38812424 2020-01-01 2020-12-31 38812424 2020-01-01 2020-12-31 0 38812424 2020-01-01 2020-12-31 1 38812424 2020-01-01 2020-12-31 2 38812424 2020-01-01 2020-12-31 3 38812424 2020-01-01 2020-12-31 0 38812424 2020-01-01 2020-12-31 1 38812424 2020-01-01 2020-12-31 2 38812424 2020-01-01 2020-12-31 3 38812424 2020-01-01 2020-12-31 4 38812424 2020-01-01 2020-12-31 5 38812424 2019-01-01 2019-12-31 38812424 2020-01-01 2020-12-31 cmn:PreviousYearMember 38812424 2020-12-31 38812424 2019-12-31 38812424 2020-01-01 2020-12-31

38812424 2019-01-01 2019-12-31

38812424 2020-01-01 38812424 2019-01-01 38812424 2020-01-01 2020-12-31 0 38812424 2020-01-01 2020-12-31 1 iso4217:EUR xbrli:pure Faerch Group A/S Rasmus Færchs Vej 1 7500 Holstebro Denmark +45 99 10 10 10 dk@faerch.com 38812424 2021-03-01 Niels Smedegaard Andersen 2020-01-01 2020-12-31 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Management statement</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">The Executive Management and Board of Directors have today considered and adopted the Annual Report of Faerch Group A/S for the financial year 1 January – 31 December 2020.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">The Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements in the Danish Financial Statements Act and the Parent Company Financial Statements are prepared in ac-cordance with the Danish Financial Statements Act. Management’s Review is prepared in accordance with the Danish Financial Statements Act.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position at 31 December 2020 of the Group and the Company and of the results of the Group and Company operations and consolidated cash flows for the financial year 1 January - 31 December 2020.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">In our opinion, Management’s Review includes a true and fair account of the development in the operations and financial circumstances of the Group and the Company, of the results for the year and of the financial position of the Group and the Company as well as a description of the most significant risks and elements of uncertainty facing the Group and the Company.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">We recommend that the Annual Report be adopted at the Annual General Meeting.</td></tr></table> Holstebro 2021-03-01 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="5">Business model</td></tr><tr><td colspan="5">Faerch has a platform-oriented business model that drives a cost leadership position via standardisation, while providing the industry’s broadest and most innovative product range to our customers. A combination of standardised manufacturing processes with a high level of operational flexibility to achieve a diverse product range, enables Faerch to provide customers with innovative quality solutions, delivered on time, and at competitive prices.</td></tr><tr><td colspan="5">In-depth material expertise and process know-how allow optimisation and reduce material loss in the production processes. It also generates an ability to use and re-use recyclable raw materials for development of sustainable offerings across product categories. In addition, Faerch’s material knowledge allows us to continue to push boundaries of our tray attributes to the benefit of customers – for example, dual colour, high impact strength, 1 mm stacking height, sealing properties or glass clear transparency.</td></tr><tr><td colspan="5">To maintain and grow our position in the market, while evolving with our stakeholders, Faerch takes a long-term approach to our own development. By competing in carefully selected markets and applications where we know we can make a difference, and by maintaining significant investments in research, quality equipment and motivated employees, Faerch is committed to staying true to our business model - our DNA.</td></tr><tr><td colspan="5">Leading the industry’s transition towards true circularity</td></tr><tr><td colspan="5">Thomas Bak Thellesen</td></tr><tr><td colspan="5">Director Group Sustainability & External Affairs</td></tr><tr><td colspan="5">Food packaging plays a crucial role in ensuring the safety of food products. But we need to be mindful of the impacts that our activities can have on the world around us. As a leading provider of food packaging and PET recycling, we are aware of our responsibility to address the challenges our industry is facing. Responsible business practice and sustainability have long been at the heart of our DNA, business strategy and daily operations, and we are committed to helping drive our industry towards true circularity.</td></tr><tr><td colspan="5">Over the years, we have been at the forefront of leading technology, expert knowledge and best practice within the packaging industry. We have introduced products with market-leading shares of post-consumer recycled content, and with our recycling facilities at 4PET in the Netherlands, we have become the only food packaging company in the world to operate as an integrated tray recycler, allowing us to recycle used food trays back into new food grade products at industrial scale.</td></tr><tr><td colspan="5">Over the course of 2020, we continued our focus on making food packaging circular. With food trays made from up towards 100% post-consumer recycled content, we are proud to claim that true circularity in food packaging is not a distant vision but a reality at Faerch today. The Evolve by Faerch concept is a perfect example of how to achieve a circular economy. The trays are made from European post-consumer recycled content and are fully recyclable into new food grade trays of the same quality – again and again.</td></tr><tr><td colspan="5">50 million rPET trays in one month</td></tr><tr><td colspan="5">Our recycling business is yet another important pillar on our industry’s journey of making food packaging truly circular. With the acquisition of 4PET Recycling in 2018, we successfully closed the loop on food trays, offering tray- to-tray recycling on an industrial scale. At the beginning of 2020, we took over the remaining 4PET shares and initiated a comprehensive investment programme to optimise our tray-to-tray recycling capacity. Our aim is that the tray line will serve as a blueprint for scaling tray- to-tray recycling into additional regions.</td></tr><tr><td colspan="5">With positive results from the investment programme the ramp-up in volume will gradually move towards an annual capacity of 25,000-30,000 tonnes during 2021.</td></tr><tr><td colspan="5">As an indication of this, the total recycling amount corresponded to 25 million post-consumer trays in August 2020, which progressively moved towards 50 million at the end of the year in December 2020. The target is to reach 800 milliontrays end of 2021.</td></tr><tr><td colspan="5">A need for industry transparency</td></tr><tr><td colspan="5">While we have continued to demonstrate significant progress in designing the right products for circularity, we strive to achieve more. For circular packaging, the share of recycled post-consumer content is the most important indicator for sustainability. At Faerch, we believe that more transparency is needed in the industry to help customers compare and access products properly. Consequently, we have started to offer third party validated certificates outlining the rPET percentages of our recipes based on post-consumer content. Our aim is to set a new industry standard allowing customers and consumers to identify and distinguish the real sustainability level of a food packaging product.</td></tr><tr><td colspan="5">Learn more about our initiatives and progress on the following pages.</td></tr><tr><td colspan="5">Thomas Bak Thellesen</td></tr><tr><td colspan="5">Director Group Sustainability and External Affairs</td></tr><tr><td colspan="5">Sustainability governance structure</td></tr><tr><td colspan="5">Sustainability is core to Faerch’s values both in terms of our business thinking and practices. Doing business with integrity has always been part of the way we operate. It defines how we behave, and it guides how we do business. We work with responsibility, fundamental respect for labour rights, environmental and climate consideration, principles of anti-corruption and fair competition.