Endúr : Directors report for Endúr ASA 2020

A transformational year
In recent years the majority of Endúr's operations has been related to the maritime and oshore energy segments. The companies in these segments have struggled, however, to deliver consistent positive 'nancial results, and the market outlook for both segments has been uncertain. In February 2020 this led to the decision to wind down the oshore maintenance and modi'cation business Endúr Energy Solutions AS. On the other hand, Endúr's entry into the aquaculture industry has seen a positive development since identi'ed as a target market in 2018.

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Against this backdrop Endúr in June 2020 announced a signi'cant change in strategic direction, targeting the marine infrastructure market as a key growth area for the group. Endúr's target segments within marine infrastructure include facilities for land-based aquaculture, quays, harbours, dams, bridges and other specialised concrete and steel projects. With the change in strategic direction, Endúr announced an ambition to build a NOK 2#2.5 billion revenue company within the next two years, delivering 10#12% EBITDA-margin. The key driver for a$aining these objectives is an accretive acquisition and consolidation strategy.

A key element under the new strategy was to build a unique service provider within marine infrastructure and aquaculture solutions. Endúr means to establish a full-service oering within marine infrastructure, enabling the company to take on large multi-disciplinary projects. Endúr today particularly targets large projects within land-based aquaculture, marine infrastructure, and related areas.

The principal rationale underlying Endúr's strategic realignment is that both marine infrastructure and land-based aquaculture comprise substantial and a$ractive growth segments, largely being serviced by a fragmented supply industry. Through acting as a consolidator in the marine infrastructure market, Endúr can create a one-stop shop that can both tap into the market's growth and pro'tability opportunities, while also establishing a larger service provider with a broad service oering, one which the company expects will be appreciated by customers within what is currently a highly fragmented marine infrastructure supplier market.

The 'rst milestone under the new strategy was the merger between Endúr ASA and Oceano AS, comprised of the subsidiary companies ØPD AS and Installit AS, announced in June and completed on 16 October 2020.

The second and most signi'cant milestone was the acquisition of BMO Entreprenør AS, completed on 17 December 2020. BMO Entreprenør is a market leader within maintenance and rehabilitation of critical marine infrastructure such as quays, harbours, dams, bridges and other specialized concrete and steel projects, servicing both public and private customers in the Norwegian market.

Over the second half of 2020 Endúr also strengthened the group's balance sheet. This in part to provide capital required for further consolidation, as well as to ensure sucient working capital for the group's project-oriented operations. Endúr successfully completed two private placements for gross proceeds of NOK 100 million (June 2020) and NOK 125 million (November 2020) respectively. One speci'c purpose of the la$er was to 'nance the cash consideration for the BMO Entreprenør acquisition.

It follows that Endúr ended 2020 a wholly dierent company than when the year commenced, with a strengthened balance sheet, the majority of the group's activities operating in industry segments with a strong and positive market outlook, and hence, in the board's opinion, a strong plaorm to build upon.

Shortly into the new year Endúr has acted on this plaorm, furthering and reinforcing its marine infrastructure growth strategy through the acquisitions of Artec Aqua AS, a renowned, leading turnkey supplier of land-based aquaculture facilities, and Marcon-Gruppen i Sverige AB, a premiere Swedish multi-service marine infrastructure provider.

Endúr ASA's commitment to pro'table growth, with its 10#12% EBITDA-margin ambition a key objective, was further demonstrated by decisions to wind down loss-making entities Endúr Industrier AS and ØPD AS in January and February 2021, respectively. Both companies' performances had been marred by consistent poor 'nancial performance over time, subjected to additional pressure by low order intake resulting partly from Covid-19, and, ultimately, material liquidity de'cits.

In recent years, Endúr has spent considerable time and resources on restructuring and seeking to turn around under- performing businesses. However unfortunate having to discontinue the activities in Endúr Industrier and ØPD, Endúr's board of directors is determined that this long-term state of restructuring must shortly be a thing of the past. With the many and all-encompassing structural changes undertaken since mid-2020 and into 2021, it is the board's opinion that Endúr per April 2021 is well positioned to both realise and capitalize on a strategy focused on growth and pro'tability.

Read our Annual Report 2020