ON 26 RN by Peninsula Press

Energy without limits june | july 2012 N潞26

THE BIG INTERVIEW

Ant贸nio Mexia

The winning strategy for the next few years

WHO IS WHO Masaaki Imai

Founder of the Kaizen Institute

WINDFLOAT

EDP inaugurates offshore wind floating unit

renovรกveis

EDP Renewables is a global leader in the renewable energy sector. Powered by nature and our commitment to our communities and the environment, EDPR promotes sustainable development as we generate the energy of tomorrow.

www.edpr.com

edp_220x300_en.indd 1

19/06/12 18:32

editorial

Everyone´s EDP

ince 2006, EDP has developed a strategic project that distanced the company from the rest of the industry. The goal, rather focused and ambitious, was to achieve a leadership position in the areas of renewable and hydric energies. “This made our history different and allowed us to anticipate market trends,” as António Mexia stated in a Big Interview to be carefully read in this issue. Right now, we are the third largest in the world in wind and we have the largest hydric project in Europe. Today, we are a company present in 13 countries with people from 29 different nationalities. For the next three years, the bar is raised further: investment in new wind energy markets, strong investment in dams in Portugal and a greater exposure in Brazil. These are the main vectors of EDP’s new Business Plan that you’ll encounter, in general strokes, in this issue. The liberalization of the energy market in Portugal is a hot topic and a challenge for EDP. We have reached the moment of truth regulated tariffs have ceased to exist and electricity and natural gas customers have to choose their supplier. EDP Comercial is EDP’s commercial arm operating in the liberalized market. More than ever, EDP has to invest in the development and communication of its commercial products and its positioning as a close-at-hand brand, affable and trustworthy. It is from this mix that “Casa Total” 10 +2 (Total Home Campaign) combines a new supply (natural gas + electricity) offering at a discount of 10 and 2%, respectively, with human communication. The concept “discounts on gas and electricity are very welcome” invites Portuguese citizens to open their doors to EDP discounts. We want to be the choice of all Portuguese and that is why we have prepared new campaigns with commercial offers, and partnerships with renowned brands, incorporating the growing trend of corporate communication, ever more commercial.

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by Paulo Campos Costa Brand and Communications Manager

More than ever, EDP has to invest in the development and communication of its commercial offer and its positioning as a close-at-hand brand, affable and trustworthy.

Energia sem limites junho | julho 2012 Nº26

june | july

EM GRANDE ENTREVISTA

António Mexia

A estratégia vencedora para os próximos anos

QUEM É QUEM Masaaki Imai

Fundador do Kaizen Institute

WINDFLOAT

EDP inaugura eólica offshore flutuante

On Investor Day EDP’s General and Supervisory Board presented the company’s Business Plan. We give you here the strategies chosen for the next three years.

COVER Investment in new wind energy markets, strong investment in dams in Portugal and increased exposure in Brazil are the biggest bets of EDP’s new Business Plan.

EDP ON IS A BIMONTHLY EDITION Property of EDP - Energias de Portugal, Main office: Praça Marquês de Pombal, 12, 1250-162 Lisboa tel: 210 012 680 fax: 210 012 910 gm@edp.pt Director Paulo Campos Costa

PUBLISHER PENÍNSULA PRESS SL / RUA DOS CORREEIROS 120, 4º ESQ / 1100-168 LISBOA EXECUTIVE DIRECTOR STELLA KLAUHS INFO@PENINSULA-PRESS.COM REDACTED BY EDUARDO MARINO (EDITOR), JOANA PERES (REDACTOR) ART MARTA CONCEIÇÃO, NUNO F. BARBOSA PHOTOGRAPHY HUGO GAMBOA, JOÃO REIS AND ADELINO OLIVEIRA REVIEW ANA GODINHO EDP COORDENATION MARGARIDA GLÓRIA | FREE DISTRIBUTION IN PORTUGAL — 23.000 COPIES; SPAIN — 2.000 COPIES; BRAZIL — 2.500 COPIES | LISGRÁFICA - IMPRESSÃO E ARTES GRÁFICAS, RUA CONSIGLIERI PEDROSO, Nº. 90, CASAL DE STA. LEOPOLDINA, 2730-053 BARCARENA - PORTUGAL. TEL +351 21 434 54 00 (MAIN); FAX +351 214 345 494 E.R.C. - REGISTRATION EXEMPT, PER DECREE 8/6, SECTION 12, N.1-A

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index

INNOVATION

Windfloat: The first offshore floating wind platform of the European Union was inaugurated.

FORUM edpon asks: What are your plans for vacation this year?

STOCK

MARKET EDP acquired 40 percent interest in Arquiled. Interview with the founder of this startup.

C U LT U R E E D P

IN DISCUSSION

Ethics at EDP: a worldwide study case.

what we can do to foster entrepreneurship within companies?

CAUSES

OUR ENERGY

SPOTLIGHT António Mexia outlines the company’s goals for the coming year and highlights the importance of employee contribution for the Group to continue to achieve the expected results.

WHO IS WHO Meet Masaaki Imai, founder of the Kaizen Institute.

PHOTOGRAPHIC ESSAY The new EDP Headquarters in Porto, seen through the lens of our co-worker Filipe Pessoa Neto.

IN FOCUS José Novais Gonçalves, EDP Comercial’s Business Planning and Oversight (DPCN) Manager.

edpon 5

Forum Vacation - EDP ASKS As much as we like to work — and we love it here at EDP — there always comes that time of year when we need to disconnect from the routine, turn off the daily hustle and bustle, and change our “chip,” our mood and our clothing. Vacations are a special time in everyone’s life — a time to relax, renew our strength, and spend time, money and energy on things that aren´t work-related. They’re also great opportunities to take care of our personal life, make plans and slow down.

ON WANTS TO KNOW: HOW ARE YOU GOING TO SPEND YOUR VACATION THIS YEAR? We obtained 236 answers. 29.4%

25%

PORTUGAL

22% 20.5%

20.7%

SPAIN 18.2% 16.7%

17.4%

BRAZIL

16.7%

15.9%

11.4%

10.9% 8.7%

8.3%

8.3% 5.3% 3.3%

4.5%

4.3%

5.4%

1.5% I’m spending vacation at home with my family.

I do not have anything planned yet.

0.8%

0% I just want to go to the beach.

I am going to take a trip abroad.

I’ll take this opportunity to take some classes.

I’ll opt for rural tourism.

I’ll grab the car and visit other cities in my country.

I will not take vacation.

0% 0%

I’ll try new ways to vacation, or do a home exchange vacation, or couchsurfing.

C O M M EN T S “I am fortunate to work in this great company with all its challenges and opportunities, which hopefully will allow me and my family to enjoy something that is becoming rare in Portugal: to travel and visit other places and other cultures.” “I’ll spend vacation with my family in our country home; it is the best place in the world!” “I’ll opt for a one-week home exchange, this time in Dublin, Ireland.” “In addition to traveling abroad with friends, I often spend two weeks with my family in the Algarve. These days give us a wonderful

time together, and I don’t ever give them up. Of course I always take a briefcase with me, but I don’t always open it.” “My children’s education includes their participation in the ‘Erasmus Program’. This year, my daughter will go to Italy so we are taking a family trip there.” “I’ll take my usual vacation with my family.” “I’ll try to learn a little about Brazil, where EDP has a presence and possesses some dynamic interests, and where I would like to work for EDP, a company I both cherish and admire. Who

knows, maybe they’ll give me that opportunity...?” “Driving through Canada to Nova Scotia, Newfoundland, Labrador and Quebec.” “I own a second home near the beach, so I will spend two weeks there on vacation.” “Three weeks camping in the Ribeira do Tomão in Castelo Bode, a place under the guidance of EDP’s Staff Club. It’s a peaceful place where we find well-deserved rest. Year after year the improvements are visible. EDP Staff Club, congratulations.”

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“I go with my family to the Algarve to relax in a beach environment. The ocean is very relaxing.” “I would also like to visit one or two dams, as neither my family nor I have ever visited one.” “I haven’t had a vacation since 2007. With a one-salary household and three children to support, it is hard to make a decision to spend money, which I will need in the future. Every year I tell myself ‘I’ll invest in my health and enjoy a vacation, but I think that this year I’ll end up doing the same thing.” “I’ll go on an Interrail trip in northern Portugal for two weeks.”

12 20 /05 12 /0 20 /05 2 1 / 20 2/0 03 1 5/ 20 2/0 04 12 5/ 20 /05 07 12 /0 20 /05 8 1 / 20 2/0 09 1 5 20 2/0 /10 1 5 20 2/0 /11 1 5/ 20 2/0 14 1 5/ 20 2/0 15 1 5/ 20 2/0 16 1 5 20 2/0 /17 1 5 20 2/0 /18 1 5/ 20 2/0 21 1 5 20 2/0 /22 1 5 20 2/0 /23 1 5 20 2/0 /24 1 5 20 2/0 /25 1 5 20 2/0 /28 1 5 20 2/0 /29 1 5 20 2/0 /30 1 5 20 2/0 /31 1 6 20 2/0 /01 1 6/ 20 2/0 04 1 6/ 20 2/0 05 1 6 20 2/0 /06 1 6 20 2/0 /07 12 6/0 20 /0 8 1 6 20 2/0 /11 1 6 20 2/0 /12 12 6/ 20 /0 13 1 6 20 2/0 /14 1 6 20 2/0 /15 12 6/ 20 /0 18 1 6 20 2/0 /19 1 6 20 2/0 /20 12 6/ 20 /0 21 1 6/ 20 2/0 22 1 6 20 2/0 /25 1 6 20 2/0 /26 12 6/ 20 /06 27 12 /2 /0 8 6/ 29

20 20 12 20 /05 12 /0 20 /05 2 12 /0 3 20 /05 12 /0 4 20 /05 12 /0 7 20 /05 12 /0 8 20 /05 12 /0 20 /0 9 12 5/1 20 /0 0 12 5/ 1 20 /05 1 1 /1 20 2/0 4 12 5/ 1 20 /05 5 1 /1 20 2/0 6 12 5/1 20 /0 7 1 5/ 20 2/0 18 12 5/ 20 /05 21 12 /2 20 /05 2 12 /2 20 /0 3 12 5/2 20 /05 4 1 / 20 2/0 25 1 5 20 2/0 /28 1 5 20 2/0 /29 12 5/ 20 /05 30 1 / 20 2/0 31 1 6/ 20 2/0 01 1 6/ 20 2/0 04 1 6/ 20 2/0 05 12 6/ 20 /06 06 12 /0 20 /06 8 1 / 20 2/0 11 1 6 20 2/0 /12 1 6 20 2/0 /13 1 6/ 20 2/0 14 1 6/ 20 2/0 15 12 6/ 1 20 /06 8 1 /1 20 2/0 9 1 6/ 20 2/0 20 1 6/ 20 2/0 21 1 6 20 2/0 /22 1 6 20 2/0 /25 1 6/ 20 2/0 26 1 6/ 20 2/0 27 12 6/2 /0 8 6/ 29

20 1 20 2/0 12 5/0 20 /0 1 1 5/ 20 2/0 02 12 5/ 20 /0 03 1 5/ 20 2/0 04 1 5 20 2/0 /07 1 5 20 2/0 /08 12 5/ 20 /0 09 1 5/ 20 2/0 10 12 5/ 20 /05 11 1 / 20 2/0 14 1 5 20 2/0 /15 1 5 20 2/0 /16 12 5/ 20 /0 17 1 5/ 20 2/0 18 1 5 20 2/0 /21 1 5 20 2/0 /22 1 5/ 20 2/0 24 1 5/ 20 2/0 25 1 5 20 2/0 /28 1 5/ 20 2/05 29 1 / 20 2/0 30 1 5/ 20 2/0 31 1 6/ 20 2/0 01 1 6/ 20 2/0 04 1 6/ 20 2/0 05 1 6/ 20 2/0 06 1 6/ 20 2/0 07 1 6/ 20 2/0 08 1 6 20 2/0 /11 12 6/ 20 /06 12 1 / 20 2/0 13 1 6 20 2/0 /14 1 6 20 2/0 /15 1 6 20 2/0 /18 1 6/ 20 2/0 19 1 6/ 20 2/0 20 1 6 20 2/0 /21 1 6 20 2/0 /22 1 6 20 2/0 /25 1 6 20 2/0 /26 12 6/ 20 /0 27 12 6/2 /0 8 6/ 29

Stock Analyst´s recommendations 2,5

4,0

3,0

2,0

2.27

12.40

Portugal In euros

2,0

1.92

1,5

Brasil

In Reais

13.75 12.89

Renewables

3,5

In Euros

3.52

2.60

1,5

1,0

1.86

1.66

1,0

0,5

0,0

ANALYST´S RECOMMENDATIONS

2,5

0,5

0,0

Analyst Recommendation Target Price Date

Goldman Sachs International Neutral 2.70€ 18-06-2012

Deutsche Securities Hold 2.40€ 08-06-2012

Exane BNP Paribas Underperform 1.90€ 25-05-2012

Merrill Lynch Buy 2.40€ 25-05-2012

Citigroup Neutral 1.82€ 25-05-2012

Cheuvreux Outperform 2.89€ 24-05-2012

Santander Underweight 2.75€ 24-05-2012

Morgan Stanley Overweight 2.60€ 24-05-2012

BPI - Banco Português de Investimento Buy 2.60€ 24-05-2012

NATIXIS Securities

Neutral

1.95€

24-05-2012

Millennium BCP

Buy

2.85€

23-05-2012

Société Générale

Hold

2.30€

22-05-2012

N+1

Neutral

2.40€

18-05-2012

Fidentiis

Buy

2.49€

07-05-2012

Hammer Partners

Sell

2.15€

22-03-2012

UBS - Investment Research Neutral

2.50€

16-03-2012

edpon 7

Market The most efficient methods and the values that serve as example

EDP VENTURES AND ARQUILED

The perfect marriage In 2010, EDP Ventures decided to buy 40% of Arquiled’s capital. Today, this startup has put Portugal on the map of lighting products.

afael Santos and António Ferreira, the founders of Arquiled, worked in the same professional arena (theater lighting) when in 2005 they decided to start their own business. They bet on the LED (Light Emitting Diode) technology to battle the crisis that has faced Portugal since 2002. It was not easy to prove that it was efficient as the technology was taking its first steps, but the Casino Lisboa project opened its doors and became the living proof that LED is here to stay and that it is highly profitable. In 2011, the company had revenues of 3.4 million Euros and internationalization is now a reality.