</td></tr><tr><td colspan="5">We support the principles of the UN Global Compact, OECD’s Principles of Corporate Governance, the UN Sustainability Development Goals and comply with recognised best practice.</td></tr><tr><td colspan="5">Managing performance</td></tr><tr><td colspan="5">Our sustainability governance structure provides the platform for keeping our goals and ambitions on track, and it sets a clear framework for our priorities, roles and responsibilities. The structure makes sure that our sustainability strategy and targets are continuously developed and anchored across the Group. It enables us to embed sustainability into our business-agenda - from our long-term, corporate strategy to our daily operations and priorities.</td></tr><tr><td colspan="5">The governance structure is divided into four levels: The executive management level, business unit level, regional level and local level. Through policies, standards, management systems, procedures and risk management, we ensure that sustainability is truly embedded across the Faerch Group.</td></tr><tr><td colspan="5">Executive management level</td></tr><tr><td colspan="5">- Setting direction for the comprehensive long-term work related to Faerch’s sustainability development.</td></tr><tr><td colspan="5">Business unit level</td></tr><tr><td colspan="5">- Resource allocation to enhance continuous sustainability development in the individual business units</td></tr><tr><td colspan="5">- Reporting on non-financial data.</td></tr><tr><td colspan="5">Regional level</td></tr><tr><td colspan="5">- Specific focus areas supporting Faerch’s ambition levels and priorities</td></tr><tr><td colspan="5">- Stakeholder engagement and collaboration.</td></tr><tr><td colspan="5">Local level</td></tr><tr><td colspan="5">- Implementation of concrete initiatives and improvements in line with the Group’s overall long-term plans and vision.</td></tr><tr><td colspan="5">Assessing our areas of priority</td></tr><tr><td colspan="5">Faerch operates in a constantly changing world, and we need to be aware of and react to the external changes that can impact our business. Assessing materiality helps us identify and prioritise the sustainability issues that matter the most to our business and stakeholders. And it helps us channel our resources and activities to the areas where we can have the strongest impact.</td></tr><tr><td colspan="5">As part of our materiality assessment identifying our main economic, environmental, ethical and social impacts, a set of key areas were identified.</td></tr><tr><td colspan="5">The assessment engaged both external and internal stakeholder groups. The materiality matrix below shows the 14 most important areas that were identified, their relevance to our stakeholders, their influence on our business, as well as their link to the UN Sustainable Development Goals. We still believe that these 14 issues are relevant and important to Faerch today as an overall guidance, and they therefore continue to form the basis of our defined five focus areas.</td></tr><tr><td colspan="5">Sustainable packaging</td></tr><tr><td colspan="5">Food safety</td></tr><tr><td colspan="5">Responsible operations</td></tr><tr><td colspan="5">People & organisation</td></tr><tr><td colspan="5">Business ethics</td></tr><tr><td colspan="5">Our key stakeholders</td></tr><tr><td colspan="5">- Our customers (food producers, distributors and retailers)</td></tr><tr><td colspan="5">- NGOs</td></tr><tr><td colspan="5">- End-users</td></tr><tr><td colspan="5">- Employees</td></tr><tr><td colspan="5">- Local communities</td></tr><tr><td colspan="5">- Academia</td></tr><tr><td colspan="5">Our focus areas & ambition levels</td></tr><tr><td colspan="5">At Faerch, we recognise the severe economic, social and environmental challenges our planet is facing. As a leading company within rigid plastic packaging and recycling for the food industry, we are committed to acting as a responsible company and define priorities and actions for our business, now and in the future.</td></tr><tr><td colspan="5">We have chosen to dedicate our focus to five specific areas that are directly linked to our core business. These focus areas are directly linked to five UN Sustainable</td></tr><tr><td colspan="5">Development Goals where we believe we can create the biggest impact.</td></tr><tr><td colspan="5">Each focus area has a long-term level of ambition supported by actions. Our ambition is to be the leader in sustainable packaging and food safety. Each focus area has defined KPIs supporting our long-term ambition and sustainable development.</td></tr><tr><td colspan="5">Sustainable packaging</td></tr><tr><td colspan="5">Lead the way in creating true circularity in food packaging</td></tr><tr><td colspan="5">13 Climate Action</td></tr><tr><td colspan="5">12 Responsible Consumption and Production</td></tr><tr><td colspan="5">9. Industry, innovation and infrastructure</td></tr><tr><td colspan="5">Food safety</td></tr><tr><td colspan="5">Be the leader in methods and products, which protect food, extend shelf life and reduce food waste</td></tr><tr><td colspan="5">12 Responsible Consumption and Production</td></tr><tr><td colspan="5">Level of ambition</td></tr><tr><td colspan="5">LEAD</td></tr><tr><td colspan="5">“To lead” means we will create competitive advantages and market differentiation through innovative and sustainable products.</td></tr><tr><td colspan="5">Responsible operations</td></tr><tr><td colspan="5">To minimise CO2 emissions from own activities</td></tr><tr><td colspan="5">12 Responsible Consumption and Production</td></tr><tr><td colspan="5">7. Affordable and clean energy</td></tr><tr><td colspan="5">People and organisation</td></tr><tr><td colspan="5">To secure workplace with focus on employee development</td></tr><tr><td colspan="5">8 Decent work and economic growth</td></tr><tr><td colspan="5">Level of ambition</td></tr><tr><td colspan="5">DEVELOP</td></tr><tr><td colspan="5">“To develop” means we will strengthen and ensure our position and good practice by being a responsible producer and company.</td></tr><tr><td colspan="5">Business ethics1</td></tr><tr><td colspan="5">To ensure orderly and responsible business practice</td></tr><tr><td colspan="5">16. Peace, Justice and strong institutions</td></tr><tr><td colspan="5">Level of ambition</td></tr><tr><td colspan="5">COMPLY</td></tr><tr><td colspan="5">“To comply” means that we will adhere to legislation and applicable standards within responsible and ethical business practice.</td></tr><tr><td colspan="5">1 The focus area “Business Ethics” is covered in section “Governance”.</td></tr><tr><td colspan="5">The UN Sustainable Development Goals</td></tr><tr><td colspan="5">In 2015, the United Nations drew up a roadmap for peace and prosperity for people and the planet, now and in the future. This resulted in 17 Sustainable Development Goals (SDGs) that represent an unprecedented opportunity to take sustainability to a new level.</td></tr><tr><td colspan="5">While we support all the SDGs, we focus our efforts on the goals and targets that are the most important to our business and where we believe we can make the most meaningful contribution. As we move forwards, we will continue to add actions and initiatives to support the SDGs.</td></tr><tr><td colspan="5">Our Priority SDG's</td></tr><tr><td colspan="5">7. Affordable and clean energy</td></tr><tr><td colspan="5">8 Decent work and economic growth</td></tr><tr><td colspan="5">9. Industry, innovation and infrastructure</td></tr><tr><td colspan="5">12. Responsible Consumption and Production</td></tr><tr><td colspan="5">13. Climate Action</td></tr><tr><td colspan="5">THE EXTENDED PRODUCER RESPONSIBILITY</td></tr><tr><td colspan="5">A game changer in the European circular economy</td></tr><tr><td colspan="5">To truly achieve circularity, we need to rethink our use of resources collaboratively and collectively. Products need to be designed in a way that allows them to remain a valuable resource after use.