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Letter from the Chairman

We present the Sustainability Report of Gonvarri Industries for 2019, 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.

For yet another year, I am pleased to present Gonvarri Industries’ Sustainability Report for 2019. It shows the main milestones and achievements of the year, within the framework of a strategy aimed at a profitable and sustainable long-term business, in which the creation of value plays a special role.

The global environment showed signs of deceleration as early as the second half of 2019. The growth expectations were affected by trade tensions between the United States and China and the rise in tariffs, the slowdown in the Eurozone, the Brexit without an agreement in the United Kingdom, the devaluation of some currencies and, for the automotive sector, increasingly demanding environmental legislation.

Furthermore, we start the year 2020 with a rather uncertain outlook for the economy. Since the end of December, we have been witnessing a global COVID-19 pandemic that started in China and is affecting us indiscriminately, stopping production and distribution in most sectors around the world. The massive spread of the pandemic and the lack of information on its duration bring us to anticipate a very complicated macroeconomic scenario.

However, despite this complex environment, the diversification of our business model has achieved a remarkable compliance with the budget set for the year 2019, showing its strength and ability to adapt. In Gonvarri Industries, turnover reached 3,728 million euros, with an EBITDA of 194 million euros.

The 62 million euros in CAPEX must be mentioned. Among the investments, the acquisition of the “Kredit” plant in the Czech Republic, which is part of the Gonvarri Material Handling division, and the start-up of the new “Gonvauto Nitra” plant in Slovakia stand out.

In addition, we have made significant investments to improve processes and the product portfolio, adding blanking lines for hot-stamping at Gonvauto Navarra and Gonvarri Valencia, hybrid blanking lines (steel and aluminium) at Gonvauto South Carolina, Gonvvama Chungshu, Gonvvama Shenyang and Gonvauto Nitra, as well as a new high thickness cutting line at Gonvarri Tarragona, among others.

This Report summarizes the most significant advances made in the first year of the 2019-2021 Strategic Plan, which incorporates and articulates the lines of action of the “Drive” Management Model in each axis: people, efficiency, sustainability, innovation and compliance. Performance objectives are based on a roadmap which aims to contribute to a more sustainable and efficient world, in line with the growth and profitability of the company, as well as the well-being of our professionals.

In this model, the United Nations’ Sustainable Development Goals (SDG) are, for Gonvarri Industries, a clear model of collaboration between companies, governments and society, as well as an opportunity for growth and improvement in our business. For this reason, we are committed to contributing to achieve them on a global scale, mainly by integrating those objectives that are most related to our business. In addition, we reaffirm our commitment to the United Nations Global Compact.

Since 2014, through the “Emotional Driving” road safety project, we have strengthened our commitment to our employees and society, in line with SDG 3.6, to help halve the number of road traffic deaths and injuries worldwide by 2020.
Among the most remarkable activities of this year; we continue to promote road safety through education and early awareness through talks and conferences in schools and by collaborating in the motivational congresses of the What Really Matters Foundation.

Following the success of the study on young people and mobile phone use at the wheel in collaboration with Movistar, the second edition of the study “Spaniards at the wheel, distractions and mobile phone use” was published in 2019, gathering the views of more than 2,000 Spaniards, representing a wider audience, between 18 and 65 years of age, and we began a process of internationalisation with Argentina as the first milestone, where the study “Argentinians at the wheel, distractions and mobile phone use” was presented with great success.

In addition, and in collaboration with the Real Madrid Foundation, we are strengthening our program with people with different abilities. The purpose is to introduce complementary values to the practice of sports, which will be developed throughout the season in adapted and inclusive schools, where, with the collaboration of Emotional Driving, a further step is taken in road education adapted to this group, which improves their autonomy and level of social integration.

In environmental matters, our contribution to the fight against climate change stands out, in line with SDG 7 and SDG 13, establishing plans to minimize our emissions. In this regard, 2019 is a period of analysis and reflection for Gonvarri Industries to define a new roadmap in accordance with current needs and trends, as well as the demands of our stakeholders, where the fight against climate change, the reduction of CO2 emissions and a carbon-neutral future play a fundamental role. Likewise, social demands focus on “plastic” due to its massive use in society, its impact on the environment and the difficulty of its management. Gonvarri Industries participates in this initiative by launching the project “#Unplastic: Fight against plastic”, which will be gradually implemented in our facilities and offices in the 2020-2021 period.

Aligned with SDG 16 and in order to contribute to more equitable societies, we are making progress in the approval, implementation and development of policies and standards that make up our “Compliance Model”, with the goal of optimizing the mechanisms for monitoring, measuring and controlling the risks identified, in order to grow as an ethical, integrated and transparent company.

We contribute to SDG 8 by promoting decent employment and job security. In 2019, 730 new professionals joined the company, bringing our total headcount to 4,952, 89% of whom have permanent contracts. As part of our efforts to attract and retain talent, in February we launched the “Gonvarri Academy” platform, aimed at offering online training to all the company employees. This has already resulted in more than 4,500 people registered who have managed to complete more than 8,000 hours of training, with 7,823 logins in 2019.

We also continue to implement various initiatives to reinforce the “Doing Well by Doing Safe” Safety Plan, which contribute to creating safe working environments, aiming for “zero” accidents. This year, the efforts made by the Gonvauto Iberia Division (Gonvauto Barcelona, Galicia and Navarra) and the Dongguan plant in China should be highlighted, as they obtained certification under the new ISO 45001 standard before the internally established deadlines.

Within the innovation and digitalization processes aligned with the SDG 9, the deployment of the “Digital WorkPlace” (DWP) project throughout the group stands out. This project will transform the way the company operates and enhance the talent of the professionals working in it. In June, the global deployment of DWP began with the participation of more than 2,000 professionals who already work on this platform, 2,101 attendees to webinars and 1,400 participants in national and international workshops.

Given all this, at Gonvarri Industries we aim to build a profitable and sustainable business model that is committed to creating value in the economic, social and environmental spheres.

Finally, I would like to invite you to read and share this Memory, hoping that it will be to your liking.

Letter from the CEO
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