How did Arquiled in 2002 convince investors of LED technology’s potential?

We looked for projects that could incorporate the LED technology. It was not easy to convince investors, at least until we had the opportunity to design, develop and install lighting in the lounge at the Casino Lisboa. It is one of our most significant projects, and it is also the largest LED technology project: it concentrated 1.2 million LEDs in the same space. It also has one important characteristic: durability. Today, the Casino is proof that this technology lasts longer than we had expected (projected 50,000 hours)—most of the installed LEDs have been in use for almost 60,000 hours of use and they will continue for some time still, if we take into account current known indicators for this technology.

Rafael Santos, CEO and cofounder of Arquiled

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PRODUCT PORTFOLIO ARQUICITY C4-C12 Arquicity is a sustainable response to the issue of energy efficiency in public street lighting. Arquicity has an associated set of sensor modules that allow an optimization of the lighting fixture performance. • Sun Sensor - Cell for measuring the level of ambient light. • Thermal Sensor - Sensor meant to protect the technology, cutting the emission of light when it reaches a temperature threshold. • Tractus Sensor - Module that manages the flow of light on the road in the presence of vehicles and pedestrians. • G Sensor - Sensor that allows the light to turn off automatically if it is knocked down or if it suffers a considerable impact that triggers the system.

After the ‘Casino Lisboa’ project what other projects did you develop?

We contacted designers, architects and engineers nationally to assist them in improving their architecture and energy efficiency projects, which included hotels and shopping centers of reference. We designed several projects for hotels (Sheraton, Plaza, Sana, etc.) and shopping centers (MDC Group, Chamartin, etc. ..). We were able to apply our know-how as “light designers” and as engineers. You managed to draw the attention of EDP Distribuição. What did you develop in partnership with this company?

We built a LED-technology fixture for street lighting out of the premises given to us by EDP Distribuição. During that year we were listening to EDP Distribuição’s people on the field to see what difficulties they encountered. We studied several public lighting standards, and then we developed the Arquicity. For us, it was a premium street lighting product that led to EDP’s interest and, eventually, to being sought by EDP Ventures. The company felt motivated to acquire an interest in our company and thusly help us develop new projects. It was the perfect marriage. How did EDP Ventures’ interest in the company’s capital impacted Arquiled?

EDP Ventures brought a dynamic and a professionalism that Arquiled did not have at the time. Not only did we have alongside EDP the necessary support to develop our business street-lighting areas, but we had the opportunity to become a company of reference in the export market, which was, and is, our major objective.

ARQUIHISTORIC Purposed similarly to Arquicity, this product has the most advanced technology currently available in light sources—SSL technology with LED— combined with a classic image, mostly applicable to public lighting in historical areas. ARQUIWASH Wall washer/beam light with high-efficiency LEDs arranged in a linear fashion. Optimized for use indoors and outdoors, its main function is to illuminate interior or exterior walls or any other application according to the equipment’s optical characteristics. ARQUISTORE The Arquistore light is a LED technology versatile light source using high-brightness SMD LEDs with a wide field of application,

“Even in years of crisis we have business opportunities because our technology saves and reduces costs to anyone investing in it”

At what stage is Arquiled internationalization effort?

We are working on a pilot project for EDP Brazil, in Aparecida, where EDP Group is applying the InovGrid concept. Africa is also a new challenge. Our hub in Mozambique, which we’ll call ArquiledAustral, will allow us to develop business in Southern Africa. Our idea is that within two or three years this will become a reality and that Arquiled may hold a considerable share in that market. We also have concrete plans to enter the U.S. market. Despite numerous advantages, LED technology does continue to be expensive?

The great advantages of this technology are the energy savings they provide. Even in situations where no power management control exists LED technology saves 50% energy compared to any light source; with the use of management systems it can reach 95% in energy savings. A good example is the traffic lights, an area in which we have had a large pilot project in Lisbon over the last two years, between the Marquês de Pombal edpon 9

which includes lights for retail shops, eateries, warehouses and offices. ARQUIWAY The Arquiway series is intended to continuously illuminate great distances (parking lots/garages, pedestrian corridors, commercial areas, etc.). ARQUITRAFFIC LED technology lighting for use in traffic illumination, replacing the traditional incandescent lights. This technology was developed to work in existing infrastructures. It is provided with a control system regulating the luminous flow according to the ambient brightness (SunSensor). www.arquiled.pt

Plaza and Praça do Comércio Plaza. There we are using ArquiTraffic fixtures with an autonomous and intelligent management system—these fixtures possess a sensor that measures the flow of sunlight and that, depending on the level of brightness increases or lessens the brightness in the light signal. What projects would you like to develop in the future?

We want to specialize in areas that the market requires us to act as lighting specialists in industrial and automotive lighting. At this point, we have been invited by a renowned motorcycles brand to draw an optical apparatus for motorbikes, a project that we have completed (we have been approved for use in Europe). Another area that we want to invest in is in the architectural arena, a part of our corporate DNA.

What is the company’s annual revenue?

This past year we reached 3.4 million euros in revenue, and we expect to reach 5 million in the current year. Even in years of crisis we have business opportunities because our technology saves and reduces costs to anyone investing in it. Do you believe that LED technology will succeed in the short-term?

It is already a reality. Two years ago at the Light + Building (international architecture, lighting and intelligent building show) Exhibition, 90% of the lighting in the fair grounds was still conventional technology, this year it was 90% LED. An inversion occurred in two years. I would say, LED technology is here to stay!

market

EDP NEW COMMUNITY

EDP EMS: a new messaging platform EDP already has a corporate messaging platform that allows it to send SMS, MMS and emails to customers with personalized information regarding EDP services. In 2011, during the first four months of use, this platform handled over one million messages. This tool offers a paradigm shift in the way that the Group designs the services it renders and also in how this technology can be used to enrich our relationship with customers. The edp EMS Project, part of the Sharedp Program, was launched June 2011. Three months later, on September 1, the Iberian messaging platform started operating. The success of this project, led by EDP Soluções Comerciais (EDP SC), was due to the strong commitment and efforts of the different teams: ecustomer, DI, Lógica and Link. EDP SC began sending messages to residential low-voltage customers offering three priority services:

> Reading Request – the message is sent on behalf of EDP Distribuição; > Electronic Invoice – the message is sent on behalf of retailers, EDP Serviço Universal and EDP Comercial, who act proactively when the e-mail with the invoice is not delivered to the customer by providing payment information to customers; > Disconnection notice – the message is sent on behalf of EDP Serviço Universal stating that the payment deadline expires the next day and reminding customers how to pay bill at an ATM machine. This platform has given the Group a very efficient communication channel with customers. About 50% of customers provide a reading after receiving the SMS, and, as early as September 2011, we noticed a 10% reduction in the costs associated with disconnection orders.

+ Project Director: Leila Ione (EDPSC) Project Manager: António Lisboa (DSI) PMO: Nuno Lima (DSI) Project Manager: João Ribeiro (Logica) Project Manager: Sandra Mendes (LINK)

Equipa Ecustomer: Ione Leila (leader); Anabela Henriques Silva; Isabel Pacheco; Luís Filipe Serôdio; Marta Belo

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In the edp community the customer finds a network of partners that offer discounts for just about everything from their day-to-day purchases to leisure activities. They are small businesses encompassing several areas of activity that customers can find in their neighborhood, workplace, the streets travel through every day, as well as established nationwide companies. In addition to these discounts, which you can enjoy whenever you want, the customer can also receive movie tickets and other surprises. Customers also have access to a range of features on the new site (www.comunidade. edp.pt) that allows them to receive notifications, promotions and news about their favorite partners, energy efficiency tips and access to the new edp digital client card, using an innovative application that lets customers stop using their other client cards. In May, a mailing was sent soliciting the participation of small businesses as edp community partners, reinforcing and enhancing the benefits of belonging to the community by becoming a member then. The community has also developed an edp sticker using QR Code technology, whose objective is to aid in the identification of all partners, and let customers know in an innovative and immediate way, the discounts, promotions and news of the establishment where the sticker is placed.

market

INVESTOR RELATIONS AWARD EDP was recognized by IR Magazine 2012 Europe Awards in the categories of best company in the area of investor relations, in Portugal, and among European utilities. This annual event promotes excellence and international leadership in the area of investor relations, bringing together industry leaders from across Europe.

But it wasn’t only the relationship with investors that was highlighted: EDP Renováveis also received recognition distinction in the category of alternative energies in Europe. These awards recognize individuals and companies that have shown excellent performance in their results over the

More than 170,000 natural gas supply points in Cantabria

past 12 months. The winners are chosen through electronic or phone surveys to integrate a universe of over 500 analysts (sell-side and buy-side) and European portfolio managers. The transparent and independent methodology adopted by IR Magazine has become a world reference.

In January, Naturgas Energía, under the HC Energy brand, surpassed the 170,000 natural gas supply points in Cantabria and 20,000 electricity customers, in addition to the 38,000 Serviço Funciona domestic gas and electricity facilities maintenance service customers. This is an important milestone for the company that began operating in the gas and electricity market in Cantabria in January 2010. With this number of supply points, Cantabria is above the national average in terms of the gasification level by counting 28 delivery points per 100 inhabitants, compared to 15 delivery points on average in Spain. Compared with the number of dwellings, the level of penetration in the gas market is about 70 percent of households, a rather high rate. Currently, the 44 largest municipalities in Cantabria have access to natural gas. “This growth was possible,” said José Alonso, Director for Cantabria, “thanks to the growing culture of gas usage among the population that demands this kind of power over other alternatives, both for domestic consumption and commercial or industrial use.” Cantabria today possesses an extensive gas network with a total of 1,712 kilometers in gas pipelines of different pressures, which are adjusted to the needs of all customers.

CAMPAIGN PHOTOVOLTAIC SOLAR MINIGENERATION After the positive results obtained by micro-generation residential segment campaigns, EDP Serviços is now betting on spreading the word about its mini-generation offer. A photovoltaic solar mini-generation campaign targeting companies and business segments was recently launched with the “An investment as brilliant as the sun” slogan. The campaign consists of a mailing to potential customers describing the benefits of becoming an edp mini-producer. Photovoltaic solar

mini-generation is the production of solar energy mainly by companies through the use of small-scale systems, including photovoltaic solar panels. The edp mini-generation offers appropriate solutions to each specific customer as well as extra services, such as system maintenance and monitoring and the communication opportunity for companies wishing to publicize their commitment to environmental sustainability. edpon 11

edpculture The most efficient methods and the values that serve as example

ETHICS AT EDP

A WORLDWIDE CASE STUDY EDP joined the select group of the world’s 145 most ethical companies. The company received recognition for its effort in promoting ethics throughout the Group.

DP was one of only three companies in the electricity sector to join the World’s 145 Most Ethical Companies, an honor bestowed by the Ethisphere Institute, which analyzed companies in over 100 countries covering 36 business sectors. This ranking recognizes leadership in promoting ethical business practices and looks at a company’s codes of ethics, investment in innovation and sustainable business practices, corporate civic activities, and opinions of top management and peers, suppliers and customers in a certain business sector. For António Mexia, President of the

Executive Board of Directors, “ethics at EDP is not a matter of conscience. It’s what separates the companies that win from those that do not. EDP’s position is based on practicing full transparency in setting objectives, communicating with its stakeholders and the adoption of values from which we do not abdicate. It’s a real question of consistency.” EDP’s éticaedp program, which was implemented throughout all company geographies, May 2009 through September 2011, emphasized the motto “we are what we do.” After the program came to an end, a case study was prepared in partnership with 12 edpon

Universidade Católica (Catholic University) and Inspire with the objective of evaluating the training program’s effectiveness, outlining future actions and sharing, with the community the company’s experience on this internal reflection. However, EDP wanted to go further. Voluntarily, we agreed to undergo a global assessment to evaluate the entire trajectory traveled until that moment, and discover new ways to improve. A trajectory that opened the doors to EDP becoming a member of Ethisphere Institute’s restricted group of the World’s 145 Most Ethical Companies.

+ ETHICS INITIATIVES • Support initiatives to disseminate best practices in business ethics with the academic and business communities; • Conduct an analysis on the maturity level of the Ethics management system issues through international benchmarking initiatives, namely using the Ethisphere Institute’s rating methodologies. • Establish a Cooperation Protocol with an external institution to create a training module on Business Ethics, which could consolidate and disseminate knowledge about this topic in the business arena and, simultaneously, provide advanced training to EDP employees on the subject of ethics. Thusly, in 2011 we established the Protocol between EDP and EASA, School of Management and Business, which led to the creation of the “Ethics in Business and Society” chair, under the guidance of Professor Raul Dinis.

