🎬 Antón Pradera (CIE Automotive) - Buy and build

Returning to growth, I think what has become clear is that integrating companies globally is essential. We can't be moving our people around the world constantly; in multinational societies, over 80% of your workforce will be local—Indian, Chinese, and so on. The key is to integrate well. What we look at most when integrating is the people. We spend 345 days talking to managers to see if they breathe like us, if they share our worldview, if they can adapt to our culture. For example, in automotive, you have profiles from private equity who come to work 4-5 years for money without real commitment. I'm not interested in that. We go into integration like a marriage for life, saying we will make them like us and they might even end up running the company. Social responsibility is fundamental. You can't approach people thinking others are bad—that's nonsense. You analyze human groups, and in small companies, cultures are well-defined. We see the same values in Shanghai, Mexico, or São Paulo—it feels like you're talking to the same family. It's all about people. But for this to be real, you need cash. Forget accounting; cash is what matters. You must orient all companies to generate cash, because if you generate cash, you can buy, amortize, and take the next step. If not, you're just creating a financial problem. So we say growth is fine, but with financial health. Your own account gives you that health—sometimes you need a capital increase, but if your business doesn't generate, don't buy. First make it generate. That forces a clear investment scheme. In automotive, we define it financially: we invest in each company every year 40 new products with 5-7 year horizons. We demand 20% return on net assets; currently we're at 23% because we set high targets. People think that's aggressive, but we achieve it. If a new company comes with 8-9% margins, we analyze whether it's a product/price or cost problem and address it. We don't just chase money; we invest to make money. So we put all factories in competition, those giving 25% vs 24%—those below are strategic? But 'strategy' is a bad word here; the goal is to make money short, medium, and long term. You set your own targets. For example, we set our central overheads never to exceed 2% of revenue; now they're 0.5% and dropping. Our competitors are at 4-7%, so there's a huge margin differential. Another novelty is our network organizational structure. We don't have a huge centralized purchasing department. Each factory has a team responsible for its own profit and loss. They set reference prices for others, but each factory manager is an entrepreneur. If I give them responsibility for the P&L, I can't then micromanage their sales or purchases. We reject centralization synergies; a 5% improvement from commercial centralization would ruin the other 95% because it breaks the factory's customer relationship. The universal management concept is key. Finally, contrary to the trend of modules and being a Tier 1 selling modules, we avoid concentration risk. No customer exceeds 5% of sales. Now, after diversifying by geography, product, technology, and client, no single customer accounts for more than 0.3-0.4% of sales. That's vital. Early on in Spain, we bought companies dependent on Renault for 26-28% of sales; they had little flexibility. We must be independent. We only accept high-return investment processes; if a customer can impose investments, you're giving them the keys. This positioning gives us a 2-3 point price advantage, plus 3-4 points from lower central overheads, totaling a 7-8 point differential over competitors. It's hard to explain 20 years of work, but CIE is an accumulation of very good people, many from Basque family businesses. We've inherited that culture and adapted it to a multi-local multinational, not a traditional multinational structure.