Fiven Annual Report 2020

Fiven Annual Report 2020 the maturity dates for the vast majority of Fiven debt fall due only in 2022. As part of the financing of the Group, there is a 32.1 MEUR unsecured subordinated shareholder loan. Moreover, recent quarters demonstrate that there is sufficient headroom to the bond covenant restrictions for maintaining financial flexibility. Any refinancing activity of the bond expiring April 2022 is therefore considered highly likely. Fiven is also taking measures to lower the risk of the virus in line with external recommendations and according to own initiatives. The Board concludes that it is appropriate to use the going concern basis of accounting in the preparation of the financial statements, and that no material uncertainty exists related to the ability to continue as a going concern. Segment Review Fiven Norway Fiven Norway product portfolio is to a large extent dominated by specialty products and was less impacted by the market contraction following the pandemic. Co-development projects in North America, Europe, and Asia succeeded to offset the loss in the automotive market. Total revenue and other income for 2020 ended at 48.5 MEUR and made up for 48 per cent of the Fiven Group total revenues. The adjusted EBITDA was EUR 10.6m and the adjusted EBITDA margin reached 21.9 per cent. The drivers for the strong performance were advantageous sales mix, savings on cost of goods sold as well as operating costs, and positive impact of a weaker NOK against major trading currencies. The manning in Fiven Norway at the end of 2020 was 178 full time equivalents (FTEs), a reduction of 31 from year-end 2019. Fiven Brazil Despite a clear improvement of demand in Latin America towards the end of the year, 2020 was a challenging year for Fiven Brazil’s external revenues due to the US demand down- turn for standard products and the Brazilian Real's devaluation. On the other hand, following Fiven Group decisions to optimize the use of internal supply chain, Fiven Brazil increased sales to internal customers softening the impact from lower sales to external customers. The external revenues for 2020 were 35.5 MEUR accounting for 35 per cent of the Fiven Group customer revenues. Including the revenues for the other group segments, total revenues reached 45.8 MEUR. The adjusted EBITDA 2020 of 6.8 MEUR (14.9 per cent Adjusted EBITDA margin) reflects the impact from the pandemic on the revenues being offset by lower costs of goods sold and favorable currency impact from export activities. The results also include benefits from operating cost measures launched in quarter 2. The number of full-time equivalents (FTE’s) at year-end 2019 was 245 and reduced to 220 by year-end 2020. Fiven Belgium Fiven Belgium saw a slight recovery in revenues towards the end of the year but remained the segment affected the most by the pandemic within the Fiven Group. Most of the key customers are substantial active players in the automotive market in Europe. The company partially reduced its activity levels in 2020. Customer demand after the pandemic outbreak has been met properly from available stock or from main plants in Norway and Brazil. Total revenue and other income in 2020 were 17.9 MEUR and Fiven Belgium accounted for 17 per cent of the Fiven Group’s external customer revenues. The adjusted EBITDA reported was EUR -1.0m. Fiven Belgium is benefiting from government support for companies impacted by the COVID 19 pandemic (furlough measures). Parent Company Review Fiven ASA is the parent company of the Group. The revenues of the period reached 11.7 MEUR and the Operating Profit amounted to 6.4 MEUR. The Net Loss was 2.7 MEUR. The Board of Directors proposes to cover the Net Loss of 2.693 MEUR by transfer 2.216 TEUR from Other paid in capital. Ending the year with an uncovered loss of 476 TEUR. R&D Activities The R&D activity is a key driver in Fiven’s growth strategy. To speed up the new product development, The Fiven Innovation System was developed and implemented in 2020. This new approach to innovation was derived from a hybrid methodol- ogy based on Stage-Gate and Agile techniques with the clear goal of reducing the time it takes to develop new products and bring them to market. In 2020 the co-development of new products with key cus- tomers focused on various new high purity SiC powders for the semiconductor industry, in particular powders for single crystal growth. Also, various tailor-made solutions for seal rings and armor applications were developed. An innovation program related to a new family of abrasive products was also given prior- ity, together with development of fine powders of boron carbide. Also, 2020 was the year that a full-scale pilot installation of our next generation Acheson furnace technology was demon- strated and verified in full scale in Lillesand, Norway. The new 18   Board of Directors’ Report