PITA DE ABREU

This EDP Group Director stresses the importance of a company with “character,” built by people with integrity and respect for ethical values EDP is a member of the most ethical companies in the world. In the current context of crisis, what is the relevance of a topic like ethics and integrity in business? The visible face of business is built by its stakeholders, and in particular by its direct and indirect employees. These are the men and women who through their posturing, cultural practices and behaviors solidify the company’s “character.” This “character” is the main driver of behavior. Its “quality” becomes even more important the more we are surrounded by an environment of confusion and uncertainty. When our values become dull or blurry it is our “character” that tends to lead us, just like an “autopilot” to “good behavior.” Therefore, integrity and ethics are two fundamental components of “character”. The internalization of these values and the resulting daily practice is very important to ensure the sustainability of companies and business in a world that we wish to be “a good place to live.” In times of crisis when dilemmas and tensions emerge, it becomes crucial

to be a company with “character,” made up of people with integrity. We truly value this at EDP, and we have a sense of accomplishment when it is recognized externally, as the Ethisphere Institute recently did. In your opinion, what are the future challenges for developing the ethical theme in EDP’s culture? Just like in people, for a company to have integrity and respect ethical values it is a matter of upbringing and, therefore, learning, living with “good examples” of incentives and punishments is tantamount. These are the vectors that we have to work with. In practice, we will have to revisit the EDP’s Code of Ethics and Code of Conduct, covering our activities and business units with greater specificity, introducing adjustments and additions that have proved necessary. We will have to, from the hierarchic top down, point out that in all cases we opted for more “ethical” solutions, i.e., we must encourage that there will always be good examples. We will also have to determine where there is doubt about the proper conduct in any process. edpon 13

If there are any inconsistencies, we will act with justice, but without complacency. Finally, we will have to work with all other stakeholders, including equipment or services vendors to ensure the appropriate correction of any bad practices. EDP has reached some maturity in its ethical process. To share it with the community can be a plus for everyone. Is it against this background that the Business Ethics Chair that was launched by EASA and EDP fits? The support for the launch of the Ethics Chair certainly represents an affirmation of the shared practices in which we believe, and our openness to the contribution of others in the internal consolidation of these convictions. The implementation of the “EDP Ethics” program gave rise to a “case study,” released throughout the company and externally, as well. This program resulted in a set of recommended objectives: to grow and keep alive the issue of ethics at EDP, and respond to requests from program participants.

edp culture

EDP shines in Marketeer awards Paulo Campos Costa, EDP Group’s Brand and Communications Manager was recognized for his work in the area of communication with the Marketeer of the Year Award at the 4th Marketeer Magazine Awards. EDP also shone with the unprecedented Energia Douro (Douro Energy) concert that took place on a floating stage on the waters of the Douro River in 2011, an event that won the Energy Award. These awards recognize the company’s performance in the field of Communication and Social Responsibility. The Desafio Global Ativism (Ativism Global Challenge) agency, which organized the Energy Douro concert, won the award in the Entertainment & Events category. The awards were presented in 18 different categories, targeting 2011’s best companies in the sectors of Automotive, Banking, Distribution / Retail, vEnergia, Media, Tourism, among others, and in areas such as Communication Agencies, Advertising Agencies and Branding.

Networks and Customers Departments join in unprecedented meeting EDP Distribuição’s six Networks and Clients departments met for the first time in Vila Franca de Xira this past April to share experiences and assess their course of action. The initiative, under the “The passion to do well” theme, was attended by 500 employees who, according to João Torres, EDP Distribuição’s President, are the “heirs to the history of electrification in Portugal.” During the morning, participants discussed diverse issues such as, prevention and security, foreign relations, commercial assistance, network studies, operational areas and management support, followed by a lively discussion with renowned chef José Avillez, who discussed his professional experience and left a message focusing on what is important in any activity: “The ability to believe

in ourselves, the commitment to do things with passion, seeking perfection, and adopting a principle: always finish what you start.” The afternoon sessions included all staff responsible for Network and Customer Departments, followed by another panel attended by the managers of the Dispatch and Driving, Maintenance, Project and Construction, Energy Management and Planning Departments. The proceedings were closed by Martins da Costa, Director, who reinforced the fact that EDP Distribuição is an essential asset to the Group. He also said that although the company has gone global, its headquarters remain in Portugal. “It is very important that EDP is woven into the social fabric of our country, where its activity is the key to all decisions,” he added.

14 edpon

edp culture

EDP Renováveis

In the list of the Best Companies in Spain EDPR was considered the 6th Best Company to work for, according to the study conducted in 2012 by the “Great Place to Work®” in Spain, which chose the top 50 companies after evaluating 250 businesses. This annual survey is based on data furnished by more than 10 million employees in 45 countries, representing over 5,500 organizations across different industries. In the list of Spain’s 50 Best Companies to Work For, the average Confidence Index score is 80 points, and the level of absenteeism dropped to 1.77%. The best workplaces are built through day-to-day relationships that employees experience –not through a list of programs and benefits. Employees believe that they work for a great organization when, consistently, they trust the people who run them, take pride in what they do and appreciate the people with whom they work.

EDP WINS “PREVER” AWARD EDP, represented by EDP Valor’s Safety and Health at Work Team, was awarded the 2011 Prevención Prever International Prize. One of the oldest and most prestigious awards in Spain, created in 1998, it is a reference not only in Spain but also in the European Union. The Prever Awards are awarded annually by the Consejo General de Relaciones Relaciones Industriales and Licenciados en Ciencias del Trabajo in Spain to companies that, in the preceding year, were highlighted by their work towards the prevention of occupational risks within and outside Spain. The award presented to EDP was given to Sérgio Manuel, Director of EDP Valor’s Health and Safety Area, by D. Gabino de Lorenzo, former mayor of Oviedo and the Spanish Government’s Delegate in Asturias, at a ceremony held during the 13th Technical Days of the 2011 Prevención Prever event, at the Prince Felipe Auditorium in Oviedo, on the 31st of March.

EDP Distribuição: better quality of service and fewer complaints EDP Distribuição controlled its OPEX and CAPEX, and substantially improved the quality of service (the TIEPI MT was 75 minutes), reducing complaints, albeit this past year the consumption or connections decreased versus 2010’s. These were some of the conclusions when the higher echelons of EDP’s Distribuição macrostructure met in Lisbon, on March 2, where a review of 2011 was made and a preview of the challenges for the current year. EDP Distribuição’s Chairman of the Board of Directors, João Torres, considered 2011 a very positive year for the company and the Group. It was a year in which a new tariff-pricing

model was negotiated with ERSE, with important results for the regulatory period beginning in 2012. But it was also a year in which the company received international awards for its quality level in monitoring training projects and also for the InovGrid project the recipient, in London, of the “Utility of the Year” award. This is an EDP Distribuição Star Project-which is now being implemented in Porto, Lamego, São João da Madeira, Marinha Grande, Alcochete and the Ilhas Barreira (Barrier Islands) (Culatra, Farol and Armona) off the Algarve Province, working towards the consolidation of this model.

edpon 15

+ SOME FIGURES: An Investment of

MORE THAN M€ 303 In conservation costs

MORE THAN M€ 129 In distributed power

MORE THAN 46.500GWH (-36% than in 2010) Technical Service Quality

A 75-MINUTE TIEPIMT Per worker

A RATIO OF 1715 CUSTOMERS (UP 14.8% FROM 2010)

EBITDA M€ 641

edp culture

Naturgas in European Association Naturgas Energía, together with 14 other companies, signed the statutes of the GERG (European Gas Research Group), a nonprofit association. Headquartered in Brussels, GERG was founded in 1961 to strengthen the gas sector in the European Union through the promotion of research and technological innovation in all aspects related to natural gas. It currently has 24 affiliates in 13 countries, among which are some of the most important in Europe. It is an institution that encourages any activity related to research in the natural

gas industry relevant to the infrastructure or the use of natural gas at all levels, whether in processing, transportation, distribution or storage. This association, as of now, is run by one President and three Vice-Presidents, of which Naturgas is currently one. GERG is also open to members who are not directly present in the gas business. According to the new bylaws, all members have the same rights and should be represented in the Council.

The training starts now! The coaching program for employees was recently launched by Escola de Desenvolvimento de Diretivos da EDP (EDP’s Directive Development School), a program that seeks to train the strengths in each one of us. In an evermore global, dynamic, young and diverse EDP, it becomes essential to adopt the latest development practices that make a difference for EDP people and, therefore, in the results and consequent business. To listen, to dialogue, to build relationships based on trust, to accept a mistake as a starting point for new learning, to delegate autonomy, giving and receiving feedback, to reduce tensions in the team, these are some examples of behaviors that are apparently simple, but require training. As an integral part of an EDP leader’s responsibilities, coaching is therefore present in training and development at EDP University’s Directives School (Escola de Diretivos da Universidade EDP), it is a part of recurrent

training plans and intended to be common practice in personal and professional development of employees promoted by direct leadership or by internal / external direct coaches. EDP’s coaching philosophy is based on the premise that all employees can have access to personal and professional training that is focused, individualized and tailored to the needs and strengths of each one. Thus, individual potential is stimulated and the obstacles are overcome while promoting improvements in efficiency and performance. In this context, three coaching types of relationship will be strengthened: internal coaching, external coaching, and coaching as a leadership style. Broadly speaking, the Head Coach 16 edpon

focuses on the professional development of his team to achieve business goals set by the organization. Coaching relationships at this level tend to be informal and interwoven with the leader’s and the team’s daily routines. Internal coaching applies to an employee who receives special training from another EDP employee in order to develop skills and incorporate methodologies that enable him to act as a coach to other colleagues. The external coaching relationship is largely similar to internal coaching, however, as its name indicates, the main difference is that the coach is not EDP staff. Coaching will be an important EDP approach over the next few years and the ‘Coach Leader’ bets on EDP leaders. The training starts now!

edp culture

A FINANCIAL REPORT WITH A GOOD GRADE The explicit recognition of the work being developed by all staff involved with the SCIRF (Internal Control System of Financial Reporting) was again recognized by the External Auditor –KPMG— with the publication of the 2nd Independent Report on EDP Group’s Internal

Control System, as a chapter in EDP’s Consolidated Annual Financial Statements. Said Report certified, without reservations, the quality, performance and robustness of our internal control system in line with international Best Practices.

SERVICENOW OFFERS FOUR GREAT FEATURES • INCIDENTS Initiate an incident without having to use the phone or email To order the resolution of an incident concerning a product or service, just click Submit incident and complete the form. To complete the action, click Save.

SERVICENOW:

NO PROBLEMS! Resolving IT problems or requesting computer equipment will be faster from now on. Learn how ServiceNow will make life easier for all EDP Group employees. The application formerly known as PUC-Ponto Único de Contacto (Single Point of Contact) now has a new face and a new name: ServiceNow. With this tool, you can now resolve IT incidents or request computer equipment easily, quickly and efficiently—whenever and wherever you are, at the speed of a click. In place since the beginning of 2012, the Information Systems Director (DSI), in reshaping ServiceNow, invested in improving and simplifying the application with the “goal of promoting its use as the main conduit for all activities related to IT applications”, as pointed out by Pedro Botequilha, its Project Manager. ServiceNow should be, from now, employees’ first choice when requesting the resolution of an incident or any type of service and / or equipment, since by the end of this year, requests and submission of incidents by e-mail will end.

COST-CUTTING

Com o uso frequente desta aplicação, With the frequent use of this application, available on the intranet, employees can control and monitor

their service requests, the status of their job and IT incidents, and may also contribute to a “significant reduction” in costs for EDP. ISD team focused on major changes to its homepage. As Pedro Botequilha said, “the main requirement of the project was always to take into account the perspective of those who will use the tool and we wanted to, through the homepage, promote and present a revamped channel allowing EDP employees to experience its new features and an enjoyable experience. “The launch of ServiceNow is just one of the many actions of a broader project whose main objective is to improve the quality of services provided by ISD employees. This project also provides for the implementation of a communication plan to encourage the use of online tools such as ServiceNow and AMI, an application that allows you to unlock or change your password, without having to use the phone. ServiceNow will also be available soon at HC, NG and EDP Renováveis and it is, in fact, a global tool for interaction with the service desk. edpon 17

• REQUESTS Click to order In the Order area, you may request equipment or services. Select an option - Equipment or Software - and make your request quickly and easily. If these options do not match what you need, select other requests and follow the directions suggested.

• PASSWORD Change Password or Unlock without wasting time To unlock or change your access password is now much easier. This feature allows you to manage your access to EDP’s network and to your computer without wasting time or having to use the phone.

• KNOWLEDGE Knowledge is power In ServiceNow, a complete and functional knowledge base will be available for you to find answers and solutions to your questions. In this area, information and manuals are available for work equipment, templates, applications and other tools.

nnovation

WINDFLOAT

A HC Energíxxxxxmento de energia elétrica, o Redox 2015, que dentro de três anosxxxxxxxxxxxa capacidade.

