Factoring opportunities in Spain, an analysis of companies in the IBEX 35

Factoring opportunities in Spain:
an analysis of companies in the
IBEX 35
Bachelor Paper II
Submitted by: Nina Schmiedt
Matriculation No.: 1210633877
at: Bachelor Program
Business Consultancy
International
International Accounting and
Finance
Supervisor: Dr. Kinga Niemczak
Wiener Neustadt, 07.05.2015

II
TABLE OF CONTENTS
1) INTRODUCTION 1
2) FACTORING AND REVERSE FACTORING 2
FACTORING - DEFINITION AND DESCRIPTION 2
FACTORING – HISTORY AND MARKET 6
DIFFERENT METHODS AND TYPES OF FACTORING 7
REVERSE FACTORING – DEFINITION AND DESCRIPTION 11
CASH GAP 13
3) SPANISH MARKET 15
ANALYSIS AND ECONOMIC SITUATION 15
DEVELOPMENT AND USE OF FACTORING 16
4) EMPIRICAL ANALYSIS 19
EMPIRICAL ANALYSIS I: TOP COMPANIES OF IBEX 35 19
4.1.1. FACTORING 19
4.1.2. REVERSE FACTORING 21
EMPIRICAL ANALYSIS II: CASH GAP IN TOP 15 COMPANIES OF IBEX 35 23
4.2.1. CALCULATION OF CASH GAP 23
4.2.2. INTERPRETATION OF RESULTS 24
5) SUMMARY OF FINDINGS 25
FACTORING AND REVERSE FACTORING 25
CASH GAP 26
6) CONCLUSION 27
7) LIST OF ABBREVIATIONS 29
8) LIST OF FIGURES 30
9) LIST OF TABLES 31
10) BIBLIOGRAPHY 32
APPENDIX 32

1
1) Introduction
The number of companies struggling with managing their working capital
efficiently and improving their liquidity appears to be growing significantly. Factoring,
or Structured Receivables Finance, is becoming increasingly important as a financing
method, especially for large companies. Not only does this method provide cash
almost at the time the invoices are written, it can also save costs (i.e. part of, or the
entire work of the accounts receivable department can be outsourced to a factoring
bank.). Factoring can be best described as the process of a bank purchasing accounts
receivable from a supplier or exporter. Despite its complexity being much larger than
assumed at first glance, it represents a growing market and its importance is bound to
increase in the future.
Spain is one of the most important markets for factoring at the moment.
Reverse factoring or Supply Chain Finance was actually developed right there (BCR
Factorscan, 2012b,1). Therefore, this paper will take Spain as the basis for a case
study of factoring.
This paper aims to answer the central research question: Is factoring used in
Spanish companies, and does it help reduce the cash gap and improve liquidity?
It starts by providing definitions of different methods of factoring and reverse
factoring, including variations and combinations of such methods. It continues with a
short analysis of the Spanish market with regard to factoring. This includes an outlook
at the economic situation, as well as recent trends of factoring as a financing method.
Finally, the paper analyzes 15 of the top corporations of the IBEX 35.
The empirical analysis is based on data taken from Annual Reports between 2011 and
2013 of the selected companies. It also calculates the cash gap for these companies
to assess if a relationship between the usage of factoring and the length of the cash
gap exists.
In addition to the financial statements of the IBEX companies, information was
gathered by screening various journal, newspaper, and web-based articles about the
selected companies. Internal data (presentations, white papers, etc.) made available
by UniCredit Bank Austria, as well as database searches were used to validate data
and verify information.
There were two major challenges to overcome: The lack of information about
the actual volume of factoring and the problem, that some annual reports were only
available in Spanish language. In addition, these reports did not meet international
standards. These factors made research and detail gathering more time consuming
and complicated.

2
2) Factoring and Reverse Factoring
This chapter provides an overview of factoring, reverse factoring, and different
methods or mixtures thereof.
Factoring - Definition and Description
According to Austrian private law, factoring is defined as the purchase of
receivables from the delivery of goods/or services, with the passing of the default risk
excluding the risk of non-payment, the credit insurance and the collection of
receivables (Pericha and Arzt, 2011,2).
Austrian law distinguishes two terms for the purchase of receivables:
 Factoring: a broader term, meaning the purchase of current and future
accounts receivables. In that case, the bank also takes over part of the
accounting for the firm. Factoring triggers a stamp charge for assignment
(Zessionsgebühr) for the bank (Pericha and Arzt, 2011,2).
 Purchase of accounts receivable: a narrower term, meaning the purchase of
specific current invoices/receivables. This does not trigger stamp charge for
assignment (Zessionsgebühr) (Pericha and Arzt, 2011, 1). Therefore, purchase
of receivables is defined to have a shorter duration than factoring (Pericha and
Arzt, 2011, 8)
Onyeagoro (2013, 2) uses a slightly different description:
 Factoring: means the outright purchase of receivables. The factor (usually a
bank) collects the invoices and the risk of default is passed on to the factor.
 Purchase of accounts receivable: basically a loan secured by a company's
accounts receivable as collateral, with the risk of default staying with the
seller.
The structured purchase of receivables is also known as financing of payment
terms granted by suppliers to their domestic and foreign buyers. Such receivables are
purchased under predefined conditions. (UniCredit Bank Austria, 2015a, 1-3)
While this may sound like a very easy process, there are many steps involved before
any deal can be made. The major steps of the process are listed below.
 the credit standing of both buyer and supplier needs to be checked and verified,
 validity of invoices, and
 current delivery status of goods (UniCredit Bank Austria, 2015a, 1-3)

3
Factoring can be summarized in 5 steps:
1) Perform a service to the customer
2) Send the invoice to a factor
3) Receive cash in advance on the invoice
4) Factor collects payment from the customer
5) Receive the rest of the amount of the invoice minus the fees (RTS Financial,
2015, 2)
There are different structures of factoring, often custom-made to fit the need of
the client. An example of such a structure is shown in Figure 1:
Figure 1: Factoring deal - structure (UniCredit Bank Austria, 2015a)
Factoring describes the process of suppliers selling receivables to banks or
factor companies (so-called factors) in exchange for immediate payment. The
difference to borrowing is that the receivables are sold, and not pledged – meaning no
liability remains on the balance sheet of the supplier. Suppliers can sell invoices from
one buyer or a whole portfolio. These buyer portfolios have to be checked for
creditworthiness and closely analyzed by the factor, which now carries the risk of
buyer default (Seifert and Seifert, 2009, 1).
Factoring is often confused with receiving a loan. Some of the differences
between factoring and a bank loan include the following (Figure 2):
Factoring Bank loan
The volume that can be financed
increases as receivables increase
Usually comes with a cap or a
limitation of some kind
No debt is created Principal and interest has to be paid
Can be conducted regardless of credit
history; buyer’s credit score is more
important
Company’s financials, assets, liabilities,
credit history are closely reviewed
Usually takes less than five days Takes between one and two months
1) Offer for
factoring
2) Cash advance
3) Remaining
invoice paid
out at
maturity