</td></tr><tr><td colspan="5">Over the past decade, we have seen an important transition within the food packaging market towards mono-materials. Due to this transition, the PET market has grown causing a shift from the use of virgin materials to post-consumer recycled material (PCR) from plastic bottles. However, further action is needed to build a true circular packaging economy.</td></tr><tr><td colspan="5">Faerch took the first steps toward true circularity in 2018, where 4PET Recycling became part of Faerch Group.</td></tr><tr><td colspan="5">Since then, the Extended Producer Responsibility (EPR) has started to play a more essential part in the packaging industry’s navigation and targets. By December 31st, 2024, EPR must be introduced to all EU countries, and producers’ responsibility for their products will be extended beyond its current scope – to also include the post- consumer phase of a product’s lifecycle.</td></tr><tr><td colspan="5">Faerch Group regards the Extended Producer Responsibility as a gamechanger in the European circular economy, as it pushes the industry to design products made for circularity. Within the packaging industry, using recycled flakes from bottles has been an important first step, but it does not solve the climate or environmental challenges that we are facing. Instead of implementing recycled content from other industries, we, as an industry, need to look at our own products and how they can be integrated into the circular economy. A true circular economy where applications are recycled into the same quality and product type - again and again. Instead of implementing recycled content from the bottle industry, an essential focus on closing the loop is vital, hence tray-to- tray recycling is the final frontier in a circular PET economy.</td></tr><tr><td colspan="5">Leading by example</td></tr><tr><td colspan="5">“One of the key enablers of circularity is to design with recycling in mind. As producers we must think in holistic systems and continue to work tirelessly towards taking complexity out of our products to allow true circularty. An important milestone in the systemic transition was the addition of our tray recycling facility in the Netherlands allowing us to offer tray to tray recycling on an industrial scale”, says Thomas Bak Thellesen, Director Group Sustainability & External Affairs</td></tr><tr><td colspan="5">Faerch invites all industry and public stakeholders to focus on the source of their post-consumer recycled content and to join the aim for a circular PET economy based on tray- to-tray circularity.</td></tr><tr><td colspan="5">Mono-material PET allows for true circularity, as it can be recycled back into food grade products again and again – without compromising on functional properties, in particular food safety.</td></tr><tr><td colspan="5">Tray content is a type of PCR. It is made exclusively from recycled pots, tubs and trays material, not recycled bottles. This is beneficial for the environment because bottle grade rPET should be preserved for bottle-to-bottle recycling in order for beverage producers to meet their own demanding recycled content targets, and valuable food contact material from trays should be reintroduced in the circular PET economy as new trays – again and again.</td></tr><tr><td colspan="5">LEGISLATION AND TAX</td></tr><tr><td colspan="5">How to speed up a circular economy</td></tr><tr><td colspan="5">Faerch’s mission is to create a circular economy, keeping materials in the loop and out of the environment. Our aim is to design food trays made from recycled materials that can be reproduced into new food trays of the same quality – again and again.</td></tr><tr><td colspan="5">“This is not a distant vision. At Faerch, we are working on making rigid food packaging truly circular. Our products are recyclable, and our PET products contain market-leading shares of post-consumer recycled content – and with our recycling facility in the Netherlands, we have become an integrated recycler and do tray-to-tray recycling on an industrial scale”, says Thomas Bak Thellesen, Director Group Sustainability & External Affairs.</td></tr><tr><td colspan="5">“Across Europe, we see a growing commercial interest in recycling PET food packaging into food grade material. But we need to speed up and increase our ambitions. We cannot expect the transition towards a circular economy to be driven by consumer demand alone. We need action at many levels, and at Faerch, we see a need for progressive legislation. We believe that a common European tax on food packaging, that does not contain a minimum percentage of post-consumer recycled content, could positively stimulate the industry and infrastructure . The aim should be to create incentives for making better mono-material waste streams. We welcome progressive actions from decision makers around Europe and see great potential in collection and sorting on a European level”, he adds.</td></tr><tr><td colspan="5">The benefits of a circular economy</td></tr><tr><td colspan="5">The great potential for a European circular plastics economy is widely recognised. Substituting virgin raw material with post-consumer plastics will decrease CO2 emissions massively while preserving valuable materials in circulation.</td></tr><tr><td colspan="5">“As a society, we need to commit to moving faster towards a circular economy for food packaging and as a company with more than 50 years of experience in the sector, we believe that PET is the fastest and most viable way for this to happen. The transition can be further accelerated if it is supported by legislation”, says Thomas Bak Thellesen.</td></tr><tr><td colspan="5">Key drivers to enable true circularity</td></tr><tr><td colspan="5">- European countries to impose bonuses or fees on food packaging that does not contain a minimum percentage of post-consumer recycled tray material.</td></tr><tr><td colspan="5">- More focus on using mono-materials, as this is a prerequisite towards a circular economy</td></tr><tr><td colspan="5">- National regulators need to focus on building systems that incentivise the use of circular materials</td></tr><tr><td colspan="5">In the beginning of 2021, France incorporated a bonus structure incentivising the use of recycled materials derived from households, such as tray PCR.</td></tr><tr><td colspan="5">CO2 emissions</td></tr><tr><td colspan="5">-60%</td></tr><tr><td colspan="5">PET tray - 100% virgin material vs. PET tray - 100% recycled material</td></tr><tr><td colspan="5">FULL TRANSPARENCY</td></tr><tr><td colspan="5">Helping customers assess sustainability in food packaging</td></tr><tr><td colspan="5">Using recycled content is an important strategy to reduce the environmental impact of food packaging and to promote circularity. However, when talking about recycled content, it is important to be aware of its source. When something is labelled as being made with “recycled content”, it can be derived from two sources: Pre-consumer recycled content and post-consumer recycled content. Both sources are accepted as rPET, but it is important to distinguish between the two, as their environmental benefits are not comparable.</td></tr><tr><td colspan="5">For circular packaging, the share of recycled post- consumer content is the most important indicator for sustainability. However, to allow customers to compare products, an industry standard is needed.</td></tr><tr><td colspan="5">What is the difference between pre- and post-consumer recycled content?</td></tr><tr><td colspan="5">Pre-consumer recycled content includes materials diverted from the waste stream during the manufacturing process. Post-consumer recycled content refers to materials that have been placed in the recycling bin by the end-user after use, such as plastic bottles and food trays. These materials are then collected and transported to recycling facilities where they are sorted and made into new materials.