IS NOW PRODUCING ENERGY

fter five months in the deep sea, WindFloat endured the harsh winter (exposed to waves up to 15 meters high), and it was launched off the beach of Aguçadoura this past June 16. EDP and partners joined the President of the Republic and members of the Cabinet at Póvoa de Varzim to see firsthand a world pioneer project. With WindFloat EDP has reached another rung in the innovation ladder, a technology that not only projects EDP into the deep offshore markets worldwide but that also allows the use of endogenous resources and the reactivation of national

economic sectors. “Identification of the demand for own resources and the value proposition of the collaboration in this project with over 60 companies (40+ Portuguese companies) helped us in our quest for global leadership with the first platform of this kind,” said António Mexia at the opening ceremony , stating that “Windfloat is the outcome of imagination over pure knowledge.” In addition to harnessing the potential of the Portuguese coastal waters WindFloat shows how we can revitalize national infrastructures and knowledge, particularly in shipyards,

18 edpon

The first offshore floating wind platform in the European Union has been inaugurated. It weighs over two thousand tons and it has been installed six kilometers off the coast, possessing a 2MW wind turbine. It has already injected into the grid enough energy to supply the annual consumption needs for 1,300 homes. A 23 million euros investment.

The WindFloat inauguration was attended by the President of the Republic, Cavaco Silva, Minister Assunção Cristas and EDP’s Chairman of the Board, António Mexia.

towards new applications encouraging close cooperation among Portuguese Danish and American companies. At the inauguration ceremony, the President of the Republic, Cavaco Silva, stressed the importance of the project for deepwater wind farming, and its contribution to the reduction on external energy dependence. “We may be taking a giant step in harnessing the potential of the country in offshore wind energy through a project that combines renewable energy with cutting edge technologies, taking advantage of this great natural resource that Portugal possesses—the sea,” he said.

This pilot project will under testing for a period of two years Aguçadoura. This prototype, in operation since December 2011, has already injected into the grid enough energy to supply the annual consumption needs for 1,300 homes. After testing on the 2MW turbine ends the goals are fairly clear: “On a second phase of this project we want to build five platforms with a total capacity of 27 MW, which will be enough to power the needs for 50,000 people,” said António Vidigal, EDP Inovação’s President.

edpon 19

innovation

EDP Starter Where good ideas gain wings

The idea of creating a business incubator at EDP started taking shape in the heads of Carla Pimenta and João Maciel, both EDP Inovação employees. “We realized that in this economic crisis, Portugal is exporting brilliant minds, the ones we need here,” recalls Carla Pimenta. Given this scenario, they concluded that they could help support, in Portugal, young entrepreneurs who have good ideas. “João and I collaborated from the very first EDP Innovation Prize in 2009, evaluated the project and closely followed the most promising ideas. We have in Portugal young people with great potential and great ideas. But when the time comes to put

them in practice a problem arises: many of them do not move forward due to lack of support. We realized that most startups need a springboard to help them grow,” she explains. The EDP Group supported their idea, and today EDP Starter is a reality. ACCELERATING In Sacavém, the space already houses four startups—three physically, and a virtually one in Porto, which make up our virtual incubation program. EDP Starter is not just a physical space providing a ceiling, tables, chairs, telephones and Internet. It is also an accelerator, namely a means of accelerating companies to better prepare their entry into 20 edpon

the market.” Companies here are benefiting from a close proximity to the EDP ecosystem and all the advantages associated with it. An excellent network of contacts in the energy sector allows us, for example, to unblock a meeting with the right person to help with a specific problem. Furthermore, EDP Starter includes a group of partners who give full throttle to these startups. “The idea is always the same: do a ‘work in progress’ with them. These are companies that will soon seek new investors, a phase of this initiative that is attractive to EDP Ventures, EDP’s Venture Capital Fund. EDP Starter is, thusly, an investment in a longterm relationship. “

innovation

In order to bring together businesses, consumers and investors in the development of products and services typically generated in startups, EDP created EDP Starter. An innovative concept of business incubation in the area of energy, which claims to be an accelerator for great ideas for small businesses.

+ WHAT EDP STARTER PROVIDES • Close contact with EDP, in particular in the areas of Innovation, Engineering and Corporate Venture Capital;

PREPARING CEOs Besides speeding up the good ideas, EDP Starter also provides useful tools for the future of young entrepreneurs. It will provide workshops and seminars, particularly in the areas of management, negotiation and leadership. “It is important that young entrepreneurs start to first develop management skills critical to business success. Basically, we are preparing company CEOs. It is vital to invest strongly in other areas beyond engineering, typically the basic training of these young people. In order to join the accelerated EDP Starter program, it is not enough to have an innovative

idea. “We look for startups that are in an advanced phase of development. They have to have an idea with great potential and consistency that can be implemented quickly,” she explains. If you are interested in giving wings to your ideas soon, just contact EDP Starter by email and send us your project for evaluation.

• Privileged access to FabLabEDP – a laboratory of rapid prototyping created within MIT;

TO LEARN MORE GO TO:

• Access to entrepreneur training in key areas.

www.edpstarter.edpinovacao.com edpon 21

• Access to experts and laboratory facilities in electrical, electromechanical, chemical, metrology and other areas; • Access to an entrepreneurship network consisting of large companies/ clients in the areas of energy, angel investing, venture capital funds, universities, etc.;

innovation

LABELEC AND FUNDACIÓN TECNALIA (TECNALIA FOUNDATION)

SMART PARTNERSHIP Labelec and Fundación Tecnalia (a laboratory organization based in Bilbao) signed a partnership for the purpose of testing smart meters to be acquired by EDP (with exception of those intended for the Spanish market). Given that the electricity market is becoming more and more competitive, it is particularly relevant that utilities companies choose more efficient, reliable, and secure technological solutions that complement

the supply of electricity along with other services that are perceived by customers as differentiators, and that allow them to become active agents in the management of their own energy consumption. Included in this type of services are those supported in the information provided by smart meters and which control in-home products, flexible tariff options, consumption modulation, better quality of service, etc... The partnership now established

with Tecnalia is consistent with the enhancement of skills at Labelec, allowing this company’s Metering Group to receive certification in the DLMS_EDP_Companion Protocol (standard that defines the data model functions and related codes - applicable to the Portuguese market), using for this purpose a tool developed by Tecnalia who is responsible for the obtaining certification for the PRIME communication technology.

REMARKS: NEW “FAVORITES” MANAGER/ http://remarks.edp.pt

We reach more and more for the Internet for information and knowledge to helps us better fulfill our functions. Whether in the form of external sites from universities or companies, social networks and the blogosphere or through internal sites, the World Wide Web has with just one click established itself as the source of knowledge. And what do we normally do with this knowledge? We use it and we keep it to ourselves. Often, we complement this information with personal knowledge (notes, keywords, ...), which we continue to save for our exclusive use managing it with more or less complexity The new platform ‘Remarks’ developed by EDP Inovação offer us a more functional, simpler, friendlier and more intuitive “favorites” manager while encouraging us to share knowledge automatically and anonymously within the EDP community. Saved as “personal favorites” and made available as “favorite edp” - that is how the ‘Remarks’ handle the links, or if you prefer, the Internet addresses. By using ‘Remarks’ as your “favorites” manager, you will be able to enjoy the many features offered in the research and organization of the information and will also be a contributor to EDP’s bank of knowledge. Thus, those who consult the ‘Remarks’ obtain information already cleared and organized by other colleagues. That information has already been helpful to some EDP developer who kept it in his “favorites.” But in this platform, the concept of “favorite” is not limited to Internet addresses. There are other kinds of content that can be shared in the same way. Did you do a presentation that you would like to share with the EDP community? Do you have a document that you consider useful and that you can share to other employees of the Group? From now on, these and other file types can also be shared through the ‘Remarks’ feature. Learn more at http://remarks.edp.pt and start creating your favorites list. 22 edpon

edpCauses Economic capability and social commitment

ORGANIZED BY AND EDPSC AND LABELEC

CHILDREN VISIT EDP’S FABLAB In May, EDP Soluções Comerciais (EDPSC) and Labelec joined forces and wills to offer a visit to EDP FabLab to a group of children between the ages of six and seven. The idea came from Anabela Silva, an EDPSC volunteer and contributor, as part of her participation in the Aprender a Empreender (Learning to Undertake) program developed for first-graders at the Maria da Luz de Deus Ramos EB1 School (Galinheiras - Lisbon). The morning began with the bus departing from the school to EDP FabLab’s premises in Sacavém, a trip in which an extraordinary mood of complicity pervaded, as did the children’s affection towards the teacher and volunteers Anabela, Teresa Paulo and Davide. At the laboratory, Catarina Santos, one of EDP FabLab’s staff who quickly delighted all with her enthusiasm, led the visit. The interest shown by children in seeing and learning all they could about what can be done with the equipment at EDP FabLab was clearly visible. Joy was palpable, even during the lunch hosted by Conceição Santos, a magical moment for everyone. An experience to remember and repeat! 24 edpon

causas

HC TEAMS DONATE MONETARY AWARDS

700 liters of pure extra virgin olive oil

3€ per liter donation of employees

SOLIDARY OLIVE OIL

Seven HC Energía work teams have donated to Non-Governmental Organizations (NGOs) the cash prizes they received for continuous improvement initiatives and the improvement of information management as a tool for greater efficiency. Donations –ranging from 1500 to 2500 euros—were distributed to different institutions. This was the first year that employees could choose organizations to make their donations, and they chose: the Down Syndrome Association, the Principality of Asturias, the Proclade Association, linked to the Coração de María de Gjión School, the Ayuntamiento de Lorca’s Solidarity Account, which manages all aid to those

affected by the earthquake in this town of Murcia; Creo Desarrollo organization, which works in child protection projects in Paraguay; the Asturias Association of Friends of Nature, and the Asturias Ornithological Coordinator. HC Energía has been developing such programs for more than five years, programs that the employees themselves embrace with enthusiasm. Over the years, more than 600 employees have participated in some of these projects. The delivery of funds to NGOs took place at the HC Energía’s headquarters, in the presence of the company’s Chief Executive Officer, Miguel Stilwell D’Andrade.

EDP UNIVERSAL SERVICE OFFERS LIGHT BULBS SAVINGS! This initiative calls for the distribution of 1,000,000 light bulbs to the institutions and families the company supports. Promoted by EDP Serviço Universal, this initiative is part of the EDP ECO Program and is developed in partnership with EDP and ENTRAJUDA, funded under the Plan for Promoting Efficiency in energy consumption approved by the Regulatory Entity Energy Services. The goal is to raise awareness about energy efficiency and to help save on electricity bills. The campaign includes the donation of packages of 40 light bulbs to institutions and 4 light-bulb packages for families. By installing the new bulbs that consume 80% less energy than incandescent bulbs and can last up to eight times more, both institutions and families will reduce costs in their bill. During their life cycle these lamps will save the energy equivalent to that consumed by more than 93,000 Portuguese households in a year, and avoid CO emissions by more than 22,000 tons. Energy costs avoided by this action amount to more than 34 million euros. EDP continues to promote Energy Efficiency through this and other initiatives under the EDP ECO Program, which can be viewed by going to: www.eco.edp.pt edpon 25

Approximately 700 liters of pure extra virgin olive oil from olive trees planted along the Bioener Station in Jaén were transferred to HC Cogeração. HC later made available to all employees the olive oil extracted from those trees. The way it happened was simple: for every liter of olive oil, 3 euros were donated to a social responsibility project. The call for HC Energía’s employees solidarity project was, as always, a success. This initiative generated so much demand that it was necessary to randomly select employees who wished to acquire the solidarity olive oil. Despite demand, all employees were eligible to donate their share when purchasing at least a liter of olive oil.

2012/2015 Business Plan

NEW BUSINESS PLAN BETS ON CLEAN ENERGY

over

CLEAN ENERGY will represent 70 per cent [of all available energy] in three years

EDP RENOVÁVEIS expects to grow 30 percent by 2015. Brazil, Romania and Poland are the geographies that will most contribute to this growth

BET ON DAMS currently with six damn projects in progress, our hydric capacity will grow 42 percent

EDP BRAZIL represents 18% of EDP Group’s EBITDA and 8 percent of our total installed capacity

26 edpon

GREATER INSTALLED CAPACITY installed capacity is expected to grow to 26.4 GW in 2015

PROFITS TO STOCKHOLDERS EBITDA will grow 5 percent by 2015 and shareholders will receive yields between 55 and 65 percent of the profits

PARTNERSHIP WITH CTG will fund EDP’s acquisition of small minority stakes in wind farms to the tune of 2 billion euros

edpon 27

cover

he strategy has been set: investment in new wind energy markets, strong investment in dams in Portugal and greater exposure in Brazil. These are the main vectors of EDP’s new business plan presented to investors this past May 23rd at the Group’s headquarters in Porto, forecasting an annual investment over the next three years of 2.1 billion euros. During the 2012-15 period EDP foresees an average growth in profits between 0 to 5 percent, and an annual dividend yield between 55 and 65 percent of its net results, it should be remembered that in 2011 EDP exceeded the one billion euros profit mark. The company also expects to

be directed to wind energy, 28 percent to the hydric sector in Portugal and the remnant to Brazil. In order to reach these goals EDP considers as fundamental the strategic partnership signed with China Three Gorges (CTG), which will fund EDP’s acquisition of small minority stakes in wind farms, to the tune of 2 billion euros of which the first 800 million euros will be made available up to May 2013. In addition to the funding agreed with CTG, EDP hopes that by 2015, the expansion plan will have allowed the distribution of cash through its operations (free cash-flow), which will exceed one billion euros by 2015.

will be significant exposure with an investment of 700 million reais per year. Between 2012 and 2015, EDP predicts that it will pay out an annual dividend equivalent to 55 and 65 percent of its recurring net income, based on the 2011 yield of 0.185 euro. PORTFOLIO DIVERSIFICATION

EDP will also keep its diversified portfolio as a way to reduce risk. Nuno Alves, a Director of the Group, believes that “the more we manage the geographies where we operate, the more diversified the risk will be and a more balanced EBITDA may

“The expectation is that the installed capacity will increase to 26.4 GW in 2015 from 23.2 GW in 2011, a growth based on investments in clean technologies representing 10 percent more than in 2011.” reduce the net debt to EBITDA (earnings before interest, taxes and amortization) ratio, excluding regulatory assets from the current 4.1x to less than 3x by 2015. Over the next three years, EDP expects an EBITDA average growth of 5%, to about 4.5 to 4.7 million euros—an average annual increase of 5 percent, supported by the growth of new hydric and wind capacity. About 64 percent of the company’s operational budget will

According to the company’s new Business Plan, the expectation is that the installed capacity will increase to 26.4 GW (gigawatts) in 2015 from 23.2 GW in 2011, a growth based on investments in clean technologies - wind and water representing 73 percent of our capacity in four years time, or ten percent more than in 2011. Another strong contributor to this strategy will be Brazil, considered a low-risk profile geography where there 28 edpon

be expected.” According to the Holding’s CFO,” we expect growth to be passed on to shareholders and to EDP in general. This EBITDA growth will allow us, given the decreased operational expenses, to generate more cash and with that extra liquidity get to deduct part of the debt we have today… we will be a stronger company paying a better yield to shareholders.”

cover

STRATEGY IN 4 BULLETS: António Mexia summarized in general terms the strategy of the company until 2015. 1. “Maintaining the company’s low risk profile, a clearly distinctive strategy from the rest of the industry”. 2. “Freeing cash flow and a sufficiency of financial means for a significant de-leveraging”.

