TenCate doubles net profit in first half of 2010
(Thomson Reuters ONE) -
Highlights of first half of 2010
· Sales up 5% to ?454.6 million (4% organic; 1% currency effect)
· EBITA ?38.2 million (+83%; organic 89%; +7% currency effect; -13%
acquisitions/divestments)
· EBITA margin 8.4% (first half of 2009: 4.8%)
· Net profit ?19.6 million (2009: ?10.0 million, after adjustment for
non-recurring items)
· Strong profit recovery in the Geosynthetics & Grass sector due to cost
control and efficiency measures
· Debt/EBITDA ratio 2.7
· Sales of TenCate Defender(TM) M expected to return to original level in
second half of 2010
Loek de Vries, Executive Board Chairman and CEO: 'The net profit has doubled
compared to the first half of 2009, after adjustment for over ?5 million of net
non-recurring income during the period. The interim results demonstrate the
positive effects of the measures taken, particularly in the Geosynthetics &
Grass sector.
On a lower volume of sales, the operating result in the second quarter of this
year returned almost to the level recorded before the economic crisis (in
comparison with the figure for the second quarter of 2008).
In the synthetic turf activities, changes to both operational and commercial
policies have been implemented, which have made an important positive
contribution to the rise in income.
The geosynthetics activities have also shown profit growth, partly as a result
of good cost control.
As a result of the developments referred to above, the EBITA margin of the
Geosynthetics & Grass sector rose from 2.3% to 8.3% in the first six months of
2010.
The reorganisation of the Dutch businesses involved in protective fabrics
(TenCate Advanced Textiles) proved effective. The broadening of the product
portfolio, which related in particular to the optimisation of characteristics
such as wearing comfort and protection, led to an increased order intake.
Sales of protective fabrics to the US Army are expected to return to the
original level in the second half of the year. Products with the Multicam print
are now being delivered.
The outlook for aerospace and armour composites is improving. More positive news
is coming out of the aircraft industry, and the destocking in the supply chain
appears to be at an end.
In view of these developments, the Advanced Textiles & Composites sector is
expected to deliver an increased contribution to sales and profit in the second
half of the year compared to the first six months.'
Performance in the second quarter
Sales rose 14% in the second quarter compared to the same period in 2009, to
?263.1 million (+6% organic; +5% currency effect; +3% acquisitions/divestments).
This rise was due almost entirely to the Geosynthetics & Grass sector.
Sales in the Grass group showed considerable growth in the second quarter. That
was partly due to the restrained sales policy in the fourth quarter of 2009
(reduction in off-season sales). The Geosynthetics group showed an (organic)
increase in sales in all regions in the second quarter.
Apart from the decrease in sales of protective fabrics for the US defence market
(TenCate Defender (TM) M and TenCate Gen2 products), almost all other activities
in the Advanced Textiles & Composites sector showed sales growth in the second
quarter of 2010.
The sales growth in the industrial market for protective fabrics was due in
particular to successful market launches, such as TenCate Tecasafe(TM) Plus.
This also provided a positive boost for the Dutch business, which, as European
market leader, focuses particularly on the industrial market.
Sales of composites also showed a rise during the period compared to the
previous year.
The overall result was a slight decrease in sales in the Advanced Textiles &
Composites sector in the second quarter.
EBITA (operating result before amortisation of intangible assets) rose in the
second quarter from ?13.4 million in 2009 to ?30.1 million in 2010, with the
largest rise occurring in the Geosynthetics & Grass sector.
Other (financial) information
The cash flow from operating activities in the first half of the year amounted
to ?17 million (2009: ?42 million).
A restrained investment policy remains in force in view of the current economic
climate. The total amount invested in fixed assets in the first half of the year
was ?9.1 million (2009: ?8.1 million).
The net interest-bearing debt at the end of June 2010 amounted to ?238.0 million
(end of June 2009: ?287.2 million). The debt/EBITDA ratio was 2.7 (maximum of
3.0 under bank covenant).
The financial income and expenses item decreased by ?4.2 million. This
difference is mainly due to the write-down of a minority interest which had been
included in the 2009 figures.
Earnings per share in the first six months of 2010 rose 27% from ?0.62 to ?0.78.
Outlook for 2010
The recovery in the results means that TenCate is financially well placed to
give greater priority to the buy & build strategy. On that basis, the growth is
expected to continue, both organically and through acquisitions. Considerable
profit growth is expected in the second half of the year compared to the second
half of 2009.
Individual sector commentaries
Advanced Textiles & Composites
+--------------+---------+---------+
| (x ?m) | H1 2010 | H1 2009 |
+--------------+---------+---------+
| Net sales | 193.0 | 215.3 |
+--------------+---------+---------+
| EBITA | 16.1 | 20.3 |
+--------------+---------+---------+
| EBITA margin | 8.3% | 9.4% |
+--------------+---------+---------+
The Advanced Textiles & Composites sector showed a sales decrease of 10% in the
first half of the year (-13% organic; +1% currency effect; +2%
acquisitions/divestments).
Sales of protective fabrics declined overall. This was due to the temporary
decrease in purchases by the US Army as a result of the changes to the
specifications of the camouflage print. Sales in industrial markets rose, in
both Europe and the US. Sales in Asia also increased.
