register free | resend password

Net profit of ?15.2 million in first half of 2009 (2008: ?25.4

ID: 1003596
recent pressrelease next pressrelease

(Thomson Reuters ONE) - Highlights of first half of 2009 * Sales ?433.6 million (-15%; organic -23%; currency effect +5%) * EBITA ?20.9 million (-54%; organic -61%; currency effect +6%) * EBITA margin 4.8% (first half of 2008: 8.9%) * Net profit ?15.2 million (2008: ?25.4 million) * Net earnings per share ?0.61 (H1 2008: ?1.08) * Net profit positively impacted by ?5.2 million (net) from book profit on sale of Geofabrics Australasia pty ltd and write-down of a minority interest * Debt/EBITDA ratio comfortably within bank covenant (3); ratio at end- June: 2.5 * Free cash flow rose by ?71.3 million in first six months to ?35.0 millionLoek de Vries, Executive Board Chairman and CEO: 'TenCate is wellpositioned in long-term niche markets in which the trends that areimportant for our growth remain fully in place. The foundations ofthese core markets are still intact. We are continuing to pursue our"buy & build" strategy and will continue to exploit growthopportunities, just as we have done successfully in the past. We havea strong balance sheet position and have achieved substantial growthin our cash flow.The situation currently prevailing among banks, resulting intightness in the supply of finance, has led to reticence amongcustomers, even though projects are still being implemented.Inventory reduction has taken place on a large scale. Evengovernments and local authorities - an important group of customersfor TenCate - are postponing decisions, with delays in the provisionof budget resources.In view of this situation, from mid-April of this year we gavepriority to the maintenance of a healthy financial position. Thisavoided considerable additional financing costs and/or profitdilution and the attendant undesirable long-term effects.In view of the foundations underpinning our markets and the measureswhich have and are being taken in the cost area, TenCate has thepotential to stage a strong recovery when the markets recover.'Performance in the second quarter of 2009Sales in the second quarter totalled ?230.4 million (organic: -29%).The same period of 2008 had included a substantial order for vehiclearmour for the US Army, whereas no such order was recorded in thecurrent period. The market for vehicle armour remains a growthmarket, but the volumes are liable to fluctuate.The European market for workwear for industrial end-users was underheavy pressure.The trends in the American market for geosynthetics were unfavourableas a result of the postponement of infrastructure projects due to theinsufficient release of public-sector funding.The synthetic turf market is a seasonal market in which inventoriesare accumulated on the basis of the projects scheduled to beimplemented over the summer months. The usual inventory accumulationdid not take place.One of the consequences of the tight financial policy was a loss dueto underutilisation of capacity, which put additional pressure onearnings.Second-quarter EBITA (earnings before interest, tax and amortisation)decreased by 58% to ?13.4 million (organic -63%; currency effect+5%). The EBITA margin amounted to 5.8% (Q2 2008: 10.5%).The net profit in the second quarter of 2009 amounted to ?13.4million (Q2 2008:?18.1 million).FinancialThe strong growth in cash flow and control of working capital led toan improvement in the net debt/EBITDA ratio. At the end of the secondquarter, it stood at 2.5 (bank covenant: 3).Investments had already been scaled back at an early stage (beginningof 2008). The investment policy remained very restrained in 2009.Total investments in the first six months amounted to ?8.1 million(H1 2008: ?29.4 million).Net financing expenses rose, mainly due to the write-down of a ?4.9million non-strategic interest held by the Geosynthetics group. Thebalance of the interest income/expenses in this item in the firsthalf of 2009 was approximately ?0.7 million lower than in thecomparable period in the previous year. The interest rate on theexternal debt was lower. In contrast to the previous year, nocurrency options were purchased to hedge the translation risk, so nooption premiums were paid.The net interest-bearing debt at the end of June 2009 decreased to?287 million (2008: ?349 million).The tax charge in respect of the first six months amounted to 27%(2008: 30%).EmployeesThe workforce comprised approximately 4,200 employees at the end ofJune 2009. The number of employees worldwide has been reduced by -14%in the last 12 months, including agency personnel. In view of theparticular circumstances, consideration is being given to integratingproduction in the Netherlands with a view to achieving substantialcost reductions and an outlook driven by innovation.Outlook for the current financial yearThe market outlook remains unchanged for the rest of the year. Theupturn in demand seen at the end of March was due to the (temporary)rebuilding of production inventories and hence proved not to bestructural. Control of working capital is a continuous process inproduction chains at present, as a result of which there is acontinued lagging trend in sales.TenCate expects for the remainder of the year that the revenues willat least be on the same level as in the fist half of the year.The cost-reduction measures will have a positive effect over time.The strong financial position and the strongly increased cash flowprovide a good basis for further growth. TenCate has promising,innovative