A WIN-WIN PARTNERSHIP

EDP’s Business Plan delineates its continuing bet on clean energies, a bet that will be leveraged through the strategic partnership with China Three Gorges: “the business opportunities are such that, together, we will have more advantages. It’s clear we are talking about one of those cases called “win-win situations” because both sides profit from this partnership,” said João Marques da Cruz, an EDP Director. Adding some financial muscle and greater capacity to invest are advantages that this new shareholder brings to EDP: capital needed to meet one of the company’s strategic objectives for the next three years. According to EDP’s Director, Martins da Costa, this means “the ability to finance itself in the future”, or in other words “what is considered the de-leveraging

of the company’s Balance Sheet: debt containment.” As part of the commitment to clean energy, hydric investment continues to be one of the company’s strengths. Currently, EDP has six projects under way. By 2015, our hydric capacity is expected to grow by 42 percent. According to Pita de Abreu, it is very meaningful. “It places us first in the hydric market in Southern Europe, and very well positioned in Europe in general,” he stressed. LIBERALIZED MARKET CHALLENGE

The liberalized market vector is included in EDP’s strategy. This is one of the greatest challenges in the coming years. The company believes that this liberalization will be an opportunity that will bring added value to customers. According to Miguel Stilwell d’Andrade,

3. “A commitment to growth focused on very well-defined areas and geographies that enable us to diversify market and regulatory risk, and also create new opportunities. We’ve learned how to create opportunities both in the hydric and, particularly, renewable areas in recent years. We need to create new options for growth as, nowadays, Europe and the U.S. are markets that aren’t growing”. 4. “Practicing a very clearly credible and stable policy in regard to returns for our shareholders”. EDP should be “a company that offers products and services that amount to more than just a normal sale of electricity.” How does that translate into practice? He explains: “Through campaigns, through more active participation on the ground. The advantage of the liberalized market is that we have much more flexibility to do what we want to do to work with the customer. “

STRATEGY FOR THE NEW 2012-2015 TRIENNIUM EBITDA WILL REGISTER A GREATER INCREASE IN EDP RENOVÁVEIS AND THERE WILL BE MORE INVESTMENT IN HYDRIC AND WIND ENERGIES Evolution of added installed capacity by technology

EBITDA by geography 50%

35% 42%

40%

2012-2015

32%

43%

30%

27%

3 8% 38%

40%

27%

32%

30%

20% 21% % 19%

10% 2011 2015E

0% Spain

38%

31% %

21% %

20% 14% %

10%

12 2% 12%

Portugal

14%

15%

18% % 18 18%

39% 35%

25%

32%

30%

20%

Evolution of investment by energy source 50%

Brazil

EDP Renováveis

10%

8% %

16% 13% % 10% %

2015E 2 2011 2007

0% Hydric energy in Portugal

Wi Wind d energy Wind Iberia in new and the U.S. markets

edpon 29

Generation in Brazil

Hydric

Wind

Thermal

Others

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EDP

RENOVÁVEIS

• EBITDA will grow 25% per MW • Net income is expected to triple in 4 years • 25 to 35% of net income will be distributed to shareholders

30 edpon

EBITDA per MW in operation 200

155

150 MILHÕES DE EUROS

EDP Renováveis foresees an installed capacity increase of 30 percent by 2015. Much of this development depends on markets where the Group works, especially Romania, Poland and Brazil. According to João Manso Neto, CEO of EDPR: “sixty percent of our growth comes from markets that aren’t fiction, markets where we are already present. Poland and Romania are fundamental, but Brazil is also important. On the other hand, the central market –Portugal, Spain and the United States— represents only 20 percent.” During the dissemination of the Business Plan for the next three years, EDPR announced a 25% EBITDA per average MW in operation. According to Rui Teixeira, EDPR’s CFO: “we will have accumulated about 2.3 billion between 2012 and 2015, available at the outset to pay not only dividend yields to shareholders, but also to reduce our corporate debt with EDP and, finally, to have money available to meet potential growth.” EDPR hopes to raise 3.8 billion euros from its operations by 2015.

120

100

0 2011

2015

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EDP BRAZIL

By 2015, Brazil wants to boost growth in its generation capacity and ensure continued financial discipline. Brazil represents 18% of EDP’s EBITDA and 8% of its total installed capacity.

EDP Brazil presented its Business Plan for the next three years. By 2015, the company plans to boost growth in the generation sector and pursue growth opportunities while ensuring financial discipline. “The priorities for this year will be, in the case of regulation, achieving the best results and then elaborating a plan of action, seeking investment opportunities for growth. At this point, really, the highest margins and greater stability are in the generation sector,” said Ana Maria Fernandes, EDP Brazil’s CEO. Sustained growth in Brazil is a major objective, and Miguel Amaro guarantees the continuity of all investments.

EBITDA BRAZIL 80% 71%

70% 60% 50%

52%

48%

40% 30%

29%

20% 10%

2011 2015E

0% Distribution

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Generation and Marketing

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INVESTOR DAY During Investor Day, investors and analysts took the opportunity to visit the added capacity reinforcement worksite at the Venda Nova II project, and EDP Renováveis’ Dispatch Center at the company’s headquarters in Porto.

A group of domestic and foreign analysts and investors was in Portugal to participate in EDP’s Investor Day, in order to learn about the company’s Business Plan for the next few years. They also had the opportunity to get to know EDP’s largest underground project in Portugal—the reinforcement of added capacity to Venda Nova III. “I think it is very important that they see the real work that we are doing. At this moment we are the company that is building more hydric projects

in Europe—it’s a milestone. We are doing it well, on time and within budget. And it is important for this group of people to see this project taking shape,” said António Castro, EDP Produção’s CEO. Maria Carolina, an analyst at Santander, said during the visit: “The construction of new dams like this, more technically efficient, shows that the company is seeking new solutions to meet their market needs and managing to deliver a return to its shareholders.” 32 edpon

Analysts and investors also visited the Frades Station, and EDP´s headquarters in Porto with the intent of raising awareness to EDP Renováveis’ dispatch system. Rui Chousal, EDP Renováveis’ Telerouting and Dispatch Director, seized the moment to emphasize that “EDPR possesses effective control over its production assets and human resources to allow quality operations and to leverage its delivery of efficient availability and, consequently, increasing the company’s profits.”

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General Shareholders’

Meeting

At EDP’s Annual meeting, which took place at FIL’s Conference Center, in Lisbon and was attended by 99.99 percent of EDP’s shareholders, the proposal for the application of the company’s 2011 results of 676.5 million euros (corresponding to a dividend of 0.185 euros per share) was put

forth.”There was no point approved by less than 99.7 percent of the vote,” noted António Mexia, saying that this “expressed clear shareholder support of all points brought to the annual meeting. “A very large majority”, noted EDP’s General and Supervisory Board Chairman, Eduardo Catroga. EDP’s

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shareholders represented at the annual meeting approved the company’s Financial Statements for 2011, the year that the electric division achieved a 1,125 million euros net profit, up 4% from the previous year, which represents the best year ever for the company’s electricity division.

spotlight

light

34 edpon

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A NEW BUSINESS PLAN?

ANTÓNIO

MEXIA

“With the choices made, the right team and the shareholder capital reinforcement we are capable of overcoming the challenges before us”

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spotlight

You have been the head of EDP for six years, and you were recently reelected to your third term, an unprecedented reelection in the history of the company. How do you evaluate the job you have done so far?

More than a personal perspective, my evaluation is of the work that 12,000 people do as part of our team. I always see this as a collective effort. This perspective focuses on a company that knew how to create, during the first three years (2006 to 2009), a strategic plan that would set it apart from the rest of the industry. Right now, we are the third largest player in wind energy in the world, and we have the largest hydric project across Europe. This made ours a distinctive history, and allowed us to anticipate market trends. The second phase focused on a cultural change. Today, EDP has a presence in 13 countries with employees from 29 nationalities, a company wide open to the outside world, a flexibility that has allowed it to exercise its farsighted and execution abilities. What main challenges do you foresee for a third phase?

We’ve developed this strategic plan for these next three years in anticipation of our main challenge: moving forward

far carried out in our country. How will this strategic partnership with CTG leverage EDP’s business activities?

Privatization is an enormous opportunity for EDP. Firstly, the additional financial capacity: the acquisition of minority stakes worth 2 billion Euros in wind farms will increase our own capital; and secondly, the ability to co-invest, i.e., we will approach new markets that alone we would not have been able to approach. In particular, the scale of some of these projects that include the African, Asian and also Latin American markets from our base in Brazil; and thirdly, this privatization allows us access to more competitive financing terms than those we have today due to Portugal’s risk ranking. Access to a 2 billion Euros credit line will, of course, assure us a visibility beyond what we already have currently, from 4 billion at the end of March. This allows us to look at 2015 with a new sense of tranquility in terms of investing in our projects. This partnership gives us more muscle. The high-profile entry of the Chinese into the Group was highly visible, perhaps because it was the largest. However, there are other shareholders from Algeria to Abu Dhabi. Does

company. All of these shareholders are represented in the General Supervisory Board, now chaired by Eduardo Catroga. It is interesting to notice that diversity of markets, just as the company has diversified. These shareholders are, undoubtedly, an asset. This cultural and shareholder diversity certainly makes our company more attractive. Despite this shareholder diversity, you have always emphasized the importance of Portuguese shareholders in the company.

It’s true. We are the largest Portuguese company, the company that has, in recent years, invested more in terms of infrastructures in Portugal. As the largest Portuguese multinational, we are the largest investor outside of Portugal, an important contribution to other companies that were able to view that globalization in a different way. Preserving the company’s national basis is essential. In recent years, Mello Group’s reinforcement, Espirito Santo Group’s entry and then its subsequent reinforcement, are two examples of the importance of integrating this company into the national context. Now, this is a difficult context because shareholders are all Portuguese, and just like all organizations in Portugal

“In the last three years, EDP was, arguably, the European integrated utilities company best equipped to deliver what the market expected, and the company that deviated less from its objectives”

The partnership with China Three Gorges is the largest privatization so

a diversified shareholder base make EDP a more attractive company?

It is important. It’s good that people know, for example, that we can partner with Sonatrach (Algeria’s oil) before others try partnering with them. This innovation gave us visibility in the gas market. We approached the Middle East market with IPIC, Abu Dhabi, one year before other companies looked to that market as a source of capital. And now, once again, we were the first in Europe to enter into an agreement with China. In fact, CTG’s investment in EDP was the largest Chinese investment in Europe in 2011. Indeed, this shows that we are allowing a new direction, a new openness to develop. The funding sources of the world economy have changed enormously over the past decade, and countries like China and India are now financing sources to the rest of the world. We are now a more global 36 edpon

they are being subjected to enormous demands financially. And not just from the standpoint of the external perception of risk about Portugal’s current financial difficulties—also from the peripheral economies’ crises. There are a number of things that, regardless of whether we do our job well as a country or as a company, may cause us to suffer the shock waves originating from the difficulties in the peripheral economies, such as the Greek problem. EDP’s Business Plan for the next three years is based on three pillars: sustainable growth, controlled risk and greater efficiency. Is this the appropriate strategy given the current situation?

in the last three years, EDP was, arguably, the European integrated utilities company best equipped to deliver what the market v

from within a sector that is undergoing a very difficult phase all over Europe. The utilities, electric companies sector is subject to macroeconomic market conditions and the very demanding legislative and regulatory relationships. Besides acting in a difficult market, this company has a Portuguese base, which causes the market to look at it from a perspective of more risk. This, despite the fact that 60 per cent of our results currently originate from without the country, creates difficult sector conditions along with a difficult base. And the challenge we face now is how to establish EDP’s role in the global world within the context of our recent privatization through partnership with the China Three Gorges. This is the issue.

