TenCate profit growth of 69% to €33.1 million

Highlights of first half of 2011:

• Revenue growth of 30% to €592.4 million (+27% autonomous; -4% currency effect; +7% acquisitions / divestments).
• EBITA €56.1 million; +47% (+60% autonomous; -11% currency effect; -2% acquisitions / divestments).
• Net profit €33.1 million (+69%).
• Revenue growth in the Advanced Textiles & Composites sector (+56% autonomous) as a result of record sales of TenCate Defender™ M protective fabrics (military) and TenCate Tecasafe™ Plus (industry). Strong growth of interest in TenCate Defender(TM)M outside the US.
• Increase in EBITA in the Advanced Textiles & Composites sector by 156% to €41.2 million (+172% autonomous; -17% currency effect +1%; acquisition / divestments).
• Revenue growth in the Geosynthetics & Grass sector (+6% autonomous) as a result of higher sales of geosynthetics in emerging markets and new products; (upstream) revenues of TenCate Grass are stable.
• Decrease in EBITA in the Geosynthetics & Grass sector by 26% to €13.9 million (-13% autonomous; -9% currency effect; -4% acquisition / divestments); this originates in the integration of TenCate Grass downstream activities and pressure on margins due to higher raw material costs at TenCate Geosynthetics.
• Earnings per share rose by 67% to €1.30.

Loek de Vries, President and CEO: ‘TenCate’s activities showed growth across a broad front for the first six months. Against a background of constant exchange rates there was autonomous growth in revenues of 27% and EBITA grew by 60% in autonomous terms during the first half of the year.

Profit growth is the result particularly of the good performance delivered by the Advanced Textiles & Composites sector. At the Geosynthetics & Grass sector there was a decrease in EBITA as a result of, on the one hand, the integration of the downstream activities at TenCate Grass and, on the other hand, pressure on margins at TenCate Geosynthetics due to the increase in the costs of raw materials. The positive effect of passing on this increase in costs is gradually becoming visible in the results.

An important development is the integration and repositioning of the synthetic turf activities. The policy adopted, which is focused on strengthening distribution, will lead to accelerated acceptance of innovative synthetic turf systems. This in turn will result in an increase in the return and enhancement of the quality image of the TenCate brand’.

Geosynthetics & Grass Sector

The autonomous revenue growth in the Geosynthetics & Grass sector amounted to 6% (-3% currency effect; +15% acquisitions / divestments).

At TenCate Geosynthetics new markets (including South America) and new products contributed to growth to a significant extent. The acquired company Emas Kiara was integrated into the Asian geosynthetics activities. This entailed initial costs.

The increase in raw material costs had an effect primarily on the EBITA margin of TenCate Geosynthetics. At TenCate Grass this effect was limited.

The synthetic turf industry is currently going through an integration phase, in which new partnerships are being formed between the producers of components, the suppliers of systems and installers. In this context market positions have been restructured. This development initially resulted in revenue loss involving a large customer and a loss of result due to the consolidation of downstream activities. This loss in revenues has now been offset.

The consolidation effect of the downstream activities caused a delay in reporting revenues.

At the beginning of 2011 work started on a development process in order to increase the effectiveness of the integrated distribution activities in the synthetic turf market. This integral market approach is focused both on a system approach, resulting in innovative and high quality concepts, and on an increase in efficiency in business operations.

This integrated market strategy has recorded good progress, thus safeguarding a strong market position.

The EBITA of the Geosynthetics & Grass sector decreased during the first half of 2011 in autonomous terms by 13% (-9% currency effect; -4% acquisitions / divestments).

Download the full press release here, for more information on other TenCate sectors, 2011 outlook charts and more.

CONTACT

F.R. Spaan, Corporate Director, Business Development
Tel. : +31 546 544 977
Mobile : +31 612 961 724
f.spaan@tencate.com

ABOUT ROYAL TEN CATE

Royal Ten Cate nv (TenCate) is a multinational company that combines textile technology with chemical processes and material technology in the development and production of functional materials with distinctive characteristics. TenCate products are sold throughout the world. Systems and materials from TenCate come under four areas of application: safety and protection; space and aerospace; infrastructure and the environment; sport and recreation. TenCate occupies leading positions in protective fabrics, composites for space and aerospace, antiballistics, geosynthetics and synthetic turf. TenCate is listed on NYSE Euronext (AMX). www.tencate.com

Source: Koninklijke Ten Cate NV