4
Funding within 24 hours Once loan is approved, immediate
access to funds is granted
Minimal paperwork and documentation Extensive paperwork, financials,
personal information required
Sometimes collections of accounts
receivables and additional back-office
services are provided
Accounts receivable or additional back-
office services are not provided
Possibility of adjustment of rates with
increasing volume
Annual rate locked in
Sometimes credit reports and other
information on existing and potential
customers is provided
Credit services are not provided
Figure 2: Differences between factoring and a bank loan (RTS Financial, 2015,4)
Industries suffering from extensive cash gaps and thus using factoring
increasingly are as follows:
 IT services
 Staffing
 Manufacturing
 Wholesale Distribution
 Textiles and Apparel
 Court Reporting
 Furniture
 Printing
 Transportation
 Import/Export
 Food and Beverage (Commercial Finance Group, 2007,1)
On the contrary, factoring is more difficult to conduct in the consumer, retail,
and construction industries (Leach and Melicher, 2015, 490).
Factoring is not the cheapest source of finance. Accounts receivable are
purchased at a discount, and certain fees are charged (Onyeagoro, 2013, 2).
These fees differ depending on the factoring company. Some charge an overall fee
determined by the factoring volume by month and the creditworthiness of the
customer. Some have additional charges for money transfers, shipping, collateral and
other costs. It is very important to know which fees are charged prior to entering into
a factoring contract (RTS Financial, 2015,4).
Factoring should be used when:
 the gross margin on the sale is greater than the cost of financing; then money
saved on trade discounts and a reduction of administrative and collection costs
offset the factoring costs
 accepting and keeping a new business (with the help of factoring) increases the
bottom line (Prairie Business Credit, 2009,1).

5
Usually 70-90% of the face value of the receivables is advanced to the supplier.
After payment is received from the buyer, the factor pays out the balance, minus the
fees. Fees are based on the collection period and creditworthiness of the buyer and
usually range between 1.5 – 5.5% of the total value (Onyeagoro, 2013, 2).
Factoring is most frequently used by growing or surviving companies. Due to high
fees, companies with a profit margin of less than 25% should think twice about using
factoring (McGuire, 2005, 1). It is also not very profitable for companies with a high
volume of small-denominated invoices (WSJ, 2015, 1).
The awareness that factoring may damage a company’s relationship to their buyers is
also important. Often factor companies are too strict in collecting accounts receivable
since they are not interested in preserving customer relationships (Magos, 2014,1).
Any business conducting disclosed factoring has to consider that it gives an
impression of having financial problems, since many companies turn to factoring as a
last resort (Hill, 2007-2008, 3). In any case, factoring is often used only for short-
term financing due to the costs (Leach and Melicher, 2015, 491).
Factoring has many advantages, as well. Following are some major advantages
for sellers:
 receive cash within 24 hours  solves short-term cash issues
 collections of accounts receivable and evaluation of credit and payment history
of debtor are handled by factor
 possibility to find customized solutions to provide capital when need arises
 it is off-balance sheet (no liability shows up)
 based on debtor's credit, not the seller's
 can provide line of credit based on sales, not the seller's net worth (RTS
Financial, 2015, 2)
 provides assurance of payment (CIT Factoring University, 2015, 1)
 shortens cash-conversion cycle, releases cash  possibility to take on new
orders
 possibility to extend longer credit periods to customers  increase sales, ROE,
ROA (Cravenho, 2013, 2)
 by having more cash on hand to pay off bills and loans, a company's credit
status can be improved and the financial situation strengthened
 by paying early, sellers can also receive a discount from their suppliers
 overhead can be greatly reduced and more time can be spent managing the
business
 it is flexible, sellers can decide which and how many invoices to factor, there
are no long-term contracts to sign (CSF Solutions, 2015, 3-4)
 international business can be made easier, if a factor with international
experience is consulted (WSJ, 2015, 1).

6
Factoring – History and market
Modern factoring originated in the 15th century, during the era of Joan of Arc,
the beginnings of the Ottoman Empire, the War of Roses and Columbus’ discovery of
America (Magos, 2014,1). It became a part of business in England in the 1400s, and
the Pilgrims brought it to America in 1620 (RTS Financial, 2015, 3). Over the years,
however, factoring developed slightly differently in Europe, England and America
(Magos, 2014,1).
Historically, Factoring was used in the textile and garment industry out of need for
raw materials (McGuire, 2005, 1). Back then it was a controversial source of financing
as a result of its connection to fragile companies in the garment industry (WSJ, 2015,
1).
Factoring is larger in more developed economies with greater growth and developed
credit information bureaus. In 2004, the total worldwide volume of factoring was more
than US $ 860 billion, which represents a 88% growth since 2004 (Klapper, n.d.,1).
Nowadays, factors are mostly specializing in certain industries such as trucking,
construction or health care (WSJ, 2015, 1).
The need for factoring arises out of the length of the collection period. This
refers to the time that passes from the time a sale is made on credit, which creates a
receivable, until it is converted into cash (collected). The faster this accounts
receivable cycle is completed, the less time cash or capital is tied up and the better it
is for a company’s cash flow.
The Average Collection Period ratio and the Accounts Receivable Turnover ratio helps
to assess the average collection period/the accounts receivable days outstanding (Hill,
2007-2008, 1).
There are more than 3,000 factoring companies in 70 different countries around
the world. The turnover of businesses using factoring services exceeded € 1,648
billion in 2011, 246 billion of which came from cross border transactions (FIMBank,
2014, 1). Some of the biggest and highest-ranked factoring companies include
Charter Capital, New Century Financial and American Receivable (Top Ten Reviews,
2015,1).
Most of the major factors are members of the Asset Based Financing Association
(ABFA), also known as FDA. Financing to approximately 49,000 businesses is
provided, mainly in the manufacturing, distribution, transport and service sectors.
Over £191 billion invoices of clients are processed each year (Accounts Payable Team
Ltd, 2006-2014, 1).
Other associations are Factors Chain International (FCI) and International Factors
Group (IFG) (FIMBank, 2014, 1).
The factoring and commercial financing industry continued growing and reached
its record of €1.26 trillion in 2013 across the EU (EUF, 2015a,1). Nowadays, it is even
possible to buy receivables at an auction at an online marketplace (Leach and
Melicher, 2015, 491). The five countries with the highest factoring volume are the UK,
Italy, France, Germany and Spain (see Figure 3).
In 2013, the factoring industry represented 9.6% of EU GDP (EUF, 2015b,1).