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â&#x20AC;&#x153;EDP has always said and will continue to say, that we like competition. We want competition. Bring it on, we do better than othersâ&#x20AC;? edpon 37

spotlight

INTERVIEW IN NUMBERS

+ 12 THOUSAND EMPLOYEES

COUNTRIES

NATIONALITIES

82%

SATISFACTION RATE IN THE EMPLOYEE SURVEY

60%

OF RESULTS COME FROM OUTSIDE OF PORTUGAL

2 BILLION

EUROS INVESTED IN WIND FARMS

+ 5%

OPERATING RESULTS IN 2015

believe in us and who are willing to put forth the capital needed for the company to grow. EDP continues betting on wind and water energies. Can the solar technology be one of EDP’s future bets and for which markets?

The goal is for three fourths, more or less, of our installed capacity generation in 2015 to be CO2-free. We are talking about water and wind. These are the technologies today that yield the smallest margins, comport lower risk than conventional energy, and they have also been where we have been different, an area that the market recognizes we do well. Solar energy is now also part of this equation. Our project in this area envisages that, by 2015, we’ll initially produce 75 MW from solar source. It seems minor, however it is significant to a company that has barely started in this area. Given that this is a very expensive technology, we decided to wait for it to become more competitive. Costs have come down impressively, so now this option is taking on the configuration of a viable alternative. 38 edpon

Has the cut in production incentives had any impact on new hydric investments?

The cut in the power guarantee is not a good decision for Portugal. We have said so publicly. It creates a discrimination that favors companies based in Spain, against those that have more generation in Portugal, in addition to potentially increasing the volume of energy imports from Spain. It is understandable if we look at the context of the overall effort to reduce costs, but it was certainly not to this area that those efforts should have been directed. However, the decision has been made. And it may have consequences on the capacity of our thermal power stations that compete in the free market. With regard to hydric energy, the regulations that have been enacted will, in principle, preserve incentives for investment. The liberalized market presents great challenges. We have the example of Galp’s anticipation in the electricity sector. How is it that EDP is preparing to compete?

This campaign is not a Galp anticipation. EDP had already had a dual campaign, but due to an asymmetry of access to v

expected, and the company that deviated less from its objectives. The 12,000 people who belong to this Group have made it possible to deliver. This is an absolutely crucial aspect. However, within the three pillars of this new plan we highlight four important messages, messages that we want to pass on to the market. The first is our priority to manage the legal and regulatory framework in the different economies where we act. Our second priority is to de-leverage the company, i.e. ensure that the direction of the company’s financial consolidation continues until 2015 with clear objectives to ensure that the debt/operating results ratio does not go above threefold. Our third priority is to continue to create options for the future. One of the things we’ve done well in recent years in the hydric and renewables areas was to quickly create options that had not been considered before. Now, in the renewable energies market we are number one in Poland, number two in Romania and number three in the U.S. and in France. Who would have thought in 2006 that we’d be here today? It was not predictable. Our fourth priority is to continue to reward our shareholders well. We must be able to reward those who

spotlight

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spotlight

the database (everyone has access to the database of electric customers, but it is difficult to have access to the gas customers database), we had a harder time getting into the gas sector. This means line-fishing each client one by one. I would like to emphasize that, from the outset, we are present both in the liberalized electricity and gas markets. Currently, thinking about the Continente campaign, we have clear proof that EDP’s team is more imaginative, more proactive in its approach to the market by bringing in more than 150,000 regulated customers to the liberalized market who, today, are EDP Comercial’s customers. EDP has always said and will continue to say, that we like competition. We want competition. Bring it on, we do better than others. What more has EDP to offer besides electricity and gas?

More than selling a simple commodity, we have to incorporate the idea that we are selling solutions to people, whether for home or businesses. We want to sell solutions. To transform the energy into a product that is only electricity or gas, but which offers a full service is a huge challenge for us. It is fundamental for the stage of liberalization that is now entering a decisive phase with the end of tariffs on electricity. But being EDP the incumbent will it not there will be a natural tendency for the company to lose customers?

That is normal. Anyone who has 100% can only lose. It’s inevitable. But we must have the ability, as we do have on the industrial side, to get customers that are with EDP Serviço Universal and bring them to EDP Comercial. We will never have the full 100%, it is inevitable, and it has happened all over the world.

The electrical grid system and its sustainability have been on the agenda. How can this impact EDP?

A questão da sustentabilidade tem sido The issue of sustainability has been a false problem in this sector. I have insisted on four things. The first is that in Portugal we spend too much time talking about electricity, which represents only 20% of our energy, and talking less about the other 80%‒oil. And herein lies the main problem of the Portuguese economy with regard to energy, because this is where the largest chunk of imported energy comes from. We should be discussing how Portugal can become less dependent on oil and how to become a country that uses energy more efficiently. Efficiency and less reliance are the two 40 edpon

spotlight

critical issues, rather than the question, for the electricity sector. Second reality, a very important one: electricity prices in Portugal are lower than the European average and lower than in Spain. This is true for all levels in the industrial sector and therefore it cannot be said that electricity is associated with a competitiveness problem. This is especially true as electricity represents only, on average, 1.7% of the manufacturing costs in Portugal. Nothing that represents 1.7% is a competitiveness problem. Nor does it impact the quality of life, because it also represents only 2.5% of household spending. The third reality has been distorted: there is no such thing as a long-term sustainability problem in the industry. Studies that we have not authored, but which confirm our own, show that with real increases between 1.5 and 2% of the price of electricity by the end of the decade, we will have absorbed the deficit. That means that the system is sustainable. Fourth, the false problem, also discussed a lot lately: the issue of rental overcharges. We’ve had an opportunity to share with the government and with other partners that there are no rental

If you weren’t EDP’s Chairman, what would you like to be?

Quando estou feliz naquilo que estou a When I’m happy doing what I like to do, I do not think of any other alternative. Moreover, even when I’m not very happy doing what I do, which is not the case now, I feel obliged to always focus on what I’m doing. I do not digress too much about the rest, because otherwise I lose the discipline I demand of myself. But after EDP, it will be very difficult to think of something else. Because, of all my professional experiences –teaching, presiding over various other companies, a f leeting experience in politics—this is, by far, the best experience in my life. It is very hard for me to think about what I’m going to do next and find the kind of satisfaction that I experience here. What personal imprint do you want to leave at EDP?

The mark of a comprehensive enterprise which has its indisputable role in Portugal and abroad, which fulfills its economic and social functions, which creates more opportunities for society in the countries where it operates. A company that is distinguished from all others in our industry, this willingness

with 12,000 people. It is not my result or the Executive Board of Directors’ result, it is the confidence in a strategy, execution capability and the team’s determination to deliver, in particular, to the shareholders. It shows alignment, convergence, value creation, cohesion and the vision ahead of us. EDP is now a successful company, you were elected for the third time – an unprecedented event in the company. What is the secret of this administration?

Não há, propriamente, regras. Uma vez There really are no rules. Once they asked Jack Welch, the manager of the twentieth century, what had had been the highlight of his career. I’ll make mine his words. The first thing is that he liked to energize people, to liberate the energies of these people who surround us. The second rule is that he was never the smartest person in the room, and the most important aspect there was how do you put these collective ideas to work. I think that, regardless of the market being difficult, and regardless of what the level of demand is, we always maintain our determination to do better every day. There really is no secret proper, it is the combination

“Happier employees produce more for the company. Companies generate more profits if employees are happier” overcharges. This perception results from a study with actual errors, and we have two studies, an English one, and one from a Portuguese university showing that there are no excessive rental charges. Overall, electric energy is on the side of the solution. It has been said that 2012 and 2013 will be the most difficult years for the company. Why?

Right now there is a conjunction of various difficulties: from the generalized crisis to the lessening of demand to the legislative and regulatory pressures. Now, I am by nature an optimist and I am sure we will grow our results. I believe that until 2015 our operating income will increase by 5 percent, and we will have an EBITDA between the 4.5 and 4.7 billion euro range. I say this with conviction because I firmly believe in our skills, our team and our ambition balanced with our pragmatism.

to mix its most basic function, to give energy, which does not comprise only electricity and gas, with the energy of creating a better world. This seems vague, but it is not. Once, someone defined leadership as someone who is walking in group, releasing energy and competence in the name of a greater good. This is a crucial issue. This has to do not only with people, but also with institutions that can set themselves apart from other as leaders of society, releasing power and energy on behalf of a greater good. I think this is happening. At the Annual Meeting, shareholders have demonstrated complete confidence in your leadership by re-electing you with 99.8% of the votes. How do you view this result?

I think it’s an interesting result. It ref lects from the shareholders their recognition of the work this company does overall. That is, I share these 99.88% edpon 41

of ambition, freedom, pragmatism, discipline, openness and resilience. Perhaps resilience is a good word, a word that means the ability to attack and defend at the same time. The secret is for us to be global in this game of attack and defense. The satisfaction rate of people working in the group is large. Do you feel you are a happy leader?

In Portugal, 92 percent of people responded to the satisfaction survey. Globally, this ratio was 84% (and the survey took some time to answer, because it was demanding). So people wanted to say what they thought, how they desired to be involved. We cannot produce well if we are not involved. These were the best results ever, not only in the number of responses, but also in terms of satisfaction. Happier employees produce more for the company. Companies generate more profits if employees are happier.

In discussion Miguel Setas - Vice-president of Distribuição and Inovação EDP Brazil

Neo-entrepreneurship. What can we do to foster entrepreneurship within established companies, as it is the case of EDP?

ecently Global Entrepreneurship Research Association placed Brazil as the country with the highest rate of entrepreneurship of the G20. In 2010, 17.5% of Brazilians in adulthood had a business up to 3.5 years. That is, Brazil has become a true “startup nation,” as Israel was known a few years ago. Also in Portugal, we have witnessed a number of initiatives to promote national entrepreneurship, such as the project Energias de Portugal (Energies in Portugal), in which EDP participates, and where it seeks to promote the launch of start-ups. But this is a global phenomenon. The internet has given conditions for entrepreneurs to launch out in the market very easily and quickly. Apart from the speed and intensity of the phenomenon, it is interesting to note the appearance of various classes of entrepreneurs. There are four types that attract our attention: z-preneurs, betapreneurs, indie-preneurs and senior-preneurs. The z-preneurs is a name we give to young Generation Z (born after 1996). The Internet allowed these “digital youth” to set up their own online business. Image counseling Sites, such as the notorious Bethany Mota, are an example of how Generation Z now undertakes. The Beta-preneurs are entrepreneurs who are dedicated to launch or test products and services in advanced stages of development, but have not yet reached its final version - are in the “beta” stage. The recent launch of the organization “beta-i” in Portugal, promoting entrepreneurship and collaborative networking, illustrates this trend. The indie-preneurs are enterpreneurs “independent”, who use the facility of web and social networks to launch their own business. A recent study of the enterprisenation.com site showed that in the UKthere is more than five million people who run their own businesses at home, with the so-called “work from 5 to 9.” The senior-preneurs is the name we attach to older entrepreneurs. A report by the Kauffman Foundation shows that in recent years appeared in the U.S. a large number of entrepreneurs in the range of 54 to 65, benefiting from increased longevity and exploit business associated with the strengthening of the knowledge economy. That is, entrepreneurship is now a striking feature of our society. What we call “neo-entrepreneurship” is no longer a concept of Business Schools, to be a reality in the whole social fabric. This entrepreneur movement, also makes us think of the “corporate entrepreneurship”. What can we do to foster entrepreneurship within the neo-established companies, as is the case of EDP? 42 edpon

The opinions of different personalities

Carla Pimenta

Miguel Coutinho

Pedro Camacho

EDP is a pioneer in supporting entrepreneurship in Portugal, and currently offers a comprehensive support to the entrepreneur, from the stage of conception of the idea to the formation of the company. EDP Innovation Prize, the lab prototyping Fablab EDP, EDP Starter incubator for startups, EDP Inovação and venture capital fund EDP Ventures has played a key role in fostering entrepreneurship in the Portuguese energy sector. The corporate entrepreneurship has enormous potential for growth within EDP, which may be driven by a constant reminder of the creativity, and a new way of seeing things. It is also important to demystify the idea that innovation is synonymous with paradigm shift. Sometimes often the simplest ideas become the most effective ones, they tend to be those with the greatest ease of implementation. In a group facing global challenges, it is essential that there is a constant adaptation to different contexts. The willingness to innovate, create, do better should be the DNA of EDP. Bringing new ideas and projects to the conference table should be encouraged in all Group companies, fostering an energetic organizational culture, open to change and confident.

As Miguel Coutinho says, enterprise spirit depends neither on the age nor the schedule. A recent study by the Kauffman Foundation shows that the average age of the founders of the 500 fastest growing companies is over 40 years, and the indie-preneurs, from the above mentioned text, have their work hours from 9 to 5 and transform themselves into entrepreneurs from 5 to 9. Requesting permission to the writer Marcel Proust we would say that entrepreneurship is also a kind of search of lost time. But not only. In a large organization, there is another license required for anyone who aspires to be entrepreneur (i.e., he who carries within himself the desire to change) - that can break the routine and all inertia and sometimes indifference that they carry with them. Large companies are those that have time to listen to the tear and the ambition of its employees. Large companies are those that preserve a collective sense, welcome and encourage talent and creativity of each one of them. Large companies are those with the courage and flexibility to change, halfway through, its screenplay. For small projects or big ideas.