</td></tr><tr><td colspan="5">Post-consumer recycled material (PCR) is the preferred source of recycled content, as it allows the industry to continuously cycle the materials it puts on the market and avoid material value loss. This is fundamental to limiting environmental impact, including the use of virgin raw materials and its related CO2 emissions.</td></tr><tr><td colspan="5">Faerch’s position on recycled content in food packaging</td></tr><tr><td colspan="5">When producers choose to include different material input streams, it is important to provide full transparency to allow an accurate comparison between the end products’ material compositions. The aim is to avoid eroded unspecified rPET percentages, where internal regrind and/ or post-industrial content and/or internal pre-consumer content are being communicated as recycled content by the packaging industry. These instances should not be compared with rPET percentages that are based on post-consumer content, which have a real environmental impact.</td></tr><tr><td colspan="5">“At Faerch, sustainable packaging embraces a circular economy approach that values the reuse of materials. To help our customers assess and compare the sustainability performance of our products, we have launched an industry first initiative where we can offer certificates outlining the PCR percentage in each of our recipes.</td></tr><tr><td colspan="5">The percentages are determined using strict calculation methods, and they are validated by an external and independent auditor.</td></tr><tr><td colspan="5">At Faerch, we will never include internal virgin scrap as part of the post-consumer or pre-consumer percentage. By setting this new industry standard, we will create a unique benchmark for customers in the food packaging industry.”, says Thomas Bak Thellesen, Director Group Sustainability & External Affairs.</td></tr><tr><td colspan="5">Sustainability in our value chain</td></tr><tr><td colspan="5">Faerch is a leading manufacturer of plastic packaging and we are aware that the scale of our business and our activities have far-reaching environmental, social and economic impacts.</td></tr><tr><td colspan="5">A circular economy</td></tr><tr><td colspan="5">Creating circularity in food packaging has topped our agenda for many years and in 2018, we took a significant step in closing the loop on food trays with the acquisition of 4PET Group. The acquisition enables 100% recycling of the same material, for the same use, turning used food trays into a valuable resource rather than waste. When a tray is consumed, it is disposed, collected and processed into a new tray – and the circle repeats itself.</td></tr><tr><td colspan="5">To reduce negative impacts and to make sure that we continue to add value and deliver competitive advantages to our customers, we have defined a set of actions to each stage in our value chain.</td></tr><tr><td colspan="5">Suppliers & Sourcing</td></tr><tr><td colspan="5">• Supplier Code of Conduct</td></tr><tr><td colspan="5">• Supplier audits</td></tr><tr><td colspan="5">• Responsible packaging activities</td></tr><tr><td colspan="5">Product Development</td></tr><tr><td colspan="5">• Delivering technical solutions for circularity</td></tr><tr><td colspan="5">• Packaging to extend food shelf life and reduce food waste</td></tr><tr><td colspan="5">• Reducing packaging weight</td></tr><tr><td colspan="5">• Reducing stacking height</td></tr><tr><td colspan="5">• Meeting high standards & going beyond food safety legislation</td></tr><tr><td colspan="5">• Innovative mono-material solutions improving recyclability</td></tr><tr><td colspan="5">Production: Extrusion/Thermoforming</td></tr><tr><td colspan="5">• Raw material: Recycled plastic</td></tr><tr><td colspan="5">• Reducing energy consumption through specific environmental projects</td></tr><tr><td colspan="5">• Minimising plastic waste in the production</td></tr><tr><td colspan="5">• Investing in energy effective technology</td></tr><tr><td colspan="5">• Implementing specific activities to reduce work-related accidents</td></tr><tr><td colspan="5">• Training our employees in occupational health</td></tr><tr><td colspan="5">Logistics</td></tr><tr><td colspan="5">• Reducing shipment by producing trays closer to customer locations</td></tr><tr><td colspan="5">• Compiling transportation by delivering more trays in one truckload due to reduced stacking height</td></tr><tr><td colspan="5">• Optimising vehicle motors</td></tr><tr><td colspan="5">• Reducing outer packaging</td></tr><tr><td colspan="5">At the customer</td></tr><tr><td colspan="5">• Helping customers to extend food shelf life and optimise their packaging solutions</td></tr><tr><td colspan="5">• Working with retailers on improving recycling rates of plastic trays</td></tr><tr><td colspan="5">• Bringing new knowledge on sustainable packaging to our customers</td></tr><tr><td colspan="5">• Testing packaging used in a closed loop system</td></tr><tr><td colspan="5">• Helping customers reduce their CO2 footprint by offering</td></tr><tr><td colspan="5">alternatives to aluminium foil and cans</td></tr><tr><td colspan="5">• Training our employees in anti- corruption and fair competition</td></tr><tr><td colspan="5">At the end-user</td></tr><tr><td colspan="5">• Convenient packaging for single household, helping reduce food waste</td></tr><tr><td colspan="5">• Long shelf life reducing food waste</td></tr><tr><td colspan="5">• Positive food experience</td></tr><tr><td colspan="5">MAIN IMPACTS</td></tr><tr><td colspan="5">Minimising plastic waste</td></tr><tr><td colspan="5">Minimising CO2 emissions</td></tr><tr><td colspan="5">Reducing work-related accidents</td></tr><tr><td colspan="5">Sustainable development goals</td></tr><tr><td colspan="5">The UN’s 2030 Sustainable Development Goals have created a framework for addressing sustainability issues and creating a plan of actions in the areas of critical importance to the global society.</td></tr><tr><td colspan="5">We are committed to making the SDGs operational and to identifying future business opportunities. By reviewing the areas of importance determined by the materiality assessment, we explore how we can support the SDGs linking them to our value chain and our business.</td></tr><tr><td colspan="5">Currenctly, the Faerch business will focus on how we can make the biggest impact on the five UN SDG’s highlighted in the table.</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Reduction of CO2 emissions</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">13. Take urgent action to combat climate change</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">13.2 Integrate climate change measures into policies, strategies and planning</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Sustainable Packaging</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">CO2 emissions with increased use of recycled plastic.</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Supplies & Sourcing</td></tr><tr><td colspan="5">Product Development</td></tr><tr><td colspan="5">Production</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Recycled plastic</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">12. Ensure sustainable consumption and production patterns</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">12.4 Achieve the environmentally sound management of chemicals and all wastes throughout their life cycle and significantly reduce their release to air, water and soil in order to minimise their adverse impacts on human health and the environment.</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Sustainable Packaging</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Quantity of recycled plastic used in production</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Production</td></tr><tr><td colspan="5">Product Development</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Technical solutions for waste sorting</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">9.4 Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Sustainable Packaging</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Development of Cradle-to-Cradle approach through a colour pigment – black ID – to identify and sort back trays in mixed householdwaste.