7
Figure 3: Factoring volume in the EU by country, 2013 (EU National Associations, IFG and FCI statistics in
EUF, 2015b,1)
Different methods and types of factoring
There are different ways to structure the purchase of receivables. It can be with
or without recourse to the seller, one-off (a one-time purchase,) or on a revolving
basis. In this section, different methods, as well as combinations of such methods are
analyzed, described, and evaluated.
Purchase and payment
There are several different variations of how a factoring deal can be structured.
1) 100% : 100% : The bank buys the accounts receivable at 100% and pays
them out at 100%. This represents an advantage for the seller, who gets the
complete amount of the invoice earlier. For example, with accounts receivable
of € 1,000, € 1,000 are purchased and paid out.
2) 100%: x% : The bank buys the accounts receivable at 100%, but only pays
out for example 80%. This combination occurs frequently with insured
purchases of accounts receivable. The advantage is that the bank can keep
the remaining 20% as collateral, and only pay it out at maturity when they
receive the money from the buyer. With accounts receivable of € 1,000,
€ 1,000 are purchased but only € 800 are paid out.
3) 100%: x/y% : The bank buys the accounts receivable at 100%, and then
pays out for example 80% without recourse (this represents the insured
part), and pays out the remaining 20% with recourse to the seller, meaning
the seller is liable in case the buyer defaults. So using the previous example,
United Kingdom,
24%
Italy, 14%
France, 16%Germany, 14%
Spain, 9%
Other EU
countries, 29%

8
€1,000 are purchased, €800 are paid out without recourse and €200 with
recourse.
4) x% : 100%: For example, the bank buys the accounts receivable at 80%
and pays out 100% of the purchased amount. For accounts receivable of €
1,000, this would mean that €800 are purchased and paid out (Mayer, 2014,
1).
In all cases, the fees charged are interest (either discounted or current) and a
factoring (management) fee that differs from one customer to the other (UniCredit
Bank Austria, 2015a, 1).
Interest calculation and charge
There are two main ways how interest is charged:
1) Discounted interest: The Accounts Receivable are discounted at a
calculated discount rate (reinvestment rate + margin), and are paid out to the seller.
There are two methods of calculation:
a) discount-to-yield (Mayer, 2014, 1):
I. compounded
where:
NPV = net present value
FV = face value
rm = adjusted discount rate
m = days in a discounting period (monthly = 30, quarterly = 90,
semi-annually = 180, annually = 360/365)
n = interest bearing days from discounting date to maturity date +
grace days + adjustment days
p = discounting periods
(Strahlhofer, n.d., 1)
Formula:

9
II. simple
where:
FV = face value
r =
discount
rate
D =
days of the year, determined by the daycount convention (360
or 365)
b) straight discount (Mayer, 2014,1):
where:
FV = face value
r = discount rate
D =
days of the year, determined by the daycount convention (360
or 365)
2) Current interest: Accounts Receivable are purchased by the bank at
nominal value. Interest is charged from the seller quarterly or monthly in arrears
based on outstanding amounts (Mayer, 2014, 1).
Type of factoring deals
1) Undisclosed: The debtor is not notified of the sale of receivables.
However, in case of bankruptcy or insolvency of the company, the bank is legally
allowed to disclose the factoring deal.
Formula:
Formula:

10
2) Disclosed: The debtor is notified before the contract is made. He has the
obligation to accredit the offer for the purchase of receivables, before they are
offered for factoring to the bank.
3) Covered: The debtor is covered by an insurance company. This limits the
default and credit risk for the bank.
4) Uncovered: The bank takes on the full credit and default risk of the buyer,
who is not covered by any insurance company (Mayer, 2014, 1).
With or without recourse
1) With recourse: In case of default of the buyer, the seller is liable for any open
Accounts Receivable. The bank can withdraw the money from the bank account
of the seller.
2) Without recourse: Credit risk/Default risk of the buyer are transferred to the
bank. The seller is not liable for any non-payment on the buyer’s side (Mayer,
2014, 2).
One-off or revolving purchase
1) One-off purchase: Only one invoice or one package of invoices with a certain
maturity are purchased, either with a final maturity or with redemption. It is
usually paid out in a discounted form.
2) Revolving purchase: Certain invoices or packages of invoices are purchased
regularly according to a legally predefined structure. This can happen, weekly,
monthly, quarterly etc (Mayer, 2014, 2).

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Reverse Factoring – Definition and Description
Reverse factoring is very similar to factoring, with the difference that the buyer
approaches the bank which then buys the seller’s invoices. It is currently traded via a
platform, where the buyer can upload the invoices (UniCredit Bank Austria, 2015b, 1-
3).
Reverse factoring or Supply Chain Finance (SCF) is similar to factoring, with the
major differences being as follows:
 Lower fees can be charged since it is initiated by the buyer who uses his good
credit rating for his suppliers.
 Factors carry less risk and therefore can charge lower interest rates because
their clients (the buyers) are usually investment grade companies.
 Funds can be released earlier since buyers participate actively in the transaction
and therefore better information is available (Seifert and Seifert, 2009, 2).
The process is slightly more complicated than factoring, and typically involves
seven steps:
1) Buyer sends purchase order to supplier and notifies bank
2) Supplier delivers and presents documents to bank
3) Bank checks documents and notifies buyer
4) Buyer approves or rejects
5) Bank advises acceptance (notifies supplier of buyer's acceptance)
6) Supplier requests early payment, Bank credits supplier's account
7) At maturity, bank debits buyer's accounts
After the buyer approaches the bank and the supplier delivers the goods, the
supplier presents the documents which are then checked by the bank. After the
buyer’s acceptance, the supplier is notified and requests early payment. Finally, at
maturity, the buyer’s bank account is debited with the amount of the invoice.

12
Figure 4 illustrates what the structure can look like:
Figure 4: Reverse Factoring - structure (Seifert and Seifert, 2009, 2)
Nowadays, reverse factoring is usually traded via an IT platform with the
following steps:
1) Basis is the underlying transaction between buyer and seller.
2) The supplier submits the invoice through IT platform.
3) The buying party's information system receives it.
4) As soon as the buyer approves, supplier receives notification via the
platform
5) The supplier can choose whether to wait until payment term expires and the
buyer pays, or to request credit grants from the bank.
6) The bank receives request via IT platform.
7) The bank pays supplier amount minus the fees. When buyer pays at
maturity, risk of bank is transferred from bank-supplier to bank-buyer because
buyer’s approval is basis for bank's decision to grant credit (Trade facilitation
implementation guide, 2012,1).
In a survey of 213 executives in 55 countries, the major benefits of SCF were
described as follows:
 suppliers were able to reduce working capital
 payment terms were standardized
 supplier relationships were improved
 Purchase-to-Pay process was improved
 Order-to-Cash process was improved
 Record-to-Report process was improved
 more transparency and fewer disputes for suppliers