Entrepreneurship and innovation are today (even more) important, because they “dry up” the traditional sources of finance and Economic promotion among us too dependent on the state. The crisis, associated with the opportunities that the “new economy” offers, encourages the entrepreneurial spirit mentioned by Miguel Setas, giving rise to new projects, “pushed” by the lack of jobs and low wages, and also new processes and new business areas in existing businesses. Portugal is not a start-up nation, but it has made its journey, with several success stories in national and international markets. But we must make sure it continues like this. The lack of credit, especially for start-ups, and the cut of business costs are killing a lot of innovation and entrepreneurship too. This has to be fought. Not being the solution for all ills, it will be key to helping the country out of the choke and to be competitive in the future. Therefore it is urgent that the state creates the necessary conditions that allow entrepreneurship to bear fruit, that the bank recovers and goes back to invest in startups, and that companies with the capacity to innovate, such as EDP, invest in intelligence they have at home. Great ideas and businesses are often much closer than we think.

· EDP Inovação

· Institutional Relations Management Department

· Diretor of Visão´s magazine

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Vice President of EDP Energias do Brazil since 2008. Currently he is the CEO of EDP Bandeirante, EDP Escelsa, EDP Renewables Brazil and responsible for the area of Inovação (Innovation). Since 1998 in the energy sector, he has played roles of management and administration in the Sectors of Oil, Gas and Electricity. He began his career as a consultant at McKinsey & Co. He is graduated in Engineering Physics and holds a Master degree in Electrical and Computer Engineering at IST and an MBA from Universidade Nova de Lisboa.

“Entrepreneurship is now a striking feature of our society. What we call “neo-entrepreneurship” is no longer the concept of Business Schools, to be a reality in the whole social fabric. This entrepreneur movement, also makes us think ‘corporate entrepreneurship’.”

ur energy

NAVIGATION LOCKS In 2011, a number of boats and passengers traveled up and down the locks to navigate the calm waters of the Douro River and enjoy the unique landscape throughtout this journey. The locks of the national section of the Douro River existing in the hydroelectric facilities developed by the EDP Group, contribute to boosting the economy of a vast region which represents the “backbone” of this river originating in Spain (in the Urbión hills) and joining the Atlantic Ocean at Porto after coursing through 850 miles. 2011 RESULTS NUMBER OF LOCKING EVENTS

VESSELS

PASSENGERS

10 588

9 598

518 254

44 edpon

o ur e n e rg y

LIGHT IN THE SERPA MOUNTAIN RANGE The light finally came to the Serpa Mountain Range in Alentejo, brought by EDP Distribuição in partnership with Serpa City’s Council and the Association of Serpa County Farmers. This is a twophase project intended to expand the rural power grid that will add more than 210 kilometers of LV (low voltage) and MV (medium voltage), as well as 86 new TS (transformer stations) representing an investment of about 5 million euros. This project is contributing to the development of the region by supplying electric power. The project, funded by PRODER-

Programa de Desenvolvimento Rural (Rural Development Program), will bring electricity to a total of 246 homes and family-oriented agribusiness farms, scattered throughout the Serpa mountain range. “We are bringing these people into the 21st century, doing what we are good at. We are a Group with a great connection to the community,” said António Mexia at the ceremony that inaugurated the first phase of this project this past February. By the end of this year electricity will bring new life to this mountain with the completion of the project’s second phase.

World Water Day The World Water Day was celebrated for the second consecutive year at the hydroelectric station Ribeiradio-Ermida’s construction site. The site was visited by more than 50 children from Souto Maior’s Elementary School, Ribeiradio’s and Souto Maior kindergarteners, and Ribeiradio’s Elementary School 1. Visitors were welcomed and accompanied by the Construction Manager, João Rodrigues, and by two other project team members, Fernando Pinto and João Nunes.

VISITING UNIVERSITY STUDENTS About 50 Geology students from Evora University and Nova de Lisboa University visited Salamonde II’s and Venda Nova III’s power reinforcement works. This visit gave them a good idea of the type of geotechnical work that is carried out by EDP Group from the excavation/ containment of embankments out in the open to the excavation / containment of the access tunnels and the Station’s cave. edpon 45

The trip began with the children visiting the concrete production platform and the bucket pier where children had the opportunity to observe the works from the inside of the bus. At the cafeteria with “the passport” in hand, they traveled to the ‘Hydric Continent’ where they met our friend Rita Riacho—an educational tour in which they learned how electricity is produced in hydroelectric facilities, learned about the Water Cycle and how it is distributed on planet Earth.

is who

MASAAKI IMAI Sensei Lean/Kaizen Founder of the Kaizen Institute, he is known as the father of the continuous improvement philosophy (kaizen) and author of the first book about the secret of “Lean.” Recently he was at EDP, attending a EDP University and EDPWay Lean Project joint seminar where he explained everything about the lean / kaizen methodology.

For you, what does Kaizen mean?

Kaizen is a word that has existed in the Japanese dictionary for thousands of years, and it means “Change for Better” in which “Kai” means “Change” and “Zen” means “For Better.” Thus, Kaizen stands for a process on Continued Change. I use the word Continued instead of the more usual ‘Continuous’ to reinforce the fact that the change must be made by all, everyday and in all areas. It must be a natural and everyday process of minor improvements and constant evolution. Radical improvements are also achieved, but the new methods and ways of working must then be improved day by day. What are the differences between Lean and Kaizen?

In the book I wrote in 1986 “Kaizen: The Key to Japan’s Competitive Success,” I describe the path followed by Japanese companies like Toyota, Canon, Ricoh, Pentel or Japan Steel Works to improve their quality and productivity levels generated by problems experienced after the end of World War II. At that time, there were already a lot of organizations looking to Japan as an example

to follow, both in Total Quality Improvement Systems and the in the so-called Just-inTime System that allowed Toyota Motor Company to overcome the first Oil Crisis in 1972 without going into the red. Only in 1992 does the word “Lean” appear in Jim Womack’s book “The Machine that Changed the World.” However, I believe that Lean is just the Western adaptation of the Kaizen Philosophy, which had been in practice in the East for decades. How does the application of the Lean / Kaizen methodology help companies achieve better results?

Kaizen tools provide simple solutions for improved change. More than a methodology, it consists of lean management tools (synonymous with thin), designed to remove fat and reduce waste, Kaizen philosophy is a way of life. Today, entrepreneurs apply sophisticated tools and technologies to problems that can be solved in a simple manner and without undue expense. The Kaizen spirit consists of simple concepts applicable to any sector of business: it is necessary to question the current methods v

46 edpon

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who is who Sensei Lean/Kaizen

and think about how to do better. This form of being requires leaders to be strong, dynamic, capable of change at all levels from the top down. The goal is to identify waste, create added value for companies, to become more efficient and competitive. Now, to identify waste, we have to go to where it can really be identified. We have to go to the “Gemba”. Is the initial idea of Kaizen to save?

FTo perform Kaizen is to identify the waste in processes and turning that waste into addedvalue. If I can make improvements that allow me to have available more time / capacity, the next step is to fill this time with added value activities. For example: After making an improvement I can gain half of the storage

second is the pillar that enables disruptive innovation. Through detailed analysis of the process and involving multidisciplinary teams, we are able to achieve transformations that involve the whole organization and often completely change people’s habits and the way we work. The third -Support- is responsible for the motivation, training and communication behind all improvement activities.

difficulty. In cases where there is much geographical dispersion, it is also important to have a good Kaizen Support team to ensure the leveraging of knowledge and dissemination of good practices among the various units.

What are the critical factors of success / failure in the application of Lean?

It is known that organizations and people who perform daily work processes do so almost automatically, the result of a practice of doing the same tasks day after day, sometimes performed for years. To change, it is not enough to explain the

Em todos estes anos, nunca vi um projeto In all these years, I never saw a Lean project that has worsened the results of an organization. There are projects that are

Can an organization be naturally Kaizen? Or is there always a need for facilitators to think about a program of continuous improvement?

“It is known that, on average, it takes 21 days to change a work habit, and the only known way to do this is to practice.” area. However, it is only an effective gain if I can sell the space or occupy it with other value-added activities. I would like to tell people that one should not do Kaizen in order to reduce employees but to more effectively use their time. We have realized that Kaizen / Lean is about incremental improvement, but is it against innovation?

In Kaizen there is room for both improvements: incremental and disruptive. We also believe that the existence of one depends on the other. No company can continuously innovate without having periods of incremental improvement. Our change management model consists of three pillars: Kaizen Daily, Kaizen Project and Kaizen Support. The first pillar is responsible for incremental improvements, where the teams practice on a daily basis to improve solving problems together in a structured way. The

more successful, others less so, but there are always improvements that we can observe and quantify. However, what differentiates a good project from an average one is the top management’s commitment. Usually, people are very busy and run their tasks in order of priority. The role of commitment is exactly this: to dictate priorities. Is the kaizen method suitable for industrial companies in production “clusters” or can it also be successfully applied to large and often dispersed companies?

The improvement methods are independent of the geographical dispersion of the organization. Just look at Toyota: Toyota has factories outside Japan and that doesn’t mean that they no longer have the Kaizen in its DNA. Sometimes, dispersal may hinder some sharing of information, but nowadays there are several solutions that resolve this

objectives and tools (such as it is done in traditional classroom training). This alone does not guarantee that people will change their work habits. Real change happens only when you start performing tasks in a different and more efficient manner. So the methodology of change must be based on two aspects: technical improvements (physical, such as a change of computer systems, warehouse layout, or work tools) and behavioral improvements (change of work habits). It is known that on average, it takes 21 days to change a work habit, and the only known way to do this is to practice (in other words, by training). Do you know cases of companies in the Energy sector that have obtained good results?

There are several companies worldwide that are applying such methodologies. We are talking about countries like Spain, Brazil,

+ MASAAKI IMAI IN EDP Under the auspices of EDPWay Lean Project and EDP University, on April 23 EDP welcomed Masaaki Imai, the founder of the Kaizen Institute, and one of the world’s great thinkers of Lean / Kaizen in organizations. With a total of more than 3,000 employees and 4,600 initiatives, EDP’s Lean improvement program is a good example of Lean implementation in their

management, but, since it is a good practice, the program is also undergoing continuous improvement. During Mr. Imai’s visit to Portugal for the Kaizen awards, EDP was selected as one of the companies to share experiences on how it is applying the Lean / Kaizen philosophy in its activities and how it can improve further. To learn more about the event and about EDP Lean go to: lean. edp.pt. 48 edpon

Sensei Lean/Kaizen who is who

USA and Germany, among others. And even though they have different degrees of maturity, the results are interesting in that they show improvement in service levels, cost reduction or quality improvement. The books you published were a worldwide success, they tell the stories of a rich professional background. In the current situation, does it still make sense to talk about Kaizen? Or does it make even more sense now?

Increasingly, business owners and managers are aware of the need to transform their organizations in order to be more “lean” and efficient. I can even give you a very exact example of this need. From the macroeconomic point of view, and with the recent decline in lending by the banking sector, companies are struggling with huge financial difficulties. One of the goals of the Kaizen Lean tools is the reduction of inventories (physical or information). These inventories represent money that is not being circulated, and releasing them generates cash flow, improving the company’s situation from a liquidity standpoint. What is the role of management in fostering a culture of continuous improvement?

Management’s role is to demonstrate its commitment to continuous improvement. Only that way can an organization keep changing its culture. A way normally used to create this commitment is organizing events to spread good practices, conduct audits in the organization’s areas, make trips to the field to observe the changes and, in the long term, is the introduction of KPIs (Key Performance Indicators) related to improving employee compensation plans. After this brief exchange of experiences with EDP, if we were to ask for your advice on how to sustain our Lean journey, what would you say?

From what I saw, EDP successfully launched its Lean program several years ago and as a result of this work the company has already seen results in the “Gemba.” However, we must ensure that the improvement is rooted in the culture of the organization, that it is practiced every day in the various units / departments. Thus, the real challenge is to reach that improvement in a most natural way, less dependent on projects and / or time available. To do this we must really work the Kaizen Daily and guarantee that the Kaizen Support ensures an asymmetry analysis of the various units / departments.

From Japan to the world Known as one of the gurus of Lean and the father of Continued Change, Masaaki Imai has been a pioneer and a leader in the spreading of the Kaizen philosophy all over the world. Academically speaking, his alma mater is the University of Tokyo. For a long time he has had a strong connection with Toyota Motor Corporation, where he has followed the development of Kaizen activities, initially, as a team member, and later as a privileged partner. He was also, for several years, involved with the Japan Productivity Center. In addition to writing two best sellers, “Kaizen: the Key to Japan’s Competitive Success” and “Gemba Kaizen: A Commonsense, Low-Cost Approach to Management,” published in more than 20 languages, he is currently finishing his third book. In this issue, he says he will reinforce the inclusion of recent Kaizen case studies in the various industries and continents. In 1985 he founded the Kaizen Institute, a multinational consulting company, which currently has over 40 offices across five continents and more than 600 experts. He received numerous awards, including the award for his enormous dedication and contribution to the evolution of business and productivity, in 1998. The book “Gemba Kaizen” was also honored in 1999 with the “Shingo - Scientific and Expert Literature.” He is a frequent speaker in several continents and often accompanies Benchmarktours to companies of Excellence in the implementation of Kaizen. This summer he will also be present at the 2012 Kaizen Expo in China. edpon 49

Human Capital

EDP ATTRACTS UNIVERSITY STUDENTS Between February and April of this year EDP was present at a total of eight job-shops, academic fairs held in Lisbon and Porto, where the company promoted its value proposition as the best company to work. The job-shops were held in higher learning institutions of reference, in particular Instituto SuperiorTécnico (Higher Technical Institute), Universidade Católica (Catholic University), Instituto Superior de Economia e Gestão (School of Economics and Management), Universidade Nova de Lisboa (New University of Lisbon), ISCTE – (Lisbon University Institute) and the College of Economics of the University of Porto, among others. Over the past few years, and in tandem with

the growth and evolution of its business, EDP has been focusing on attracting new talents as part of a process to bring new blood into the company. Its intention is to position the Group as “employer of first choice” in the labor market and attract young people with potential who can contribute to the creation of value. Therefore, in 2009, the ‘On Top Recruitment Program’ was created and implemented. This is an initiative that seeks to attract and capture young high-potential people. Other goals are: to also promote 50 edpon

interaction between EDP and the academic community, share know-how; acquaint students with the company’s positioning and strategy. The result of this rapprochment between EDP and the academic community is clearly visible. Just last year, EDP supported 722 internships. The different types of training projects (curricular/academic, summer, approach to an active life, and professional internships) that the company sponsors help in the development of skills in these young people.