</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Customers</td></tr><tr><td colspan="5">End-users</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Reduction of food waste</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">12. Ensure sustainable consumption and production patterns</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">12.3 Reduce food waste at the retail and consumer levels and reduce food losses along production and supply chains.</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Food safety</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Number of reported cases of migration tests</td></tr><tr><td colspan="5">Improvement sealing properties of trays to prolong food shelf life and reduce food waste.</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Suppliers & Sourcing</td></tr><tr><td colspan="5">Product Development</td></tr><tr><td colspan="5">Customers</td></tr><tr><td colspan="5">End-users</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Recycled plastic</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">12. Ensure sustainable consumption and production patterns</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">12.5 Substantially reduce waste generation through prevention, reduction, recycling and reuse.</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Responsible Operations</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Plastic waste as percentage of raw materials.</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Product Development</td></tr><tr><td colspan="5">Production</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Effective production</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">7. Ensure access to affordable, reliable, sustainable and modern enegy for all</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">7.2. Increase substantially the share of renewable energy</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">Responsible Operations</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Energy consumption</td></tr><tr><td colspan="5">100 % powered by electricity from renewable energy sources</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Production</td></tr><tr><td colspan="5">Logistics</td></tr><tr><td colspan="5">Materiality Area</td></tr><tr><td colspan="5">Safe workplace</td></tr><tr><td colspan="5">Sustainable Development Goal</td></tr><tr><td colspan="5">8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.</td></tr><tr><td colspan="5">Sustainable Development Target</td></tr><tr><td colspan="5">8.8 Protect labour rights and promote safe and secure working environments for all workers.</td></tr><tr><td colspan="5">Faerch’s Focus Area</td></tr><tr><td colspan="5">People and organisation</td></tr><tr><td colspan="5">Faerch’s KPI</td></tr><tr><td colspan="5">Accident frequency</td></tr><tr><td colspan="5">Value chain involvement</td></tr><tr><td colspan="5">Production</td></tr><tr><td colspan="5">Supporting international standards</td></tr><tr><td colspan="5">Our progress and reporting are based on the principles of the UN Declaration of Human Rights, the ILO conventions and the UN Global Compact.</td></tr><tr><td colspan="5">Even though Faerch has not joined the UN Global Compact, we see it as an important framework for our sustainability efforts. To meet fundamental responsibilities in areas of human rights, labour, environment and anti-corruption, we therefore align our strategies, policies and procedures to its principles and guidelines.</td></tr><tr><td colspan="5">The table below illustrates how we approach and implement the ten principles of the UN Global Compact.</td></tr><tr><td colspan="5">Our Policies</td></tr><tr><td colspan="5">Sustainability Policy</td></tr><tr><td colspan="5">Human Rights Policy</td></tr><tr><td colspan="5">Statement on the Prevention of Slavery and Human Trafficking</td></tr><tr><td colspan="5">Trade Sanctions in the Product Supply</td></tr><tr><td colspan="5">Agreements for raw materials and packaging</td></tr><tr><td colspan="5">How the Policy Supports the UN Global Compact</td></tr><tr><td colspan="5">Ensuring continuous growth and development supporting and respecting the protection of internationally proclaimed human rights and good business ethics.</td></tr><tr><td colspan="5">Example of Policy Implementation</td></tr><tr><td colspan="5">Anchoring sustainability by ensuring that roles and responsibilities related to sustainable development in in Faerch are defined and communicated through Group Form on Sustainability Governance.</td></tr><tr><td colspan="5">Monitoring and measuring progress towards sustainability through Group Procedure on non-financial data on sustainable development.</td></tr><tr><td colspan="5">Ensuring that our economic and financial transactions are in line with the applicable economic sanction laws and international trade restrictions, including providing information to our distributors about product final destination.</td></tr><tr><td colspan="5">Our Policies</td></tr><tr><td colspan="5">Supplier Code of Conduct</td></tr><tr><td colspan="5">How the Policy Supports the UN Global Compact</td></tr><tr><td colspan="5">Ensuring responsible supplier management, defining and communicating expectations to our suppliers in terms of developing responsible business practices.</td></tr><tr><td colspan="5">Example of Policy Implementation</td></tr><tr><td colspan="5">Carrying out supplier audits of top suppliers of raw materials, additives, colours, packaging and supplementary range.</td></tr><tr><td colspan="5">Our Policies</td></tr><tr><td colspan="5">Environment, Health & Safety Policy</td></tr><tr><td colspan="5">How the Policy Supports the UN Global Compact</td></tr><tr><td colspan="5">Reducing own footprint, meeting high health & safety standards and creating a workplace culture based on commitment and responsibility.</td></tr><tr><td colspan="5">Example of Policy Implementation</td></tr><tr><td colspan="5">IS014001 Management System</td></tr><tr><td colspan="5">Risk assessment of production equipment</td></tr><tr><td colspan="5">Prevention of work-related injuries through analysis tools.</td></tr><tr><td colspan="5">Our Policies</td></tr><tr><td colspan="5">People Policies</td></tr><tr><td colspan="5">Health Promotion Policy</td></tr><tr><td colspan="5">Employee Development Policy</td></tr><tr><td colspan="5">How the Policy Supports the UN Global Compact</td></tr><tr><td colspan="5">Ensuring equal opportunities at the workplace, eliminating discrimination in respect of employment and occupation and recognising the right to collective bargaining.</td></tr><tr><td colspan="5">Example of Policy Implementation</td></tr><tr><td colspan="5">Initiating health promoting initiatives; performing external training; defining individual development plans (as a part of Employee Performance and Development Review); supporting employee intercultural & professional development through international secondments.</td></tr><tr><td colspan="5">Our Policies</td></tr><tr><td colspan="5">Legal Compliance Policy</td></tr><tr><td colspan="5">Gifts Policy</td></tr><tr><td colspan="5">Anti-corruption Policy</td></tr><tr><td colspan="5">Fair Competition Policy</td></tr><tr><td colspan="5">Procurement Policy</td></tr><tr><td colspan="5">How the Policy Supports the UN Global Compact</td></tr><tr><td colspan="5">Working against corruption in all its forms, increasing employees’ understanding of the rules and minimising the risk of breaking the rules.</td></tr><tr><td colspan="5">Example of Policy Implementation</td></tr><tr><td colspan="5">Training in fair competition and anti-corruption, including e-learning programme.</td></tr><tr><td colspan="5">Sustainable packaging</td></tr><tr><td colspan="5">The focus area “Sustainable packaging” involves everything we do to minimise the environmental impact of our products. In terms of manufacturing, it is important that we look at the composition of our products and continuously aim to increase the share of recycled PET derived from trays in our product recipes and production processes and aim to integrate a truly closedloop where used trays are collected and processed into new trays.