13
The only drawbacks mentioned for buyers were reduced credit availability and
the pressure to guarantee payment (Seifert and Seifert, 2009, 3).
The implementation of SCF is not always successful. The survey found the three
key success factors to be:
 Banking partner: it is important to find a suitable banking partner, based on
criteria like geographic reach, legal expertise and financial strength.
 Internal sponsorship: it makes a difference whether the CEO or the CFO lead
the implementation of SCF.
 Supplier involvement: not all suppliers are willing to participate in a program
that seems very complicated and that they don’t understand. The company
needs to be aware of which suppliers they can include in the program (Seifert
and Seifert, 2009, 3-4).
Not every supplier is eligible to be included in the reverse factoring program. In
most of Western Europe, the threshold for inclusion is an annual turnover of 1 million.
A director of a research institution estimated that € 20 billion of working capital
are locked in the supply chain in the form of invoices that are not yet paid. Supply
Chain Finance could easily help to unlock 10% (GTR, 2013, 1).
Cash gap
The cash gap describes the gap between accounts payable and receivable. The
longer the time span after bills are paid (accounts payable) until cash is collected from
customers (accounts receivable), the larger the cash gap. Ways to reduce the cash
gap are implementing a just-in-time inventory in order to get money out of inventory,
avoiding payments to suppliers for as long as possible. Negotiating extended credit
terms from your suppliers, and giving discounts to early-paying customers are further
methods of reducing the cash gap (Borgia and Burgess, n.d., 1-2).
Figure 5 symbolizes the process of the cash gap. The arrival of inventory on
Day 0 creates accounts payable that need to be paid until Day 30. Receivables are
only collected on Day 60 and therefore the manufacturing business cash gap is 30
days.
The gap for businesses in the service industry is similar. Employees need to be paid
starting on Day 15, and receivables are only collected starting on Day 30. This
represents a cash gap of 15 days.

14
Figure 5: Business/Cash gap for different industries (Prairie Business Credit, Inc., 2009,1)

15
3) Spanish market
In this chapter, an overview of Spain’s economic history and current situation is
given, along with its development of factoring.
Analysis and economic situation
After an attempt to self-sufficiency in 1939, Spain’s position in World War II
(WWII) and its isolation thereafter, led to little or no economic growth in the post-war
years.
The International Monetary Fund (IMF), the Organization for Economic Co-
Operation and Development (OECD, 2015,1) (OECD) and the International Bank for
Reconstruction and Development (The World Bank Group, 2015,1) (IBRD) promised
foreign financial assistance and approved the so-called Stabilization plan, which
targeted the reduction of domestic inflation, among other issues.
Between 1964 and 1982 Spain underwent a series of plans and stabilization
programs in order to tighten monetary policy and let the economy recover. As a
result, Spain introduced the market economy and rejected protectionism (Advameg,
2015, 1).
Spain joined the EU in 1986 (Europa, n.d., 1), which increased foreign
investment but also transformed the former trade surplus into a trade deficit. By
lowering tariffs, imports were boosted but exports declined. In order to solve these
issues, a number of measures and projects were undertaken. Examples are the
pursuit of market liberalization and deregulation, the devaluation of the Spanish
currency three times and the construction of airports and high-speed railways. Spain
also became a main beneficiary of the EU “harmonization fund”.
In the 1990s, the economic situation changed and Spain experienced strong
growth rates, a rise in foreign investment and increasing liberalization. Moreover,
unemployment decreased and inflation remained stable. In 1999, Spain joined the
European Monetary Union (EMU) and targeted reduction of public sector deficit,
inflation and unemployment, reformation of labor laws and investment regulations,
and increase of GDP per capita. Especially the construction sector was doing very well
in 2002 as a result of higher investment and public infrastructure projects (Advameg,
2015,1).
This situation continued until the 2008 financial crisis, which put a vast decline to
Spain’s economic growth.
Spain experienced strong growth of GDP in 2006 and 2007 of 4% and 3.6%,
respectively (see Figure 6). From 2008 to 2009, growth declined to 0.8% and reached
its lowest level. Spain’s economy started recovering in 2010. Issues that Spain is still
fighting with nowadays include public debt, the debt crisis and rising interest rates
(BCR Factorscan, 2012a, 1).

16
23,182
28,065
33,303
48,179 48,818
53,375
0
10,000
20,000
30,000
40,000
50,000
60,000
2005 2006 2007 2008 2009 2010
€(millions)
year
31,567
37,486
45,376
55,515
66,772 83,699
100,000
104,222
112,909
122,125
124,036
116,546
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
€(millions)
year
Figure 6: Growth of Spain's economy (Asociacion Espanola de Factoring, 2012, in BCR Factorscan, 2012a,
1)
Development and use of factoring
Spain is one of the biggest factoring markets in Europe. The 24 members of the
Spanish Factoring Association conduct domestic and international factoring, both with
and without recourse.
Factoring in Spain accounted for 11.39% of GDP in 2013 and Spain had a share
of 9.25% of the factoring market that same year (EUF, 2015c, 1). Reverse factoring
accounted for 47.3% by volume of the total industry (BCR Factorscan, 2012b,1). In
2013, the volume of international factoring was 13,687 million (FIMBank, 2014,1).
This can be seen in Figure 7.
Figure 7: Evolution of factoring in Spain (EUF, 2015c, 1)

17
In the midst of the crisis that has been preventing the economy from
recovering, commercial banks have become increasingly important in helping
companies to recover and survive by providing refinancing and debt structuring
solutions.
Demand for products that offer more security has increased, and thus reverse
factoring has become very popular.
One of the main issues for suppliers is the cost of sales and the default rate. By
conducting reverse factoring and getting a cash advance, they avoid exposure within
their own banks. The buyer has the possibility to optimize his working capital and
balance sheet, postpone payments and strengthen the relationship with their suppliers
(BCR Factorscan, 2012b,1).
Recourse factoring grew by 17.94% in 2011, while non-recourse factoring only
increased by 4% (BCR Factorscan, 2012b,1).
The public sector is mainly responsible for the increase in both reverse factoring (BCR
Factorscan, 2012a, 1) and recourse factoring (BCR Factorscan, 2012b,1). It has very
high purchase volumes and reverse factoring enabled the opportunity for an increase
in assignments and advances (BCR Factorscan, 2012a, 1). Moreover, its payment
delays have increased drastically (BCR Factorscan, 2012b, 1).
In the course of the crisis, payment defaults, delays and extensions have
increased, leading to drastically limited liquidity. To solve this issue, a new law for
improving payment terms for companies and public bodies has been governed.
Its main points are:
 removal of agreement of payment terms between buyer and supplier as SMEs
do not have the power to refuse longer payment terms desired by suppliers.
 term starts at delivery of goods or services
 an auditor’s report about payment terms has to be included in the financial
statements
 The transitional period ended December 2012, and conditions differ among
sectors.
The banking sector also extends payment terms through reverse factoring
programs to facilitate the transitional period.
As can be seen in Figure 8, the manufacturing, construction and commerce
industry use reverse factoring the most, followed by the energy, transport and
medical sector. The fishing, agriculture and accommodation industry make up the
“others” segment (BCR Factorscan, 2012a, 1).