EDP LAUNCHES TRAINEE PROGRAM

Attract, capture, develop and retain young people with great potential—this is the goal of the first Trainee Program launched by EDP, which provides a host of corporate initiatives designed to ensure rapid integration of young people in the reality of EDP’s business. Based on three pillars –education, jobrotation and development projects– this initiative will allow young trainees to start their careers through a structured program: acquainting themselves with cross-sectional view of EDP’s activities, gaining work experience and developing their skills sets are, in this context, the main priorities. Released and announced for the first time this past February to the media and higher-learning institutions, this program encompassed more than 2,800 young people, a number that translates the company’s appeal. At this time, ongoing selection processes are underway so, in October we will welcome 12 to 15 graduates who over the 20 months the program will last, will have the opportunity to develop, and simultaneously bring new and innovative ideas and processes to the company. EDP’s Trainee Program annual evolution will depend on the rejuvenation needs of the Group. Trainees will arrive in October for an adventure at EDP. 722 INTERNSHIPS IN 2011 In 2011, EDP hired a total of 728 new employees for its different companies with the total number of new hires during the previous three years standing at 1,968. Last year, EDP sponsored the development of skills for 722 young people through academic internships / summer school, approach to active life and professional internships, an increase of 21.5% compared to 2009.

‘CONCILIAR’ ROADSHOW More than four thousand people visited the ‘Conciliar’ Roadshow booth, an event held between April and May, which encompassed 24 EDP facilities (Porto, Gaia, Lisbon, Coimbra, Setúbal and Carregado)—one way to gather suggestions for improvement and to answer questions from the staff. This was one of the most outstanding ‘Conciliar’ Program initiatives targeting EDP’s certification as a “Family-Responsible Company”. This program was launched in 2008 with the aim of creating conditions for the Group’s employees to better manage the various aspects that of their work, family and personal life. CONCILIATING PROTOCOLS In the meantime, information on the Intranet regarding a total of about 40 protocols called conciliators is already available. This information is intended to give EDP employees and their families a set of advantages and special benefits, aimed at balancing and supporting their professional and personal lives. Travel agencies and banks, leisure activities camps for children, health and welfare, domestic services, specialized seniors care, among others, are some of the areas covered by these partnerships. All of them gather a range of products and services with special and exclusive discounts for EDP employees. To learn more go to the Intranet and access the ‘Conciliar’ area under “Protocolos”. Be sure to conciliate your professional and personal life! edpon 51

ustainability RESPONSABILITY TOWARD THE ENVIRONMENT

ON THE ROAD IN PORTUGAL

The “A Tua Energia (Your Energy)” truck has again hit the road, giving a lift to many children on a journey toward energy efficiency.

his initiative, created in 2009 under EDP’s Sustainability Space in Lisbon, began to take more significant shape, thus the need to expand this project to other parts of the country was inevitable. With a strategically designed route, this initiative, in its second year, attracted a large number of schools from north to

south. The protagonists, teachers Energia (Energy) and Faísca (Spark) packed up and left for the adventure on April 17, headed towards Loulé. In their luggage they brought energy efficiency tips, safety principles in the use of energy and a positive attitude. During the 26 days of this initiative they contacted approximately 5,000 52 edpon

first-graders, offering these children a different kind of a school day in an outof-the-ordinary classroom—a truck— while instilling in them the principles of sustainability, and combining the fun and educational elements. In graphic terms, and in comparison to the previous year, the truck offered some new items, such as household objects in

This project, aimed at children and youngsters, is funded by the Energy Services Regulatory Authority and is part of the ECO EDP Program within the Plan for the Promotion of Energy Efficiency scope.

3D (in a size proportionately scaled to the children) on which the children received useful tips efficiency. This is a good way for kids to learn how to efficiently use the appliances in their homes. This year’s truck adventure also included a new jingle “A Tua Energia” which became a real success with the students who received it with great excitement and enthusiasm. Using accessible language and content tailored to the themes promoted throughout this initiative, the jingle proved to be a very effective learning tool. This initiative’s ultimate goal is the sharing of knowledge and the training of coming generations that recognize children’s ability to interfere with the habits of adults and instill in them the principles of energy efficiency.

“A TUA ENERGIA” (YOUR ENERGY) TRUCK ROUTE Between April 17 and May 24 the “A Tua Energia” truck traveled from the south to the north of Portugal. Beginning in the Algarve and ending in the Alentejo region, the truck visited Loulé, Moura, Elvas, Tomar, Fundão, Gouveia, Lamego, Chaves, Mira, Guimarães, Viana do Castelo, São João da Madeira, Marinha Grande, Alcochete and Montemor-o-Novo. It was 26 days full of good energy during which youngsters learned new energy efficiency tips that they will surely now put into practice.

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oundation

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causas

EXHIBITIONS IN LISBON AND PORTO The Museum of Electricity in Lisbon will host two new exhibits, “Uma Pátria Assim... Such a Homeland,” by Victor Pomar, a recent anthology of 30 large paintings, and “Casa Deitada” (Laying House), by Carlos Nogueira, a mold of a house sculpture displayed in Vila Nova da

Barquinha, will be open for viewing until September 16. In Porto, at Galeria Fundação EDP, an exhibition by Vieira da Silva is being inaugurated on July 12. A great show to be viewed through October 21.

EDP IN THE ARTS

BRAZIL ANNOUNCES WINNERS / The organizers of the EDP Award in the Arts, an initiative with Instituto Tomie Ohtake, announced in June the three finalists for this third year of the award, which encourages the training and improvement of young Brazilian artists. This distinction is already seen as a benchmark in contemporary art, architecture and design in Latin America and in São Paulo, one of the continent’s main cultural centers. Virgílio Neto, a Brazilian, received first prize for his untitled work, which consists of oil on paper, watercolor, colored pencil and graphite. Alan Adi who comes from the state of Sergipe but lives currently in Sao Paulo, held second place with “Breath 2012,” which uses such elements as a bike horn, MP3 player, sound box, wooden box and stone. São Paulo’s André Terayama placed third with the production of his “Video 2’26”, and Rio de Janeiro native Fernanda Furtado received an honorable mention for her piece “Volume Remaining from a Negligible Portion of Air,” made with graphite on wall. The first-prize winner received a two-month scholarship to the Banff Center, in Canada. The second-place winner and the teacher he named received a trip abroad through the “Dynamics Encounters” program, while the recipient of third place will be able to attend classes at the Instituto Tomie Ohtake. The top three winners will also have their work viewed by critics for one year, taking home the awards themselves, which were designed by Artur Lescher, a famous Brazilian sculptor. The winners Virgílio Neto, Alan Adi, André Terayama and Fernanda Furtado

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photographicessay EDP Headquarters in Porto By Filipe Pessoa Neto

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THE LINES OF BEAUTY Inaugurated in April 2011, EDP’s headquarters in Porto were the natural choice of venue for the Group’s new business plan presentation. Located near the “Casa da Música” (Music House) building in the heart of Porto, this modern and sustainable building takes one by surprise with its unusual architecture and fabulous surroundings. The photographs shown in these pages leave no doubt about it. And who better to take them than someone who works in the building? Filipe Pessoa Neto, 45, an EDP Distribuição employee of 20 years, understood and humanized its aesthetic beauty. The images presented are part of the series “EDP Porto - Building A - Side B” – photographs taken of and for EDP Buildings - Porto.”

The light

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photographic essay

The way

Reflections 2

The turning of a new page

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photographic essay

In a strange place edpon 59

photographic essay

Alternative paths 60 edpon

photographic essay

Free

Focus edpon 61

photographic essay

Angst

Symphony

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photographic essay

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In focus JOSÉ NOVAIS GONÇALVES, EDP Comercial’s Business Planning and Oversight (DPCN) Manager Given the full liberalization of the energy market, what is the greatest challenge facing EDP Comercial (EDP C)’s DPCN?

EDP has launched a strategic initiative to concentrate its commercial areas in Portugal (Electricity, Gas and Services) in a unique organization that takes an integrated approach to the market and to each client. For DPCN it is a huge challenge! We are a team of experts that exists to deliver high-value “products and services” to a demanding set of internal clients that complement the tool set they have to compete in the market. Delivering this type of “product” with quality is becoming an ever more important challenge in the current context of increasing change. Having such a wide-ranging set of responsibilities, how do you reconcile your professional and personal life?

It is demanding in the sense that one can only manage by being very organized, while also flexible, and having collaborative support. In my case I have to emphasize two basic pillars: At EDP C, I can always count on an extraordinary team; at home, I have an exceptional family who supports me at all times. Which footprints would you like to leave behind in this renewed Business Unit of the Group?

I would like not only to have an ever stronger Planning & Oversight Business (PCN) infrastructure, but also to leave it agile and flexible (just as EDP must become as a company). Doing so would solidify the company’s position as a valuable “strategic advisor” both to the top management team, as well as to each EDP C business unit, and ultimately help build a stronger and more experienced team possessing the necessary skills to contribute to the future growth of the Group. What most motivates you in this new professional challenge?

It is a very exciting challenge. On the one hand, it’s about assuming a role of great responsibility in an EDP Group company known for its high-quality standards and contributing to further raising these standards. On the other, it’s about being able to participate in a unique professional project happening right now. In the current context of generalized contraction, the people of EDP and EDP C face a unique opportunity in being able to work and act in a platform of growth and development in a market that will see great dynamic forces developing both in innovation and competition.

“We will see great dynamic forces developing both in innovation and competition”

What features are absolutely essential for EDP C to have, particularly in this free market scenario?

They are the same key features any winning company should have, in my opinion: astute and consequent observation of the market and its competition; very clearly defined objectives; a dynamic and creative team; structured and realistic planning; and great agility and flexibility in the transition from action to market. How do you see the energy market’s evolution in Portugal and EDP’s positioning in the next five to 10?

I think the energy market will be increasingly characterized by greater competitiveness and innovation, particularly in terms of supply to and relationships with customers, as well as growing concerns with fuel efficiency. EDP is particularly well positioned to address these trends in view of the options it has created and how it has evolved as an organization. 64 edpon

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Portugal

SOU+EDP: IST - Management Challenge An event directed at identifying student teams from the Instituto Superior Técnico in Lisbon that will represent us at the 2013 Global Management Challenge being held at the Electricity Museum (Museu da Eletricidade) in Lisbon. 07

2012 International HR Meeting This event is intended to gather all human resource professionals from the various Group companies and geographies during one single day. Location to be determined.

Lean Summit Brazil The largest Lean event will be held in Brazil for two days. This year’s meeting will showcase EDP as a speaker on the “Rethinking value and critical processes” panel, in São Paulo.

08 08

EDP Renováveis in Expofacic EDP Renováveis will be present at the 22nd Agricultural, Commercial and Industrial Fair in Cantanhede. From July 25 through August 5, you can see and learn about the wind energy technology.

EDP Renováveis Annual Meeting EDP Renováveis team will hold its annual meeting in September. Madrid was the city chosen to delineate strategies and review the year’s activities.

Asturian Sailing Week From July 14 to 22, Asturias will host the most important sailors and regattas. A classic of the Asturias Foundation sailing calendar, sponsored by HC Energía, happening along the Asturian Central Coast. 07

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2012 EDP Paredes Coura Festival From August 13 to 17, EDP lends its name to a popular music festival in Portugal. Paredes de Coura will host dozens of bands and thousands of festival-goers. www.paredesdecoura.com 08

International Sampling Show From August 4 to 19, HC Energía will, once again, have its own booth in this very important exhibition in Gijón, Astúrias. The company expects thousands of visitors will come to the show and view its products and services. 04 08

2012 EDP Cool Jazz Oeiras will once again host this festival of a more jazzy sort, from June 29 through July 22. The first time with the EDP moniker, big celebrities will go up on stage. www.cooljazzfest.com

“Let’s rehabilitate Valledor” Fundação HC Energía developed a plan to rehabilitate this area of Asturian mountain devastated by a huge fire. During this Summer let’s pull up our sleeves and give this mountain new life. 01

TWIST project Winners EDP presented the awards to schools, students and teachers around the country, who participated in this project. This event was attended by around 500 students, as well as by company directors and varied public officials. 07

EDPartners EDPartners Awards acknowledge the best results in the varied relationships with EDP, Projects developed by vendors that best aligned with the Group’s objectives.

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moveon

On Portugal