</td></tr><tr><td colspan="5">This will help us reduce plastic waste and CO2 emissions.</td></tr><tr><td colspan="5">Our aim is to take a leading position in the use of recycled plastic.</td></tr><tr><td colspan="5">Scope</td></tr><tr><td colspan="5">Manufacturing and recycling of plastic trays creating a closed loop within food packaging.</td></tr><tr><td colspan="5">13 CLIMATE ACTION</td></tr><tr><td colspan="5">12 RESPONSIBLE CONSUMPTION AND PRODUCTION</td></tr><tr><td colspan="5">9 INDUSTRY, INNOVATION AND INFRASTRUCTURE</td></tr><tr><td colspan="5">Guidelines</td></tr><tr><td colspan="5">European Strategy for Plastics in a Circular Economy.</td></tr><tr><td colspan="5">Reuse and recyclability of own materials in own operational setup and the market, reaching a true “closed loop".</td></tr><tr><td colspan="5">Impact</td></tr><tr><td colspan="5">Impact waste</td></tr><tr><td colspan="5">Impact mitigation by optimising design proposals to minimise material consumption, by developing partitioned packaging, and by designing trays with smaller portion sizes to avoid dispose of surplus food.</td></tr><tr><td colspan="5">CO2 emissions</td></tr><tr><td colspan="5">Impact mitigation by increasing the share of recycled plastic in our product formulas and manufacturing processes; by rethinking product composition in existing and new products, material and processes.</td></tr><tr><td colspan="5">Risk & challenges</td></tr><tr><td colspan="5">Plastic waste management, mainly outside Europe, remains an immense challenge. We need to build a new mentality and customer behaviour moving away from the throwaway culture.</td></tr><tr><td colspan="5">Performance progress</td></tr><tr><td colspan="5">CO2 emissions with increased use of recycled plastic (21g CPET tray)</td></tr><tr><td colspan="5">Kg/CO2 equivalents per 1,000 trays</td></tr><tr><td colspan="5">Bottom bars = Emissions with initatives</td></tr><tr><td colspan="5">Middle bars = Saved due to rPET</td></tr><tr><td colspan="5">Topbars = Saved due to renewables</td></tr><tr><td colspan="5">CO2 emissions with increased use of recycled plastiv (12g APET tray)</td></tr><tr><td colspan="5">Kg/CO2 equivalents per 1,000 trays</td></tr><tr><td colspan="5">Bottom bars = Emissions with initatives</td></tr><tr><td colspan="5">Middle bars = Saved due to rPET</td></tr><tr><td colspan="5">Topbars = Saved due to renewables</td></tr><tr><td colspan="5">Quantity of recycled plastic used in production</td></tr><tr><td colspan="5">2010 = index 100</td></tr><tr><td colspan="5">Food safety</td></tr><tr><td colspan="5">Food safety is essential to our business, and even more so than ever, consumers should always be confident that the food that they buy is packaged and designed for food contact.</td></tr><tr><td colspan="5">Our aim is to maintain a leading position within rigid food packaging while complying with the strictest food safety requirements. Guaranteeing food safety is our key priority. Without that, our efforts to achieve circularity and reduced environmental impacts will have no value.</td></tr><tr><td colspan="5">At Faerch, we therefore continuously develop methods and processes to ensure and validate food safety for our products.</td></tr><tr><td colspan="5">Scope</td></tr><tr><td colspan="5">Continuously monitor methods and approaches to improve or uphold food safety requirements.</td></tr><tr><td colspan="5">12 RESPONSIBLE CONSUMPTION AND PRODUCTION</td></tr><tr><td colspan="5">Guidelines</td></tr><tr><td colspan="5">FCM shall comply with Article 3 of 1935/2004; this applies to all food contact material.</td></tr><tr><td colspan="5">Regulation (EU) 10/2011, explains in great detail “what plastic converters have to do in order to comply” with 1935/2004.</td></tr><tr><td colspan="5">Impact</td></tr><tr><td colspan="5">Impact mitigation by developing food safe mono-PET packaging solutions with a high content of recycled material that additionally enables long shelf life, consequently reducing the carbon footprint from food waste and enabling circularity.</td></tr><tr><td colspan="5">Risk & challenges</td></tr><tr><td colspan="5">It may be difficult for end-users to distinguish between different types of plastic packaging and their purpose. Hence, we will continue to promote and produce food safe mono-material PET solutions and work with academia on topics such as food safety and circularity.</td></tr><tr><td colspan="5">Performance progress</td></tr><tr><td colspan="5">Number of reported cases of migration tests</td></tr><tr><td colspan="5">0 out of 24</td></tr><tr><td colspan="5">test in 2020</td></tr><tr><td colspan="5">2019: 1 case out of 26 tests</td></tr><tr><td colspan="5">2018: 0 cases out of 32 tests</td></tr><tr><td colspan="5">2017: 0 cases out of 21 tests</td></tr><tr><td colspan="5">2016: 0 cases out of 21 tests</td></tr><tr><td colspan="5">Responsible operations</td></tr><tr><td colspan="5">The focus area “Responsible operations” involves everything we do to ensure that our production is effecient. We are aware that the reach and scale of our activities can impact the environment, society and people. It is therefore important to keep our factory footprints as low as possible.</td></tr><tr><td colspan="5">To ensure that we significantly reduce the environmental impact of producing, using and disposing our packaging solutions, we continuously pursue new ways and methods to reduce emissions and to improve resource consumption and waste management.</td></tr><tr><td colspan="5">Scope</td></tr><tr><td colspan="5">Ensure that our production is effecient in the way we utilise resources and by this, minimising our environmental footprint.</td></tr><tr><td colspan="5">12 RESPONSIBLE CONSUMPTION AND PRODUCTION</td></tr><tr><td colspan="5">7 AFFORDABLE AND CLEAN ENERGY</td></tr><tr><td colspan="5">Guidelines</td></tr><tr><td colspan="5">Group Quality Policy</td></tr><tr><td colspan="5">Group Environment, Health & Safety Policy</td></tr><tr><td colspan="5">IS0 14001 Management System</td></tr><tr><td colspan="5">Impact</td></tr><tr><td colspan="5">Plastic waste</td></tr><tr><td colspan="5">Impact mitigation by establishing a common solution for transparent and comparable reporting on waste management.</td></tr><tr><td colspan="5">CO2 emissions</td></tr><tr><td colspan="5">Impact mitigation by defining and implementing specific projects; investing in sustainable technology, optimising transportation and minimising imperfections resulted in repeated work.</td></tr><tr><td colspan="5">Risk & challenges</td></tr><tr><td colspan="5">It is important that we strive to strike a balance between sustaining a high level of product quality while also ensuring high production efficiency and responsible manufacturing processes.</td></tr><tr><td colspan="5">Performance progress</td></tr><tr><td colspan="5">Energy Consumption</td></tr><tr><td colspan="5">Mwh / tonne produced finished goods</td></tr><tr><td colspan="5">Plastic Waste</td></tr><tr><td colspan="5">Plastic waste as a percentage of raw materials</td></tr><tr><td colspan="5">People & organisation</td></tr><tr><td colspan="5">Health & safety</td></tr><tr><td colspan="5">We strongly believe that it is our people and organisation that bring our values to life and generate our business results. Their commitment to our business and our customers is vital to the success and long-term growth of our business. People & Organisation is therefore an important focus area.</td></tr><tr><td colspan="5">We are committed to maintaining high standards of health and safety across the Group’s business units and we continue to implement new initiatives to help us ensure that our workplace is attractive. We believe this is key to achieving our long-term objectives.