18
Manufacturing,
23.21%
Medical
Supplier, 2.83%
Energy, 8.12%
Transportation,
6.31%
Contruction,
13.28%
Commerce,
17.20%
Others, 29.05%
Figure 8: Factoring turnover by industry (BCR Factorscan, 2012a, 1)
The main markets for factoring are Madrid and Catalunya, which make up 62%
of the total factoring volume of Spain (BCR Factorscan, 2012b, 1).
Technology has also helped increase the popularity of reverse factoring. Conducting
the transactions via computer systems or web platforms has facilitated the whole
process immensely for both buyers and suppliers. Even mobile alerts for the
smartphone have been developed.
By now, the economic environment, IT and general development have transformed
reverse factoring from an innovative and unknown method into one of the most
popular means of payment (BCR Factorscan, 2012a, 1).

19
Company Name Factoring? Volume 2013
(€ thousand)
Volume 2012
(€ thousand)
Volume 2011
(€ thousand)
Abengoa B yes 217 303 274
Abertis Infraestructuras SA no
ACS Actividades
des Construcción y Servicios SA yes 458,000 0 21,825
Amadeus IT Holding SA yes 0 10 0
Distribuidora Internacional
de Alimentacion SA yes 0 14 10
Enagas SA yes N.A. N.A. N.A.
Ferrovial SA yes 160,000 145,000 299,000
Gamesa Corporacion
Tecnologica SA yes 250,000 426,000 415,000
Gas Natural SDG SA yes 705,852 814,873 623,570
Grifols SA no
Indra Sistemas SA no
Obrascon Huarte Lain SA yes 198,883 336,532 486,788
Red Electrica
Corporacion SA no
SACYR yes N.A. N.A. N.A.
Tecnicas Reunidas SA no
4) Empirical analysis
The empirical analysis consists of two parts: assessing the use and volume of
factoring in listed companies of the Spanish stock market index, and calculating their
cash gaps.
Empirical analysis I: Top companies of IBEX 35
This analysis focuses on 15 of the 35 companies of the IBEX 35. Banks and
companies that are only subsidiaries of non-Spanish entities were intentionally
omitted. Only companies with annual revenues larger than 50 million € were taken.
This section aims to assess
a) if the companies conduct factoring or reverse factoring,
b) in what volume they conduct it, and
c) how these volumes relate to revenues
over the three year period 2011 to 2013.
The analysis and conclusions are based on annual financial statements of these
companies.
4.1.1. Factoring
Of the 15 companies listed in Table 1 below, 10 conduct factoring and 8 have
the annual factoring volume listed in their financial statements. The volumes differ
greatly from one company to the next. Two companies do not have their factoring
volume listed in their financial statements, they are shown as N.A. in the table below.
Table 1: Top IBEX companies, Factoring and Volume (consolidated financial statements of all companies,
2011-2013)

20
Company Name
% of revenues
2013
% of revenues
2012
% of revenues
2011
Abengoa B 0.00% 0.00% 0.00%
ACS Actividades des Construcción y Servicios SA 1.19% 0.00% 0.77%
Amadeus IT Holding SA 0.00% 0.00% 0.00%
Distribuidora Internacional de Alimentacion SA 0.00% 0.00% 0.00%
Ferrovial SA 1.96% 1.90% 4.02%
Gamesa Corporacion Tecnologica SA 10.70% 15.99% 13.71%
Gas Natural SDG SA 12.64% 13.44% 11.84%
Obrascon Huarte Lain SA 16.16% 29.08% 10.00%
average 5.33% 7.55% 5.04%
standard deviation 6.69% 10.88% 5.87%
The companies that have the highest volume of factoring are Gas Natural SDG
SA, Obrascon Huarte Lain SA and Gamesa Corporacion Tecnologica SA. They conduct
their businesses in the Construction, Technology and Oil and Gas sectors,
respectively.
When comparing the differences in factoring volumes, it was discovered that
some companies did not only decrease their volume, but completely opted out of
factoring (Amadeus IT Holding SA and Distribuidora Internacional de Alimentación)
and are therefore shown by -100% in Table 2.
The volume of factoring alone does not provide a proper picture as such.
Therefore the volume of factoring is set in relationship to the total value of revenues
of each of the companies. This way the gap of opportunity for factoring is shown much
better. The following table summarizes the current percentages.
Table 3 shows that the companies conducting the largest volume of factoring
with relation to revenues are Gamesa Corporacion Tecnologica SA, Gas Natural SDG
SA and Obrascon Huarte Lain SA. These companies operate in the Technology, Oil and
Gas and Construction industries, respectively.
Table 3: Top IBEX companies, Factoring as a % of Revenues (based on annual financial statements of all
companies, 2011-2013)
Table 2: Top IBEX companies, % change of factoring volume 2011-2012and 2012-2013 (based on
consolidated financial statements of all companies, 2011-2013)
Company Name % change 12-13 % change 11-12
Abengoa B -28.33% 10.52%
ACS Actividades des Construcción y Servicios SA 100.00% -100.00%
Amadeus IT Holding SA -100.00% 0.00%
Distribuidora Internacional de Alimentacion SA -100.00% 38.42%
Ferrovial SA 10.34% -51.51%
Gamesa Corporacion Tecnologica SA -41.31% 2.65%
Gas Natural SDG SA -13.38% 30.68%
Obrascon Huarte Lain SA -40.90% -30.87%

