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Letter from the CEO

As done every year since 2014, I am pleased to present our new Sustainability Report 2020, in which we gathered and synthetized the main data and events happened during this exercise.

Dear readers,

The 2020 financial year was clearly marked by the COVID-19 pandemic, bringing about an unprecedented deep health, economic and social crisis, affecting millions of people all over the world.

We have been directly impacted by its consequences. At Gonvarri we are mourning the death of a professional in Colombia, in addition to numerous employees hit by the disease. I would therefore like to express my solidarity to all those affected and their families, as well as the hope of an early recovery for those who are facing this harsh disease and its effects.

Since the beginning of the pandemic, our priority was to deal with these consequences, taking care of the health of our employees and their families, preserving employment, and making some adjustments in expenses and investments. This allowed us to minimize the impact of the pandemic and ensure business continuity.

In this scenario, we present the Sustainability Report for the year 2020, summarizing the most relevant events that took place this year within the different axes that make up the Drive Management model.

Global passenger car manufacturing in 2020 was down 16% compared to 2019. In Gonvarri Industries, the European, NAFTA and Gonvauto Iberia divisions were the most affected by the production stoppage in the automotive market during the second and third quarters. On the other hand, the increase in production activity in the Asian market was noteworthy, exceeding expectations.

In addition, the situation resulting from the pandemic and the uncertainty in the immediate future was reflected in the adjustment and cost containment policies adapted to each of the scenarios experienced in the different countries, by means of various measures such as temporary layoff plans, thus avoiding permanent staff reductions, the renegotiation of contracts with suppliers and the re-sizing of planned investments, among others.

In this global context, Gonvarri Industries met 85% of the objectives set, obtaining an EBITDA of 182.2 million euros, a net profit of 74 million euros and a CAPEX of 67 million euros for the year.

The commitment to growth and diversification established within the framework of the 2019/21 Strategic Plan has been ratified by our shareholders in such a difficult situation as the one we are currently facing.

During 2020, the construction of the Nitra (Slovakia) plant was completed in a joint venture with the Arcelor Group. Following its diversification strategy, the Gonvarri Material Handling Division (GMH) acquired the companies Lampe GmbH (Germany), Complete Storage & Interiors (UK) and Kaufmann (Switzerland). In addition, several investments in machinery and enlargements were made in Brazil, Germany, China, and India.

I am pleased to mention the signing of the first sustainable financing line with the Instituto de Crédito Oficial (ICO), for the period 2020-2024, under the reference framework of the “Sustainability Linked Loan Principles” (SLLP) of the Loan Market Association, now that financial institutions are incorporating ESG criteria in their decision making.

In recent years, innovation has played a key role at Gonvarri Industries in a variety of projects, among which the following stand out:

・ The company’s digitalization process through the Digital WorkPlace project, whose expectations were exceeded by the restrictions resulting from the pandemic. The increase in teleworking in the mandatory lockdown phases and the significant reduction in business trips accelerated the use of new digitalization technologies to communicate and maintain the pace of work.
・ Following a thorough analysis, we initiated an improvement process in order to enhance the company’s management and efficiency, which also enables us to simplify and incorporate the best practices learned in recent years as well as the new requirements in terms of digitization and Industry 4.0. The OneSAP renovation project to replace all current ERPs for SAP/S4 HANA complemented by other tools (MES, etc.) is part of this process, with the aim of making the most of new technologies to improve performance indicators and provide value to our customers.

The remarkable growth of Gonvarri Industries in recent years has made document management sometimes complex. For this reason, I would like to point out the “Gonvarri Library” project, a unique repository of all official corporate documentation, where you can find all the rules, standards, controls, procedures, guides, etc., applicable to the entire organization and necessary for the efficiency and better functioning of the company.

During this year characterized by severe restrictions, the transversal online training platform “Gonvarri Academy”, where all Gonvarri Industries employees have been able to complete various training courses from anywhere and at any time, has become especially relevant. There are currently 4,500 people registered, having completed more than 18,464 hours of training.

Gonvarri Industries aspires to play an active role in the fight against climate change and in accelerating the transition to a green economy. To this end, a Carbon Neutral 2030/50 Plan was defined with ambitious short-, medium- and long-term objectives, which will allow us to be carbon neutral by 2050.

With regard to the Health and Safety of Gonvarri’s professionals, and despite the difficulties caused by the pandemic, we have managed to lower the Frequency Rate with respect to the previous year and maintain the training effort as part of our culture, by means of the possibilities offered by digitalization and online training. In this context, the efforts and actions aimed at minimizing the effects of the pandemic at a global level and contributing to the protection of workers are noteworthy.

Finally, I would like to emphasize that at Gonvarri Industries we work every day in accordance with the Sustainable Development Goals, with the aim of generating a positive impact on our business, the environment, people, and society, leaving a
footprint that will allow us to grow in a profitable and sustainable way in the long term.

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Letter from the Chairman
First chapter
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