.009
Strategic
report
Corporate
governance
Financial
statements
HeiQ plc
Annual report and accounts 2020
The ability to rapidly adapt to a changing
environment in a smart way and with
innovative ideas is clearly one of HeiQ’s
core strengths. This has enabled us to
become well established and a rapidly
expanding company across multiple
significant growth markets, including the
US$24 billion textile chemicals market
and the US$10 billion antimicrobial
textiles market. During the last year, the
market for sanitation and disinfection
has grown enormously due to the
Covid-19 pandemic. We seized the
opportunity to contribute to combating
the pandemic and expand our product
assortment by launching HeiQ Viroblock
and by establishing ourselves in the
medical devices market, producing
personal protective equipment (PPE)
like antiviral face masks that are more
protective than conventional ones. Both
the outstanding success of HeiQ
Viroblock and entering the PPE market
have contributed strongly to our revenue
growth. At the end of the year, HeiQ
acquired a controlling stake in the
Spanish medical device production
plant MasFabEs in order to in-source
medical device manufacturing
knowhow for future R&D in the key
strategic field of PPE.
It is noteworthy that this all took place
whilst sustaining a healthy level of sales
activities with the regular products.
Despite the global economic headwinds
that affected many of our industry peers
severely, we were able to grow our
revenue with the regular product range.
New products and application ideas
are continuously being developed by
the HeiQ innovation hubs, in close
cooperation with customers, as well as
with over 20 universities around the
world. As demonstrated by HeiQ
Viroblock, HeiQ rapidly researches new
solutions for partners, quickly delivers
scale-up manufacturing from its sites
across the world and helps partners
market the product to end consumers
– from lab to consumer in months.
The continuous flow of our innovation
pipeline is ingrained, and 2021 has
commenced with a healthy, promising
innovation pipeline.
After such a boost in growth and going
public, other tasks like the refinement of
our strategy, Company structure and
corporate processes and systems are
being enhanced to cope with the
increased demands of the business, as
well as from a governance perspective.
These are in the process of being
diligently implemented. We also decided
to repay most current bank loans in
December 2020 whilst retaining
significant credit line facilities with
the banks.
Dividend
In order to take advantage of the
momentum created in 2020 and
invest into the growth opportunities,
the Board has decided not to pay a
dividend from 2020 retained earnings.
Board
At the time of re-admission to trading
on the London Stock Exchange, all
Board Members of the former
Auctus Growth Plc resigned and the
new HeiQ plc Board was appointed.
Of the five new directors, three were
Board members of the former parent
company of the Group (HeiQ Materials
AG): Ben Bergo (NED), Carlo Centonze
(Executive Director and Group CEO)
and me (NED). In addition, Karen
Brade (NED) and Xaver Hangartner
(Executive Director and Group CFO)
joined the Board. With a Board of five
directors (of which three are non-
executive), we believe we have a
balanced, diversified and experienced
team to lead the whole Group on
behalf of the shareholders in an
efficient and effective way. I have
been impressed with the approach
and achievements of the Board since
we became a public company and
look forward to working with this team
and building the Group.
The Board meets frequently to
challenge and support the dynamic
management team. Audit,
Remuneration and Nomination
Committees have also been in place
since Re-admission.
Governance
Upon admission to the London Stock
Exchange’s Main Market, HeiQ has
chosen to adopt the QCA Corporate
Governance Code (the ‘Code’) on a
comply or explain basis. The Code is
constructed around ten broad
principles and how we have complied
with each of these can be found in our
Corporate Governance report
contained within the Annual Report to
be posted to shareholders shortly.
Outlook
The £20 million of new capital raised
(before expenses) in December 2020
will support our ambitious expansion
strategy to diversify beyond textiles to
become a leader in materials
innovation. HeiQ is investing in
additional personnel, geographic
expansion, strategic alliances,
regulatory registrations, product
development, technology platforms
and M&A activities. We are in
discussion with a number of targets
which fit and complement our
offerings for our partners and
customers.
Since the start of the pandemic last
year, we have all become much more
aware of pathogens on the surfaces
we touch and the health risks
associated. This is driving increased
market demand for material
innovations that enable better
microbial management on surfaces,
such as packaging and other printed
surfaces, as highlighted by some
recent notable contract wins. We
acquired 51% of Chrisal NV, a Belgium
based company which offers expertise
in probiotics/synbiotics in March
2021. This is a new technology
platform for HeiQ and provides us with
access to the US$50 billion global
probiotic market.
We will also invest to develop existing
and new technologies, and to better
monetize them and expand into new
markets. Although this will increase
our cost base in the short term, it is
expected to contribute to a healthy
and profitable growth in the mid and
long term.
I am extremely proud to chair and to
be part of HeiQ. Its employees
continually surprise me. Despite not
having a lot of personal contact due to
the workforce being spread all over
the world under travel restrictions and
home office requirements, they are
nevertheless fulfilling their tasks with
enthusiasm, team spirit and a big
sense of responsibility.
On behalf of the Board, I would like to
thank the whole HeiQ team which has
performed in the most extraordinary
way to achieve the impressive overall
2020 result. We have set ourselves
ambitious goals for 2021 in an
uncertain environment and I am
confident that, through our dedication
and effort, we will achieve them.
Esther Dale-Kolb
Chairwoman