21
Company Name
Volume % change
2012-2013
Volume % change
2011-2012
ACS Actividades des Construcción y Servicios SA -42.23% 82.73%
Distribuidora Internacional de Alimentacion SA -11.28% -6.66%
Indra Sistemas SA -100.00% -16.67%
Company Name
Reverse
factoring?
R.F. 2013
(€ thousand)
R.F. 2012
(€ thousand)
R.F. 2011
(€ thousand)
Abengoa B no
ACS Actividades
des Construcción y Servicios SA yes 30,937 53,552 29,306
Amadeus IT Holding SA no
Distribuidora Internacional
de Alimentacion SA yes 279,237 314,751 337,221
Ferrovial SA yes 0 0 28,400
Gamesa Corporacion
Tecnologica SA no
Gas Natural SDG SA no
Indra Sistemas SA yes 0 10 12
Obrascon Huarte Lain SA no
4.1.2. Reverse factoring
Between 2011 and 2013, reverse factoring was used by three companies only.
Out of the 15 evaluated companies, only four used reverse factoring in 2011
(Table 4). This number was reduced to three in 2012 and two in 2013.
The reverse factoring volume of ACS Actividades des Construcción y Servicios SA
increased significantly, while that of Distribuidora Internacional de Alimentación and of
Indra Sistemas SA decreased (see Table 4). Comparing 2012 to 2013 reveals a
significant reduction (42.23%) for ACS Actividades des Construcción y Servicios SA, a
continued reduction (11.28%) for Distribuidora Internacional de Alimentación and a
complete termination of such services for Indra Sistemas SA.
Table 5 shows that reverse factoring appears to be fluctuating significantly from
one year to the next, in one case even to complete elimination of reverse factoring.
Table 4: Top IBEX companies, reverse factoring and R.F. volume (based on annual financial statements of
all companies, 2011-2013)
Table 5: Top IBEX companies, RF, % change of volume 2011-2012and 2012-2013 (based on annual financial
statements of all companies, 2011-2013)

22
Company Name F. 2013 R.F. 2013 F. 2012 R.F. 2012 F. 2011 R.F. 2011
ACS Actividades 1.19% 0.08% 0.00% 0.14% 0.77% 1.03%
Distribuidora 0.00% 2.84% 0.00% 3.24% 0.00% 3.45%
Indra Sistemas SA 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
average 0.97% 1.13% 1.49%
std. deviation 1.62% 1.83% 1.77%
Reverse factoring seems to be only evolving in Spain, or at least only
represents a very small part of revenues (Figure 9).
For the three companies conducting reverse factoring, the comparison of
reverse factoring and factoring as a percentage of revenues is shown in Table 6:
ACS Actividades used reverse factoring for less than one percent of its annual
revenues in 2013, Distribuidora for almost 3 % (Table 6).
Indra Sistemas SA had only marginal usage of reverse factoring which is not
representative in percentage calculation. ACS conducted more factoring than reverse
factoring in 2013, whereas Distribuidora stopped factoring completely in 2013. There
appears to be room for improvement.
Figure 9: Top IBEX companies, RF as a % of revenues (based on annual financial
statements of all companies, 2011-2013)
Table 6: Top IBEX companies, RF and F as a % of revenues (based on annual financial statements of all

23
Empirical analysis II: Cash gap in top 15 companies of IBEX 35
This chapter focuses on the calculation of the cash gap and the interpretation of
the results.
4.2.1. Calculation of cash gap
The cash gap was calculated as follows:
Days of inventory + Days sales outstanding (accounts receivables days) – Days
payable outstanding.
The calculation of its components is shown below:
Days of inventory: average inventory / operating expenses x 365
Days sales outstanding: average accounts receivable / revenues x 365
Days payable outstanding: average accounts payable / operating expenses x 365.
Table 7 was dependent on the amount and quality of the data available. Due to
lack of information, days of inventory and days payable outstanding had to be
calculated slightly differently. Operating expenses were used, since 90% did not
display COGS in their annual statements. Further details as to how the numbers were
calculated can be found in Tables A.2 to A.4 in the Appendix.
The table shows the cash gap for all companies in days. A positive cash gap
means that accounts receivable are collected from customers before suppliers are paid
(accounts payable). Conversely, a negative cash gap indicates suppliers are paid
before accounts receivable are collected. This symbolizes the need for cash reserves
(Simone, 2015, 1).
In my attempt to make the calculations as realistic as possible, I consulted an
expert in balance sheet analysis, who is very experienced with Spanish companies,
especially with companies in the construction industry. The following paragraph
summarizes the main points and/or problems discussed.
According to Mr. Krajiczek, calculating the cash gap for construction companies
is very difficult for the following main reasons:
1) The Spanish public sector has very long payment delays.
2) Special claims of construction companies towards their customers. These claims
result from the construction companies working more than their arranged
workload, and therefore claiming more compensation from their clients. These
claims represent estimates made by the construction company, and thus may
be over-estimated.
3) Several large companies are financed through their subsidiaries. These
subsidiaries sell their accounts receivable towards their parent company to a
bank (conduct factoring) and this process distorts the balance sheet picture of

24
the parent company, since this factoring is usually with recourse to the parent
company.
The figures shown below may deviate significantly from reality due to the
reasons given above.
4.2.2. Interpretation of results
All of the companies have negative cash gaps. They appear to pay their
suppliers faster than they receive money from their customers. The companies
highlighted in green are the ones that conduct factoring. Some of those do have lower
cash gaps.
However, Abertis Infraestructuras SA, Grifols SA and Red Electrica Corporacion SA
have the lowest days of cash gap. Interestingly enough, not a single one of these
companies uses factoring. Nevertheless, conducting factoring could help to achieve
the goal of a positive cash gap.
As stated before, companies in the construction or infrastructure industries, such as
Abengoa, ACS Actividades des Construcción y Servicios SA, Ferrovial, Obrascon Huart
Lain SA, Sacyr have extremely long cash gaps for the above listed reasons. Most of
the companies reduced their days of cash gap between 2011 and 2013.
Table 7: Top IBEX companies, cash gap in days (based on annual financial statements of all
Company Name
2013 2012 2011
Abengoa B (1,487) (1,946) (1,548)
Abertis Infraestructuras SA (106) (173) (125)
ACS Actividades des Construcción y Servicios SA (1,477) (1,326) (1,577)
Amadeus IT Holding SA (47) (311) (545)
Distribuidora Internacional de Alimentacion SA (605) (635) (561)
Enagas SA (302) (447) (430)
Ferrovial SA (187) (231) (525)
Gamesa Corporacion Tecnologica SA (1,043) (605) (582)
Gas Natural SDG SA (276) (287) (263)
Grifols SA (125) (157) (241)
Indra Sistemas SA (6,115) (334) (450)
Obrascon Huarte Lain SA (523) (800) (752)
Red Electrica Corporacion SA (237) (213) (160)
SACYR (682) (241) (187)
Tecnicas Reunidas SA (2,094) (2,022) (2,644)
cash gap in days
receivables+invent-payabl