Sales of aerospace and armour composites were at approximately the same level as
in the first six months of 2009. In the first six months of this year, however,
there was an additional sales contribution from AML UK. The activities in the US
showed sales growth in almost all areas.
Sales of armour composites in Europe decreased, partly as a result of
delays/postponements of government orders.
European sales in the aircraft industry remained low.
The outlook for the European armour and aerospace activities is improving. The
aviation sector is gradually recovering. Targeted internal international
co-operation within the Advanced Armour market group, coupled with the
acquisition of AML UK, has resulted in a strategic reinforcement.
The 27% organic decrease in EBITA in the first half of the year was due
particularly to the aforementioned decrease in defence sales associated with the
TenCate Defender(TM)M and TenCate Gen2 products. The currency effect and the
effect of acquisitions/divestments on EBITA amounted to +2% and +3%
respectively.
A reorganisation provision of over ?2 million was also recognised in respect of
the Dutch activities in the first quarter. These effects put downward pressure
on the EBITA margin.
Geosynthetics & Grass
+--------------+---------+---------+
| (x ?m) | H1 2010 | H1 2009 |
+--------------+---------+---------+
| Net sales | 226.7 | 192.8 |
+--------------+---------+---------+
| EBITA | 18.8 | 4.5 |
+--------------+---------+---------+
| EBITA margin | 8.3% | 2.3% |
+--------------+---------+---------+
The sales growth in the Geosynthetics & Grass sector amounted to 18% (+18%
organic; +2% currency effect; -2% acquisitions/divestments). The sales growth
was attributable particularly to the Grass group, and there was also an
increased contribution from the related downstream activities.
The geosynthetics markets in the US and Europe developed favourably, although it
is still premature to speak of a structural recovery. TenCate strengthened its
position in the Asian market; commercial activities in the Asian infrastructure
project market and the environmental market are increasing.
Following the policy changes implemented in the commercial and operational
areas, there has been a significant recovery of sales in the synthetic turf
businesses (approximately 35% growth). The Grass group's inventories have
decreased, due to the priority given to cash management.
The synthetic turf market in Europe is reluctant, although there is increased
demand for high-quality products and systems, particularly in the football
segment. TenCate is meeting this demand with products and system warranties and
close co-operation with market participants.
EBITA rose 316% (+369% organic; +20% currency effect; -73%
acquisitions/divestments).
The results improved both in Geosynthetics and in the Grass group. The Grass
group recorded the biggest improvement, however, as a result of the measures
taken.
Technologies / Technical Components / Holding & Services
+-----------+---------+---------+
| (x ?m) | H1 2010 | H1 2009 |
+-----------+---------+---------+
| Net sales | 34.9 | 25.5 |
+-----------+---------+---------+
| EBITA | 3.3 | - 3.9 |
+-----------+---------+---------+
The sales growth of the other activities, including the operating activities of
TenCate Enbi and Xennia Technology, amounted to 37% (+34% organic; +3% currency
effect).
TenCate Enbi staged a strong turnaround. The cost structure was further reduced,
and the market is picking up. The outlook for TenCate Enbi has therefore
improved considerably.
Xennia Technology achieved significant commercial and strategic progress.
Exclusive contracts were entered into with various producers of machines (OEMs)
and components (printer heads) for a range of applications. Xennia focuses on
the top segment of the market for industrial applications for inkjet printing.
Xennia's offering comprises turnkey systems and related products (components,
inks). The commercial sale of specialists inks (textile printing, ceramics
industry) was launched at the end of the first half of this year.
This technology is important for TenCate as a method for applying nano-surface
coatings. It is also an extremely environmentally friendly and sustainable
technology.
Statement of the Executive Board
'The Executive Board hereby declares that, to the best of their knowledge, the
semi-annual financial statements, which have been prepared in accordance with
lAS 34, "lnterim Financial Reporting", give a true and fair view of the assets,
liabilities, financial position and profit of Royal TenCate and the undertakings
included in the consolidation as a whole, and the semi-annual management report
includes a fair review of the information required pursuant to section 5:25d,
subsections 8 and 9 of the Dutch Financial Markets Supervision Act (Wet op het
financieel toezicht).'
Almelo, Thursday 26 August 2010
Royal Ten Cate nv
--------------------------------------------------------------------------------
For further information:
The press conference on the 2010 half-year figures will be webcast on Thursday
26 August 2010 between 10:30 am and 12:00 noon. Register at www.tencate.com.
F.R. Spaan, Director of Investor Relations & Corporate Development
Telephone : +31 546 544 977
Mobile : +31 612 96 17 24
E-mail :f.spaan(at)tencate.com
Internet :www.tencate.com
Royal Ten Cate nv (TenCate) is a multinational company which combines textile
technology, chemical processes and material technology in the development and
production of functional materials with distinctive characteristics. TenCate's
products are sold worldwide.
TenCate's systems and materials can be subdivided into four areas of
application: Safety & Protection, Aerospace, Infrastructure & Environment and
Sport & Recreation. TenCate occupies leading positions in safety fabrics,
aerospace composites, antiballistics, geosynthetics and synthetic turf. TenCate
is listed on NYSE Euronext (AMX).
[HUG#1440412]
Press release as PDF:
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Source: Koninklijke Ten Cate NV via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 26.08.2010 - 08:01 Uhr
Sprache: Deutsch
News-ID 40113
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