</td></tr><tr><td colspan="5">Scope</td></tr><tr><td colspan="5">Maintaining high standards of health & safety at our workplace</td></tr><tr><td colspan="5">Guidelines</td></tr><tr><td colspan="5">Environment, Health & Safety Policy</td></tr><tr><td colspan="5">Health Promotion Policy</td></tr><tr><td colspan="5">Impact</td></tr><tr><td colspan="5">Work-related accidents/heavy lifting</td></tr><tr><td colspan="5">Impact mitigation by automating work processes in the operation areas and investing in equipment to remedy risk of manual movements and muscular strain.</td></tr><tr><td colspan="5">Risk & challenges</td></tr><tr><td colspan="5">It is important to continue addressing safety performance as a key element of our operations and to prevent workplace hazards and occupational risk in a busy working environment.</td></tr><tr><td colspan="5">Performance progress</td></tr><tr><td colspan="5">Accident frequency</td></tr><tr><td colspan="5">Total work accidents per one million working hours</td></tr><tr><td colspan="5">People & organisation</td></tr><tr><td colspan="5">People</td></tr><tr><td colspan="5">Scope</td></tr><tr><td colspan="5">Ensuring our position as an ambitious and responsible company by focusing on employee development and succession management.</td></tr><tr><td colspan="5">8 DECENT WORK AND ECONOMIC GROWTH</td></tr><tr><td colspan="5">Guidelines</td></tr><tr><td colspan="5">Human Rights Policy incl. development, training and diversity.</td></tr><tr><td colspan="5">People Policies incl. Employee Development Policy.</td></tr><tr><td colspan="5">Tools</td></tr><tr><td colspan="5">Employee Development Review</td></tr><tr><td colspan="5">Individual Development Plan</td></tr><tr><td colspan="5">Career Development Paths</td></tr><tr><td colspan="5">On-boarding Programme</td></tr><tr><td colspan="5">Impact</td></tr><tr><td colspan="5">We wish to develop our employees to support our strong growth and to be able to scale up the organisation.</td></tr><tr><td colspan="5">Risk & challenges</td></tr><tr><td colspan="5">To scale up the organisation and thereby continue to support our strong growth, it is important that we develop our people and structures further.</td></tr><tr><td colspan="5">We will strengthen our core skills and competences in and across specific functions and expand our succession management.</td></tr><tr><td colspan="5">We will maximise new employee integration through enhanced on-boarding.</td></tr><tr><td colspan="5">Performance progress</td></tr><tr><td colspan="5">Our people are key to our success, and as a result of our rapid growth over the last few years, we need to make sure that we support and develop our people in an adequate way.</td></tr><tr><td colspan="5">With the acquisition of the Sirap business across five sites in Italy, Poland and Spain, we achieved our largest acquisition to date. This called for further strengthening of our people development agenda, to reflect our accelerated growth and addressing the following areas</td></tr><tr><td colspan="5">Our Culture and Heritage</td></tr><tr><td colspan="5">As a rapidly growing company, we want to ensure our strong culture is integrated into our acquired companies. Building on a deep technical, material and operational knowledge, we know that our efficient production set-up provides a competitive advantage. We are also very aware that our unique culture of simplicity, agility, execution and decency will be essential in order to scale up our business even further and to go global. It is the foundation of out future success as a leader in sustainable packaging for the food industry and our ability to drive a closed loop model on an industrial scale</td></tr><tr><td colspan="5">Employee and Career Development</td></tr><tr><td colspan="5">To be able to provide support and development, we continue to assess the strengths, preferences and needs of our key people. We also identified potential risks, e.g. in critical positions where no successor would have been available when needed in case of retirement, promotion or job rotation etc.</td></tr><tr><td colspan="5">Therefore, our Employee Development Review process supports the individual development of our employees.</td></tr><tr><td colspan="5">The purpose of the individual development plan is to ensure a structured approach in agreeing on, working with and following up on long-term career development objectives. It provides an overview of learnings and reflections from both employee, manager and possible other stakeholders, and it helps measure progress and success and ultimately reaching the long-term objective.</td></tr><tr><td colspan="5">We practice career development through internal recruitment. We see it as our responsibility to encourage employees to improve their skills and remain aware of the opportunities available for their continued development.</td></tr><tr><td colspan="5">Employee Development</td></tr><tr><td colspan="5">Career development, internal recruitments</td></tr><tr><td>30%</td><td>29%</td><td>27%</td><td>35%</td><td>38%</td></tr><tr><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2020</td></tr><tr><td colspan="5">Training Examples</td></tr><tr><td colspan="5">Individual Development Coaching</td></tr><tr><td colspan="5">• Leadership training in the form of a 6 month individual development coaching</td></tr><tr><td colspan="5">• Assessment of the manager’s foundation based on a personality profile</td></tr><tr><td colspan="5">• Through dialogue, selection of top 2-3 priority development areas using the IDP to drive and follow-up on development progress</td></tr><tr><td colspan="5">• Coaching combined with relevant leadership and management tools and training to support and push for sustainable development</td></tr><tr><td colspan="5">• Action learning with continuous follow-up based on the daily leadership challenges</td></tr><tr><td colspan="5">Regional Senior Team</td></tr><tr><td colspan="5">- Management Training</td></tr><tr><td colspan="5">• Situational Leadership</td></tr><tr><td colspan="5">• 4D clarity profiles</td></tr><tr><td colspan="5">• Setting SMART goals & making them clear</td></tr><tr><td colspan="5">• Diagnosing development levels</td></tr><tr><td colspan="5">• Flexible leadership styles & partnering for performance</td></tr><tr><td colspan="5">• Getting things done more effectively</td></tr><tr><td colspan="5">– time management</td></tr><tr><td colspan="5">• Effective 1-2-1 reviews</td></tr><tr><td colspan="5">• Getting people to self-diagnose and reflect</td></tr><tr><td colspan="5">Site based & Middle Management Training</td></tr><tr><td colspan="5">• Understanding the role & expectations of the Faerch Manager</td></tr><tr><td colspan="5">• Learning how to motivate, direct, coach and performance manage people to maximise results</td></tr><tr><td colspan="5">• Team dynamics & taking control</td></tr><tr><td colspan="5">• Performance management using the 4P’s model</td></tr><tr><td colspan="5">• Passengers / Prisoners / Protestors / Players</td></tr><tr><td colspan="5">• Interactive workshop & across the region</td></tr><tr><td colspan="5">Graduate Programme and Trainees</td></tr><tr><td colspan="5">Faerch’s Graduate Programme offers ambitious and aspiring people the opportunity to learn how to navigate in an international and fast-paced organisation.</td></tr><tr><td colspan="5">Initially, four tracks were developed – Operations & Engineering; Technical & Innovation; Supply Chain & Procurement and Finance & Transformation. Due to COVID-19, we have so far only recruited one graduate for the Operations & Engineering track. We introduced the Faerch Graduate Programme in 2019, and the first graduate started in September 2020.</td></tr><tr><td colspan="5">The programme supports young talent in their career development and adds new knowledge and perspectives to our business.</td></tr><tr><td colspan="5">We offer an 18-month programme, in the course of which the graduate will have an opportunity to learn about our company culture, getting insights into the different aspects of our business, and developing a strong toolbox.</td></tr><tr><td colspan="5">Additionally, with a placement at one of our locations in Europe, the graduate will gain international experience, broaden his or her own perspectives, and learn about our international markets, challenges and opportunities. Through the entire programme, the graduate will have a career mentor to help and guide on his or her professional career path, personal growth and development.