Annual Report 2008 Sustainability Report 2008 2008 Legal Report 2008 Annual Corporate Governance Report Sustainability Report 2008 Sustainability Report 2008 4 GAMESA CREATES VALUE AND WEALTH 31 Scope of Action: Business Units 33 LETTER FROM THE CHAIRMAN 6 Efficient Transformation: Business Plan 2006-2008 42 MAIN FIGURE 9 Challenges for the Future:Outlook Beyond 2010 45 Leadership in the 21st Century: R&D&i, Quality and Technology 48 GAMESA CREATES COMMITMENTS 11 GAMESA CREATES COMMUNITIES 55 Gamesa and the Energyculture 13 Customer-Driven Management Model 57 Our Corporate Values 13 Suppliers: Key Partners 61 Responsible Management: Shareholders’ Trust as a Pillar for Bodies of Corporate Governance 14 the Development of Gamesa’s Project 67 Ethical Business Management 23 Commitment to the Community 73 Gamesa >Sustainability Report 2008 GAMESA CREATES TEAMS 81 Creating Quality Employment 84 People’s Health and Safety 88 5 Multicultural Equality: The Style of Life at Gamesa 92 Universal Principles: Protection of Human Rights 94 GAMESA CREATES FUTURE 99 Corporate Responsibility in Caring for the Planet 101 Our Ecological Footprint 105 New Energy Solutions 118 ANNEXES 121 List of Associations 2008 122 Profile, Scope and Coverage 126 Materiality Report 2008 127 Index of GRI Indicators 129 Contact Us 137 Gamesa >Sustainability Report 2008 LETTER FROM THE CHAIRMAN Gamesa is creating this project with your commitment 2008 was for Gamesa a point of inflection, marking the culmination of a three-year transformation during which culmination of a three-year transformation process as operating margin annual growth reached 18% and we mapped out in the 2006-2008 business plan. Gamesa has generated 1,000 million euros in cash. achieved its growth, profitability and financial strength objectives, laying a firm foundation to face the new horizon. Circumstances as we complete the 2006-2008 cycle are 6 The environment is complicated but offers opportunities very different from those faced when we initiated the for sustainable development. Corporation’s transformation. Likewise, the severe economic and financial difficulties worldwide, marking the beginning We are all aware of the immediate difficulties for any of a new stage, might bear little resemblance to the situation economic activity and of the need to generate and distribute when we culminate the next cycle in our transformation. wealth in the midst of a crisis. In Gamesa’s case, we can Nevertheless, in reaching that new horizon, we must count on our proven capacity to create – on our innovation traverse this unstable path. The ability of companies to impulse – to face the situation and renew our success. We adapt will determine who reaches firm ground first. For have already initiated a new business cycle, with our sights the wind energy sector, mid- to long- term perspectives set on 2011 and sustained by growth perspectives for wind are determined by objective data. Firstly, wind energy is energy worldwide. the axis of a new energy culture, which we are all in a position to extend, as suggested by Global Wind Energy Gamesa undertakes a new transformation. We can count Council forecasts. GWEC anticipates that cumulated wind on the same force and the same reliability that brought us energy will double from 120 GW at end 2008 to the 228 here as well as renewed strength in our proven ability to foreseen in 2011, and that installation rates will also double create wealth, teams, communities and commitment – the from the 27 GW registered last year to reach 56 GW in bases for creating an economically, socially and 2013. Gamesa has dubbed this new era “Energyculture” – environmentally sustainable future. In 2008, our ability to a new relationship with our surroundings, generating energy create through innovation took us to new heights: net efficiently and sustainably – based on interests shared with profit (including discontinued operations) and earnings per administrations worldwide, who have seen a partner and share hit a maximum in the Corporation’s history at 320 a reference in Gamesa. This standing is not surprising, million euros and 1.32 euros per share, allowing the Board since the Corporation has installed more than 16.000 MW of Directors to propose a brute dividend of 0,20 euros per of our main product lines in 24 countries on four continents. share. Regarding the continued activities, sales reached The power generated by these Wind Turbine Generators 3651 million euros, or 27% more than in the previous year, each year is equivalent to 3.45 million tons of petroleum while the operating margin (EBITDA) was 495 million euros, (TEP) and avoids the emission of 24 million tons of CO2/year. or 40% higher. Thanks to our results, we have greatly improved our financial strength: the target was a maximum Through the 2006-2008 Business Plan, the Corporation has of 2.5 times consolidated EBITDA, and in fact this debt succeeded in focusing on wind energy, and therein, in its ratio has been reduced to 0.1. These figures represent the strategy to focus on high value-added activities and Gamesa >Sustainability Report 2008 strategy is the agreement reached between Gamesa and Iberdrola Renovables, to create two joint ventures integrating Wind Farm promotion, development and operation activities in Spain and continental Europe. The deal was approved by the European Union Competition Authorities in December, meaning it can be developed and materialized throughout 2009. The strategy will be extended to create value for Gamesa’s USA Wind Farm activities through alliance with a partner for promotion and operation. In focusing on the wind energy sector, the Corporation announced the sale of its Solar division on February 28, and the operation was effectively closed on April 23 for 261 million euros. Wind Energy’s potential has been perceived in terms of energy independence and economic regeneration. On the one hand is wind energy’s ability to create employment and economic activity: in the last five years, the sector has created 33 new jobs daily in the European Union, and forecasts indicate that the sector will employ 325,000 Europeans in 2020, creating 15 jobs for each MW installed. On the other, wind’s contribution to energy independence versus the volatility of international fossil fuel markets: stable alternatives reducing energy dependence are required in the face of price instability, sensitivity to geopolitical tension and the concentration of limited supplies. Currently 7 only wind energy provides the response, thanks to its technological development and its profitability – the ability to provide an immediate return on investments. The powers aspiring to leadership in overcoming the difficulties in these technological differentiation – Wind Turbine Generator times – with the United States of America and China at manufacturing. In this Business Unit, the operating margin the forefront – have recognized wind’s potential, and they reached a 40% annual growth rate in the period. Its are promoting initiatives to develop wind energy, including performance in the past year took sales to 3,684 MWe, associated economic assignments. Gamesa is catching this doubling the 1,783 MW starting reference for 2006-2008. train from a position in the vanguard, thanks to its Improvements in customer delivery compliance, thanks to international presence and consolidation throughout the improved component supply synchronization and last three years in these strategic markets, where as of 2008 our production facilities were fully operational and reduced cycle times, have been fundamental to achieving we have added 3,600 employees. People – their creativity these results. International markets grew to 61% of sales and initiative – sustain Gamesa’s development. Thus, their and efforts in technology development remained a priority: health and safety are a priority. Also a component in in 2008, a most significant milestone was the assembly measuring our success, this priority allowed us to reduce of the new G10X product platform prototype at a wind by 54 % the frequency of accidents causing absence, taking farm. This 4.5 MW Wind Turbine Generator is the largest us closer to our objective of “zero accidents”, because built in Spain and constitutes an innovation leap, keeping health and safety are a pillar of the Energyculture. Gamesa at the vanguard in its sector. In the last year, we have practically doubled our order Strategically complementing this focus, in 2008 the Wind portfolio, with 5,500 new MW, of which the largest order Farm Promotion & Sales Unit initiated its new path to value in the sector’s history – a 4,500 MW agreement signed creation. Growth in installations allowed this activity to with Iberdrola Renovables – is especially noteworthy. achieve in the last three years a volume equivalent to total Nevertheless, and despite the fact that the Corporation MW developed in the previous decade. In 2006-2008, more has visibility on an order portfolio with a total volume of than 450 MW per year were started up. Value creation at 11,700 MW through 2012, we are far from satisfied. For this Business Unit will be furthered during the new phase Gamesa, being in the vanguard continues to mean a capacity in the Corporation’s transformation, as designed for 2009- to create through innovation. This holds true more than 2011 and culminating in 2011. The linchpin of this new Gamesa >Sustainability Report 2008 LETTER FROM THE CHAIRMAN ever when demand contracts due to financial difficulties meticulous in our day-to-day performance: capable of facing any productive activities and when supply increases, responding to peaks in demand and flexible enough to as is the current situation. In this context, once again, the adjust output during valleys along the curve caused by the response is continuous improvement. Firstly, through financial crisis. 2009 is the first year in a new transformation technological innovation – with Gamesa’s G10X 4.5 MW as phase for Gamesa Corporación Tecnologíca, and it will be the most evident output.