25
Company Name
Volume 2013
(€ thousand)
% of revenues
2013
Industry
Obrascon Huarte Lain SA 198,883 16.16%
Construction,
Concessions
Gas Natural SDG SA 705,852 12.64% Oil and Gas
Gamesa Corporacion Tecnologica SA 250,000 10.70% Technology
5) Summary of findings
Factoring and Reverse factoring
10 of the 15 analyzed companies use factoring, 8 of the 10 companies list the
annual factoring volumes in their financial statements.
The companies conducting the highest volume of factoring, and where factoring has
the highest percentage of revenues, operate in the Construction, Technology and Oil
and Gas sectors. These industries were among the most common of all the companies
analyzed.
Table 8 shows the top companies in terms of factoring volume.
Only three companies (Obrascon Huarte Lain SA, Gas Natural SDG SA, and
Gamesa Corporacion Tecnologica SA) use factoring for more than 10% of their
revenues, the other 5 companies only use 1-2% of their revenues for factoring. This
appears to represent their bad debt percentage. Overall there is major potential for
growth.
Overall factoring appears to decrease by double digit percentages compared to
last year’s usage. Two of the eight companies using factoring even opted out
completely.
Considering the rather low usage numbers in terms of percentage of revenue, and the
double digit percentage fluctuation from year to year leads to the conclusion, that
either companies only use factoring for what they consider bad debt and/or that they
are not aware of the additional potential of factoring. Overall, there appears to be a
huge market to be conquered.
The situation for reverse factoring is even worse. Only three companies are
using reverse factoring, the largest user shows 3% of its revenue for reverse
factoring. Reverse factoring also appears to be a large market.
Table 8: Top IBEX companies, summary volume, % of revenues (based on annual financial
statemements of all companies, 2011-2013)

26
Cash gap
The analysis revealed that the cash gap days are negative for most of the
companies checked. Paying suppliers before money is collected from customers is far
from optimization. It appears, as if awareness about this fact needs to be improved.
The companies with the lowest cash gaps are surprisingly companies that do not use
factoring at all. Companies in the construction and infrastructure industries have
extremely long cash gaps despite their use of factoring. One of the reasons is the long
payment delays from the public sector. In general, proper usage of factoring for
accounts receivable would definitely improve the situation.
Additionally, the preparation of financial statements according to different
accounting practices, and often disregarding international accounting standards leaves
room for improvement.
Especially companies in the construction business would be well advised to prepare
their financial statements by considering international accounting rules.

27
6) Conclusion
The goal of this paper was to assess if factoring and reverse factoring are used
in Spanish companies, and if factoring helps to reduce the cash gap, and improve
liquidity. The selected sample included 15 of the 35 IBEX companies. Banks and
companies that are only subsidiaries of non-Spanish entities were intentionally
omitted.
In order to answer the question an empirical analysis was conducted. The volume of
factoring and reverse factoring was set in relation to revenues, and the cash gap was
calculated. Annual financial statements served as a basis for the analysis. However,
not all of the required information could be found in those statements.
The empirical analysis revealed that about two thirds of the selected companies
already conduct factoring. Reverse factoring was used by three companies. In 2013,
the average volume of factoring was about 5.3% of revenues, for reverse factoring it
was around 1%. Factoring is mainly used by the Construction, Technology and Energy
industry. However, indicated by the low percentages of factoring volume compared to
total revenues, several of the companies seem to only use it to cover short term
liquidity needs, and don’t use the full potential that factoring has to offer.
Three of the companies stopped their usage of factoring (two regular factoring and
one reverse factoring) from one year to the next. This is a further indication of
covering only short-term needs.
A reason for using factoring only for a short period could be the high fees that
banks and factor companies charge. However, it is also important to see the
advantages: increased liquidity with no liability on the balance sheet, and not having
to collect accounts receivable, since the bank takes over that task.
Since not all clients have the same liquidity needs, most banks offer custom-made
structures for their clients (UniCredit Bank Austria, 2015a, 1). This represents more
work for the bank, but is a major advantage for clients.
Despite the fact that reverse factoring was developed in Spain (BCR Factorscan,
2012b,1), only three of the 15 companies analyzed actually used it. In addition to
that, the highest percentage of reverse factoring was 3% of revenues.
Factoring and reverse factoring were analyzed over the years 2011 to 2013. After the
crisis, factoring became more popular in Spain due to liquidity needs and the long
payment periods of most companies (BCR Factorscan, 2012b,1) and the public sector
(BCR Factorscan, 2012a, 1). An interesting point is that factoring in Spain accounted
for 11.39% of GDP in 2013 and Spain had a share of 9.25% of the factoring market
that same year (EUF, 2015c, 1). Reverse factoring accounted for 47.3% by volume of
the total industry (BCR Factorscan, 2012b,1).
Based on the above-mentioned reports overall factoring volumes in Spain
appear to be different to the results of this paper. One reason for that could be that
smaller companies are using factoring more often than large ones or the analyzed
companies are not representative of the Spanish market. It is also possible that more
detailed information would be necessary for an in- depth analysis.

28
This indicates that factoring in the analyzed companies is considered as a means of
assuring payment for problem cases, much rather than an alternative of financing and
handling of accounts receivable.
It appears, as if a double-digit percentage increase of factoring, as well as reverse
factoring can be achieved by an information / education campaign about advantages
of factoring in general. In essence, using factoring has the potential of completely
outsourcing an accounts receivable department to a factor. Savings achieved by such
measures need to be deducted from the cost of factoring to calculate the actual cost
of this service.
In addition, financing costs of negative cash gaps have to be considered, as
well. With increasing risk, such cost can easily outnumber factoring costs.
It is recommended that such a campaign is started with a few of the “big players” in
Spain. This would allow the factor to not only create a “role model” in the market, but
also use the same for marketing purposes to increase volume with other customers.
Any factor ready for this attempt would also be well advised to reduce their starting
rates for the first year in order make factoring even more interesting and affordable.
A certain amount of caution needs to be exercised, especially when dealing with
companies in or related to the construction business. It appears as if their reported
numbers are slightly distorted. Therefore, it may make sense to request a pre-defined
set of data and information from them including instructions on how to calculate the
required data.

29
7) List of abbreviations
CG…………………………… Cash gap
COGS……………………… Cost of goods sold
EMU…………………………. European Monetary Union
EU……………………………. European Union
F……………………………… Factoring
GDP…………………………. Gross Domestic Product
IBRD……………………….. International Bank for Reconstruction and Development
IMF…………………………. International Monetary Fund
N.A. ……………………….. Not available
OECD………………………. Organization for Economic Co-Operation and
Development
RF……………………………. Reverse factoring
SCF …………………………. Supply Chain Finance
WWII……………………….. World War II

