Climate Change Data

Environmental Metrics

ESG Focus Areas

• Social
• Environmental
• Governance

Social Achievements

• Reduced employee headcount by 2.4% while maintaining productivity.
• Maintained an absenteeism rate below 3%.

Governance Achievements

• The board is composed of 60% independent directors.

Climate Goals & Targets

Environmental Challenges

• Impact of the Covid-19 pandemic, particularly affecting the aviation sector.
• Dependence on a limited number of clients.
• Cyclicality of the aviation, medical, biomedical, and optical communications markets.
• Competition from similar-sized companies and multinational groups.
• Long sales cycles in the aviation and medical sectors.
• Long development cycles for custom products.
• Global geopolitical and economic environment.
• Dependence on a limited number of suppliers for certain materials.
• Risk of technology substitution.
• High R&D investment with associated technological risk.
• Protection of intellectual property rights.

Mitigation Strategies

• Pursuing a strategy focused on high value-added segments (aviation, medical, optical communications).
• Seeking new opportunities to increase and diversify the client portfolio.
• Strengthening commercial, industrial, and technological relationships with existing clients.
• Developing the group's aeronautical activities.
• Diversifying product portfolios to address end markets with different cycles.
• Maintaining a sustained R&D effort (14% of consolidated revenue in 2020).
• Implementing competitive monitoring and actions to protect intellectual property.
• Strengthening relationships with key clients through multi-year framework contracts.
• Developing European production capacities.
• Strengthening internal export skills in association with specialized consulting firms.
• Rigorous selection of leading suppliers.
• Implementing a policy of safety stocks for critical materials and components.
• Developing multiple sourcing strategies.
• Advanced technological monitoring to anticipate future market trends.
• Selecting R&D programs in close coordination with existing clients.
• Annual review of assumptions underlying forecasts, obsolete stocks, capitalized R&D expenses, and long-term asset impairment.
• Implementing a policy for the protection of intellectual property rights.
• Implementing a policy of non-competition and confidentiality clauses in employment contracts.
• Regular monitoring of exchange rate risk by the group's financial management.
• Subscribing to foreign exchange forward contracts to hedge certain sales.
• Regular monitoring of liquidity risk by the group's financial management.
• Implementing a policy of consolidated cash management.
• Strict adherence to health and safety procedures to protect personnel.
• Adapting production organization to confinement measures.
• Strengthening communication with suppliers and clients to ensure supply chain continuity.
• Strengthening the diversification strategy of the group's activities, particularly in the medical segment.

Supply Chain Management

Responsible Procurement

• Working with geographically and culturally close suppliers located in countries with strong rule of law.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 9001 (US site), EN AS 9100 and ISO 13485 (Norway site)

Environmental Metrics

ESG Focus Areas

• Social
• Environmental
• Governance

Social Achievements

• Reduced average full-time equivalent employees by 29.4% from 58.6 in 2021 to 41.3 in 2022 due to the divestiture of the US Custom Products business.

Governance Achievements

• The Board of Directors is composed of 60% independent directors as of December 31, 2022.

Climate Goals & Targets

Environmental Challenges

• Concentration of activity on a limited number of clients.
• Cyclical nature of the aeronautics, medical, and optical communications markets.
• Competition.
• Long sales cycles in the aeronautics and medical sectors.
• Global geopolitical and economic environment.
• Dependence on a limited number of suppliers for certain materials.
• Assets necessary for operation.
• Operation of hazardous products.
• Technology/product substitution for MEMS technology.
• Investment in R&D and associated technological risk.
• Intellectual property and proprietary rights.
• Exchange rate risk.
• Liquidity risk.
• COVID-19 pandemic.

Mitigation Strategies

• Constantly seeking new opportunities to increase and diversify the client portfolio.
• Strengthening commercial, industrial, and technological relationships with existing clients.
• Advanced commercial and industrial integration with major clients.
• Development of the Group's aeronautics activities.
• Diversification of product portfolios.
• Maintaining a sustained R&D effort.
• Competitive monitoring and actions implemented to protect the Group's intellectual property.
• Strengthening relationships with key clients through the development of multi-year framework contracts.
• Integration of annual production forecasts adjusted quarterly into these contracts.
• Specific monitoring of international trade relations.
• Development of European production capacities.
• Strengthening export skills internally.
• Rigorous selection of leading suppliers.
• Policy of safety stocks of critical materials and components.
• Development of multiple sources of supply.
• Implementation of a long-term lease for the Norwegian production site.
• Advanced technological and commercial monitoring to identify potential violations of the Company's proprietary rights.
• Policy for the protection of the Group's intellectual property.
• Industrial protection policy.
• Regular monitoring of exchange rate risk by the Group's financial management.
• Subscription of currency forward contracts.
• Procedures to reduce exposure to financial exchange rate risk.
• Regular monitoring of liquidity risk by the Group's financial management.
• Policy for the management of consolidated cash flow.
• Strict adherence to health and safety procedures.
• Adaptation of production organization to containment measures.
• Strengthened communication with suppliers and clients.
• Strengthening the Group's diversification strategy.

Supply Chain Management

Responsible Procurement

• Works only with suppliers geographically and culturally close to its industrial locations and located in states of law in Europe and North America.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: EN AS 9100 and ISO 13485 (Norway)

Environmental Metrics

ESG Focus Areas

• Social
• Environmental

Social Achievements

• Improved employee wellbeing initiatives in Norway, resulting in a low absenteeism rate (below 4%).

Governance Achievements

• The board is composed of 60% independent directors. The company adheres to the Middlenext Corporate Governance Code.

Climate Goals & Targets

Environmental Challenges

• Dependence on a limited number of clients (top 10 clients represent 74% of revenue).
• Cyclical nature of the aeronautics, medical, and optical communications markets.
• Competition from similar-sized companies and multinational groups.
• Long sales cycles in aeronautics and medical sectors.
• Global geopolitical and economic environment.
• Dependence on a limited number of suppliers for certain materials.
• Risk of technology substitution.
• Investment in R&D and associated technological risk.
• Protection of intellectual property.

Mitigation Strategies

• Constantly seeking new opportunities to increase and diversify the client portfolio.
• Strengthening commercial, industrial, and technological relationships with existing clients.
• Advanced commercial and industrial integration with major clients.
• Development of aeronautical activities with increased market visibility.
• Diversification of product portfolios.
• Sustained R&D effort (11% of consolidated revenue in 2023).
• Competitive monitoring and actions to protect intellectual property.
• Strengthening relationships with key clients through multi-year contracts.
• Specific monitoring of international trade relations.
• Development of European production capacities.
• Strengthening export skills internally.
• Rigorous selection of leading suppliers.
• Safety stock policy for critical materials and components.
• Development of multiple sourcing strategies.
• Regular review of production forecasts with key clients.
• Long-term lease for the Norwegian production site.
• Specific supervision and controls to ensure compliance with safety standards.
• Specific insurance covering risks.
• Rigorous selection of subcontractors.
• Safety stock policy for critical finished products.
• Development of multiple subcontracting sources.
• Regular review of production forecasts with key clients.
• Strict adherence to health and safety procedures.
• Adaptation of production organization to confinement measures.
• Enhanced communication with suppliers and clients.
• Strengthening the diversification strategy of the Group's activities.

Supply Chain Management

Responsible Procurement

• The Group works only with suppliers geographically and culturally close to its industrial locations and located in states of law in Europe and North America.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Middlenext Corporate Governance Code

Certifications: EN AS 9100 and ISO 13485 (Norway)