Letter from the CEO

As done every year since 2014, I am pleased to present our new Sustainability Report 2018, in which we gathered and synthetized the main data and events happened during this exercise.

Josu Calvo

Gonvarri Industries CEO

Dear readers,

I am pleased to present our Sustainability Report for one more year, where I invite you to discover the key economic, social and environmental initiatives we use to provide an answer to current and future sustainability challenges.

Strategic Plan 2016-2018

I would like to begin by thanking and congratulating all of the professionals who make up Gonvarri Industries. Without their collaboration and enthusiasm, we would not have been able to complete the 2016 – 2018 Strategic Plan successfully. This Plan, together with a more stable global environment, has allowed us to conclude the 2018 financial year with an EBITDA in keeping with forecasts, of 209.5 million euros after investments (CAPEX) that exceeded 250 million euros in 2018.

In 2016, we established the new “Drive” Management Model, which was gradually implemented throughout the

2016/18 period, with the objective of taking advantage of synergies and setting common standards. The model is aimed at profitable and sustainable growth based on four axes: people, efficiency, sustainability and innovation, which include the different action guidelines in each case.

This growth requires the integration of new businesses into our culture and way of working. This is where the Efficiency axis is of particular importance. In order to standardise and facilitate this integration, 16 key processes were identified in which more than 150 professionals with a high level of business knowledge are working, representing all countries, companies and functions of the organisation. This will allow us to homogenize our processes and have more efficient results.

We have a team of more than 5,000 professionals located in 24 countries, to whose development we want to contribute.

Through the People axis, we identify numerous initiatives aimed at improving their skills and development. We train our future managers by means of the “Gonvarri Leadership Program” which included professionals of 11 different nationalities, we improve the skills of our technicians with programs such as the “School of Supervisors” and we promote the knowledge of our workers in the plant, through the “Start-up teams”, who are in charge of transferring our work culture within the new facilities.

From the Sustainability axis, we work to integrate the Sustainable Development Goals (SDG) into our own Management Model “Drive”. In particular, Goal 3.6 stands out, which contributes to reducing deaths and injuries due to road traffic accidents, through the diffusion of the Emotional Driving project among different groups.

Our Innovation model is built around collaboration with customers, suppliers and technology partners, for the development of projects related to the product, processes and the evolution of the business model. We consider innovation to be a strategic tool at the service of business challenges with a participative approach, promoting the innovation culture throughout our organization.

The “Gonvarri 4.0” project represents our commitment to digital transformation. Led from the Innovation area and materialised in transversal projects, this project aims to make significant improvements in Efficiency, Quality and Safety.

Strategic Plan 2019-2021

We face the future with enthusiasm and responsibility, for which we have established the new Strategic Plan 2019-2021 in line with the achievements made, the experience acquired and our long-term expectations, aimed at consolidating Gonvarri Industries as a world-class industrial group within our different areas of activity.

This new plan also reflects the progress and consolidation of the Drive Management Model. At the end of the first period, several enhancements have been made to the model, including the full integration of the Compliance and Internal Audit axis, which we have been working on since 2017.

Its main lines of action include outlining controls and policies which aim to minimise risks, reinforcing existing controls and auditing their compliance in the different countries. In addition, online and on-site training on the Code of Ethics and the new compliance policies are fundamental pillars for their fulfilment and dissemination.

An outstanding development has been the change of our brand name to “Gonvarri Industries”. With this change, we adapt to the current market reality, which is more diverse and global, in line with our Mission, focused on activities of design and manufacture of innovative metal solutions. By doing this, we will boost the performance for our customers with a multinational and highly collaborative team.

Innovation continues to be a key factor in this timeframe. We must respond to our customers´ demands through digitalization, efficiency in our processes and the improvement of our product lines, using a variety of approaches:

・ In Auto, we reinforce our commitment to the use of high-quality materials such as aluminium and high-strength steels.

・ In Energy, we developed the new solar tracker axis, “TrackSmart+”, that increases the reliability and performance of photovoltaic parks.

・ In Road Safety, the launch of a test track that will allow the development of new and improved products, as well as the promotion of new solutions for impact absorbers.

・ In Storage Solutions (GMH), we expect significant growth in products with higher added value such as mobile shelving, self-supporting buildings and pallet solutions for automated warehouses, among others.

To improve the global management of the company, we have an important challenge: the “One SAP” project. The objective of this project is to incorporate the latest technology in management systems and to define a new systems environment that favours innovation by incorporating new possibilities for access and analysis of information in real time, in a collaborative environment with our customers and suppliers.

In this new phase we cannot overlook our professionals and how important their growth and well-being are to us. For this reason, we have designed various initiatives, such as the “Gonvarri Academy” project, which will allow us to define training programmes personalised by profiles. In order to approach the future with greater certainty, individual “successions plans” will be established for those candidates identified to occupy key and/or high potential positions within the company. All of this contributes to the retention of talent, as well as reinforcing pride of belonging to initiatives such as Diversity, Be Healthy! and Women of Steel.

Before concluding this letter, I would like to talk about another key aspect: Health & Safety. After many years of strong improvements regarding the rate of accidents, we have recently been through a small decline. For this reason, we will work actively to improve communication and the integration of all H&S standards, involving all employees via various initiatives aiming to reach “zero accidents”.

Finally, I would like to invite you to learn about the key milestones in our performance included in the 2018 finance report, hoping they will be of your liking.

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Letter from the Chairman
First chapter
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