</td></tr><tr><td colspan="5">With the great insight into our business and our culture obtained through the programme, further career opportunities will be possible for the right candidates.</td></tr><tr><td colspan="5">Trainees and Apprentices</td></tr><tr><td colspan="5">Faerch offers apprenticeships as a unique platform for future growth.</td></tr><tr><td colspan="5">At this year’s National Danish Entrepreneurship Festival, we were awarded the winner of the Apprenticeship category.</td></tr><tr><td colspan="5">We employ trainees and apprentices to ensure development of competences. We especially focus on four areas</td></tr><tr><td colspan="5">Automation Technician Apprentice</td></tr><tr><td colspan="5">To ensure the right level of technical skills and possible promotion into NPI or other technical roles</td></tr><tr><td colspan="5">Sales apprentice/trainee</td></tr><tr><td colspan="5">To promote feeding system from Sales Coordinator to external sales candidate</td></tr><tr><td colspan="5">Apprentice within plastics</td></tr><tr><td colspan="5">To ensure the right competences especially in Extrusion</td></tr><tr><td colspan="5">Finance apprentice/trainee</td></tr><tr><td colspan="5">To promote feeding system from accounting into controlling</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="7">Gender Proportion among the Members of the Board of Directors</td></tr><tr><td colspan="7">There was no requirement to appoint any new members of the Group’s Board in 2020. The current members of the Board have not changed. The Group’s Board continues to be engaged in increasing the total number of female members.</td></tr><tr><td colspan="7">Members of the Board elected at the annual general meeting</td></tr><tr><td /><td /><td /><td /><td /><td>20%</td><td>women</td></tr><tr><td>100%</td><td>100%</td><td>100%</td><td>100%</td><td>100%</td><td>80%</td><td>men</td></tr><tr><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2020</td><td>GOAL</td></tr><tr><td colspan="7">Gender Proportion on Manager Level</td></tr><tr><td colspan="7">By the end of 2020, the gender distribution among managers was 79% men and 21% women, trending towards more men compared to women in manager roles. This calls for an evaluation of our ability to attract women to leadership positions and not least to retain women in leadership positions.</td></tr><tr><td colspan="7">We report on the total gender proportion for all managers in the Faerch Group. In this connection, senior manager and manager represent one reporting category.</td></tr><tr><td colspan="7">Manager level</td></tr><tr><td>2018</td><td>2019</td><td>2020</td></tr><tr><td>26%</td><td>24%</td><td>21%</td></tr><tr><td>women</td><td>women</td><td>women</td></tr><tr><td>74%</td><td>76%</td><td>79%</td></tr><tr><td>men</td><td>men</td><td>men</td></tr></table><br><table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Diversity</td></tr><tr><td colspan="1">We are an international growth organisation, and we want to maintain our reputation as a workplace committed to ensuring fair and equal treatment and opportunities for all employees regardless of age, gender, nationality etc. We foster a workplace culture where differences are respected and valued.</td></tr><tr><td colspan="1">Our policy on gender proportion aims to increase the number of women at management level and to improve the representation of women in management at Faerch in general, in accordance with Danish Company Act No. 610 of 28 April 2015, Section 13 9a.</td></tr><tr><td colspan="1">With a clear objective to enhance diversity in our workforce, we promote and encourage equal opportunities, ensuring that all aspects of our personnel practices promote women’s and men’s equal career opportunities, including hiring procedures and conditions, recruitment and parental leave conditions. Additionally, we strive, where possible, to find both female and male candidates in both internal and external recruitment.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Independent auditor’s report</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">To the Shareholders of Faerch Group A/S</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Opinion</td></tr><tr><td colspan="1">In our opinion, the Consolidated Financial Statements give a true and fair view of the Group’s financial position at 31 December 2020 and of the results of the Group’s operations and cash flows for the financial year 1 January to 31 December 2020 in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.</td></tr><tr><td colspan="1">Moreover, in our opinion, the Parent Company Financial Statements give a true and fair view of the Parent Company’s financial position at 31 December 2020 and of the results of the Parent Company’s operations for the financial year 1 January to 31 December 2020 in accordance with the Danish Financial Statements Act.</td></tr><tr><td colspan="1">We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of Faerch Group for the financial year 1 January - 31 December 2020, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company, as well as statement of comprehensive income and cash flow statement for the Group (“financial statements”).</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Basis for Opinion</td></tr><tr><td colspan="1">We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Statement on Management’s Review</td></tr><tr><td colspan="1">Management is responsible for Management’s Review.</td></tr><tr><td colspan="1">Our opinion on the financial statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.</td></tr><tr><td colspan="1">In connection with our audit of the financial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.</td></tr><tr><td colspan="1">Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financials Statements Act.</td></tr><tr><td colspan="1">Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement in Management’s Review.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Management’s Responsibilities for the Financial Statements</td></tr><tr><td colspan="1">Management is responsible for the preparation of Consolidated Financial Statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act and for the preparation of Parent Company Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.</td></tr><tr><td colspan="1">In preparing the financial statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Auditor’s Responsibilities for the Audit of the Financial Statements</td></tr><tr><td colspan="1">Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.</td></tr><tr><td colspan="1">As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also</td></tr><tr><td colspan="1">• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.</td></tr><tr><td colspan="1">• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.</td></tr><tr><td colspan="1">• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.</td></tr><tr><td colspan="1">• Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern.</td></tr><tr><td colspan="1">• Evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.</td></tr><tr><td colspan="1">• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.</td></tr><tr><td colspan="1">We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.</td></tr></table> Aarhus 2021-03-01

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Årsrapport 38812424 Faerch Group A/S Rasmus Færchs Vej 1 7500 Holstebro 2019-01-01 2019-12-31 Revisionspåtegning Lars Gade Hansen CEO Arne Holme CTO Jesper Emil Jensen Regional CEO Continental Europe Tom Sand-Kristensen CFO Nils Smedegaard Andersen Chairman Sönke Renk Ronald John Edward Marsh Laurent Bendavid Markus Brettschneider Sven Seidel

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PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Claus Lindholm Jacobsen State Authorised Public Accountant mne23328 Jens Weiersøe Jakobsen State Authorised Public Accountant mne30152 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab