 2008, Mecalux also continued to modernise its line of automated warehouse equipment with the presentation of a new range of conveyors and stacker cranes for boxes and pallets. The heart of all these developments is our Technological Centre in Barcelona.
Investments were made in 2008 to a tune of 26 million euros which were distributed across our different production centres. Particularly worth mentioning is our factory in Gijón, where we have doubled the surface area to 52,856 m2, with the purchase of two high-performance paint lines (cataphoresis and water-soluble), a new cutting line and a profiling machine which will strengthen our whole range of uprights for large clad-rack buildings.
For its part, Logismarket, our industrial Internet portal, has totally renovated its design at the same time as continuing its policy of international expansion. In 2008, the portal disembarked in Latin America, where new websites were launched in Mexico, Argentina and Brazil, which will be added to the 12 already running in Europe. The number of clients continues to rise markedly, reaching more than 4,000 by the end of the financial year.
During 2008, Mecalux carried out an increase in share capital subscribed entirely by Caja Madrid, which took up 20% of shareholdings, thus endowing the company with a rise in equity of 168 million euros. Thanks to this capital increase, the number of shares rose from 26,885,200 to 33,607,750, representing a growth of 6.7 million. These financial movements have afforded Caja Madrid with two seats on the board of directors of the company. Also worth highlighting was the purchase of 5% of shareholdings by Cartera Industrial Rea for which it was also awarded a seat on the company’s board. 2008 also saw an increase in share capital via a bonus issue of 3,360,765 shares, which are to be distributed in 2009.
This increase in equity will enable the company to take advantage of the investment opportunities which appear on the market. One of the most important actions taken in this line in 2008 was the signing of an agreement for the purchase of most of the assets of the US company, Interlake, which will be formalised in March 2009. The operation involves the integration of four new production plants for Mecalux, along with the sales network and intellectual property rights of one of the leading storage companies in the United States. The aim of this key project is to extend our presence in North America, a market where we will be strategically poised for when the first symptoms of recovery are noted in the world economy.
Positive balance
Mecalux continued to grow in 2008 by 6%, and managed to increase profits by 2%, backed by annual sales of 636 million euros. The solid financial state of the company should be noted. Equity rose from 222 to 388 million euros, representing a growth of 75%. In the same manner, net debt fell, dropping from 169 million in 2007 to 27 million euros at the end of the financial year, while EBITDA stood at 0.3%. This enviable set of figures places us in a privileged position for future development and competitiveness in the context of the delicate world economic situation.
All of these achievements are particularly worthy of merit given the current financial climate, as is the ability of our company to continue setting itself new challenges. Because of this, the management of Mecalux would like to truly thank all those involved in our project: our professionals who have strived so hard to create this great organization, our clients who trust in us day after day, and our partners and shareholders who have led the group to the enviable situation it enjoys in the market today.
I would also like to put myself personally at your disposal through my email address presidencia@mecalux.com
From here at Mecalux, I wish to express my most sincere thanks for all your support for our project.
José Luis Carrillo
President