30
8) List of Figures
FIGURE 1: FACTORING DEAL - STRUCTURE (UNICREDIT BANK AUSTRIA, 2015A)......3
FIGURE 2: DIFFERENCES BETWEEN FACTORING AND A BANK LOAN (RTS FINANCIAL,
2015,4) ......................................................................................................4
FIGURE 3: FACTORING VOLUME IN THE EU BY COUNTRY, 2013 (EU NATIONAL
ASSOCIATIONS, IFG AND FCI STATISTICS IN EUF, 2015B,1) ............................7
FIGURE 4: REVERSE FACTORING - STRUCTURE (SEIFERT AND SEIFERT, 2009, 2)...12
FIGURE 5: BUSINESS/CASH GAP FOR DIFFERENT INDUSTRIES (PRAIRIE BUSINESS
CREDIT, INC., 2009,1) ...............................................................................14
FIGURE 6: GROWTH OF SPAIN'S ECONOMY (ASOCIACION ESPANOLA DE FACTORING
IN BCR FACTORSCAN, 2012A, 1) .................................................................16
FIGURE 7: EVOLUTION OF FACTORING IN SPAIN (EUF, 2015C, 1) .........................16
FIGURE 8: FACTORING TURNOVER BY INDUSTRY (BCR FACTORSCAN, 2012A, 1) ....18
FIGURE 9: TOP IBEX COMPANIES, RF AS A % OF REVENUES (BASED ON ANNUAL
FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013).............................22

31
9) List of Tables
TABLE 1: TOP IBEX COMPANIES, FACTORING AND VOLUME (CONSOLIDATED
FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013).............................19
TABLE 2: TOP IBEX COMPANIES, % CHANGE OF FACTORING VOLUME 2011-2012AND
2012-2013 (BASED ON CONSOLIDATED FINANCIAL STATEMENTS OF ALL
COMPANIES, 2011-2013)............................................................................20
TABLE 3: TOP IBEX COMPANIES, FACTORING AS A % OF REVENUES (BASED ON
ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) ................20
TABLE 4: TOP IBEX COMPANIES, REVERSE FACTORING AND R.F. VOLUME (BASED
ON ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) ...........21
TABLE 5: TOP IBEX COMPANIES, RF, % CHANGE OF VOLUME 2011-2012AND 2012-
2013 (BASED ON ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-
2013).......................................................................................................21
TABLE 6: TOP IBEX COMPANIES, RF AND F AS A % OF REVENUES (BASED ON
ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) ................22
TABLE 7: TOP IBEX COMPANIES, CASH GAP IN DAYS (BASED ON ANNUAL FINANCIAL
STATEMENTS OF ALL COMPANIES, 2011-2013) .............................................24
TABLE 8: TOP IBEX COMPANIES, SUMMARY VOLUME, % OF REVENUES (BASED ON
ANNUAL FINANCIAL STATEMEMENTS OF ALL COMPANIES, 2011-2013) ............25
TABLE A.1: TOP IBEX COMPANIES, REVENUES AND INDUSTRY (BASED ON ANNUAL
FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) …………………………... 36
TABLE A.2: TOP IBEX COMPANIES, CG, DAYS OF INVENTORY (BASED ON ANNUAL
FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) …………………………. 36
TABLE A.3: TOP IBEX COMPANIES, CG, DAYS SALES OUTSTANDING (BASED ON
ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) ……………… 37
TABLE A.4: TOP IBEX COMPANIES, CG, DAYS PAYABLE OUTSTANDING (BASED ON
ANNUAL FINANCIAL STATEMENTS OF ALL COMPANIES, 2011-2013) ………………. 37

32
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36
Company Name
Revenue 2013
(€ thousand ) Industry
Abengoa B 7,356,470
Construction -
Renewable energy
Abertis Infraestructuras SA 4,492,428 Infrastructure
ACS Actividades des Construcción y Servicios SA 38,373,000 Construction
Amadeus IT Holding SA 3,103,703 IT, Technology
Distribuidora Internacional de Alimentacion SA 9,844,338 Retail
Enagas SA 1,278,603 Oil and Gas
Ferrovial SA 8,166,000 Infrastructure
Gamesa Corporacion Tecnologica SA 2,335,618 Technology
Gas Natural SDG SA 5,586,000 Oil and Gas
Grifols SA 312,670
Healthcare,
Bioscience
Indra Sistemas SA 2,914,073 Telecommunications
Obrascon Huarte Lain SA 3,684,170
Construction,
Concessions
Red Electrica Corporacion SA 1,758,266 Energy
SACYR 3,065,026 Construction
Tecnicas Reunidas SA 2,846,101
Infrastructure,
Engineering
Company Name
2013 2012 2011
Abengoa B 112 161 139
Abertis Infraestructuras SA 7 11 12
ACS Actividades des Construcción y Servicios SA 245 206 180
Amadeus IT Holding SA 0 0 0
Distribuidora Internacional de Alimentacion SA 265 270 247
Enagas SA 27 27 17
Ferrovial SA 35 45 70
Gamesa Corporacion Tecnologica SA 768 981 991
Gas Natural SDG SA 114 134 132
Grifols SA 4 6 3
Indra Sistemas SA 1,418 226 213
Obrascon Huarte Lain SA 81 84 68
Red Electrica Corporacion SA 35 61 58
SACYR 779 1,225 885
Tecnicas Reunidas SA 28 25 25
days of inventory
Appendix
This chart gives an overview of the companies that were analyzed, their annual
revenues and in what industries they conduct their business. As can be seen, the most
common industries are the Construction, Technology and Energy industry.
The following charts show the details of the calculation of the cash gap. For
days of inventory and days payable outstanding operating expenses were used.
The formula used was average inventory / operating expenses x 365.
Table A.1: Top IBEX companies, Revenues and Industry (based on annual financial statements of all
Table A.2: Top IBEX companies, CG, days of inventory (based on annual
financial statements of all companies, 2011-2013)

37
Company Name
2013 2012 2011
Abengoa B 103 118 111
ACS Actividades des Construcción y Servicios SA 108 105 107
Enagas SA 187 178 193
Gamesa Corporacion Tecnologica SA 186 203 177
Grifols SA 57 97 133
Indra Sistemas SA 215 218 240
Obrascon Huarte Lain SA 221 197 165
SACYR 234 230 191
Tecnicas Reunidas SA 78 198 178
days sales
outstanding
Company Name
2013 2012 2011
Abengoa B 1,702 2,225 1,798
ACS Actividades des Construcción y Servicios SA 1,830 1,638 1,864
Enagas SA 516 652 641
Gamesa Corporacion Tecnologica SA 1,997 1,789 1,749
Grifols SA 186 260 378
Indra Sistemas SA 7,748 778 903
Obrascon Huarte Lain SA 825 1,082 985
SACYR 1,696 1,697 1,263
Tecnicas Reunidas SA 2,200 2,245 2,847
days payable
outstanding
Here the following formula was used: average accounts receivable / revenues x
365.
The basic formula for this calculation was: average accounts payable /
operating expenses x 365.
Table A.3: Top IBEX companies, CG, days sales outstanding (based on
annual financial statements of all companies, 2011-2013)
Table A.4: Top IBEX companies, CG, days payable outstanding (based on
annual financial statements of all companies, 2011-2013)

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