projects which will give a positive impetus to futuredevelopments.No forecast is being issued with regard to profit in the currentfinancial year.Notes on performance by sectorAdvanced Textiles & Composites+------------------------------------+| (x ?m) | H1 2009 | H1 2008*) ||--------------+---------+-----------|| Net sales | 215.3 | 246.0 ||--------------+---------+-----------|| EBITA | 20.3 | 31.2 ||--------------+---------+-----------|| EBITA margin | 9.4% | 12.7% |+------------------------------------+*) Figures adjusted for comparison purposesThe Advanced Textiles & Composites sector showed an overall organicdecrease of 24% in sales in the first half of the year. The decreaseoccurred mainly in the TenCate Advanced Composites and TenCateAdvanced Armour market groups. Most of the decrease related toinventory reductions in the aviation sector, delays in theintroduction of new aircraft and the absence of major projects in theUS armour market.The currency effect on sales in the first half of the year amountedto +7%.The organic decrease in EBITA in the first six months amounted to48%. The currency effect amounted to +10%.The Protective Fabrics market group showed an overall rise in salesin the first half of the year. Sales of flame-retardant fabrics forUS Army uniforms grew considerably. On the other hand, there was asubstantial decrease in sales in the European market for workwear forindustrial end-users.Independent tests showed that the TenCate Defender(TM) M productportfolio offers the highest degree of protection. This material iscurrently being used in various components of the standard personalequipment issued to the US Army. Protection of military personnelremains an important spearhead of innovation and growth.The expected growth in aerospace composites in 2009 has so far failedto materialise, due to the delays in the production of the AirbusA380 and the Boeing 787. Moreover, aircraft build rates have beenadjusted downwards, and this is being accompanied by a reduction ininventories across the entire value chain. TenCate has investedconsiderable sums in the past in order to accommodate the expectedgrowth. Costs will now be cut where possible, while retaining growthpotential.The recent development co-operation between the Dutch aviationcluster and both Airbus (TAPAS consortium) and Boeing (TPRC)indicates the importance of joint efforts to generate strong growthin the share of composites in aviation.TenCate maintains close relationships with various OEMs (originalequipment manufacturers) producing army vehicles in the UnitedStates. TenCate is involved in providing protection solutions forhigh-profile vehicle programmes, such as the Humvee, the Stryker, theMine Resistant Ambush Protected Vehicle (MRAP), the Medium TacticalVehicle (FMTV) series and the Joint Light Tactical Vehicle (JLTV).TenCate is currently in consultations with Oshkosh Defense, whichrecently won the contract to supply 3,944 vehicles of the MRAP AllTerrain Vehicle (M-ATV) type, and with direct suppliers in order toascertain where our technology and capacities can offer added value.As these discussions are still ongoing, it is too early to issue anystatements on them.Growth was achieved in the US in the field of composites for themilitary aviation and the space industry. An important producer ofsmall private aircraft also showed a substantial recovery in buildrates at the end of the second quarter.Geosynthetics & Grass+----------------------------------+| (x ?m) | H1 2009 | H1 2008 ||--------------+---------+---------|| Net sales | 192.8 | 236.5 ||--------------+---------+---------|| EBITA | 4.5 | 16.9 ||--------------+---------+---------|| EBITA margin | 2.3% | 7.1% |+----------------------------------+The decrease in sales in the Geosynthetics & Grass sector wasattributable mainly to the Geosynthetics group, particularly as aresult of the market situation in the US.The organic decrease in sales in the sector as a whole in the firsthalf of the year amounted to 23%. The currency effect on sales was+4%.EBITA declined much more than sales in relative terms (organicdecrease in EBITA of 72%), due to considerable underutilisation ofcapacity. Active control of working capital and the deferral ofproduction in response to the decrease in sales also contributed tothis decline.The Geosynthetics group in the US, where the economic downturn wasalready a factor from 2007, was gradually able to bring its costlevel into line with the market situation. As a result, the negativeeffect on the result was relatively more limited than in the Grassgroup. The lag in sales in the synthetic turf market was due mainlyto the shortage of liquidity among customers (marketing/installationcompanies) and the reduction in credit limits by credit insurancecompanies. The synthetic turf market has not yet reached maturity,due to the recent strong growth of the football market. As a result,TenCate is exercising restraint with regard to credit risks forparties with lower solvency and is strengthening ties with a numberof leading parties in the market (participating interest in TigerTurfin the first half of this year), which is having a positive effect onthe quality and stability of the market.Technologies / Technical Components / Holding & Services+----------------------------------+| (x ?m) | H1 2009 | H1 2008 *) ||-----------+---------+------------|| Net sales | 25.5 | 29.1 ||-----------+---------+------------|| EBITA | -3.9 | - 2.8 |+----------------------------------+*) Figures adjusted for comparison purposesFrom 2009, the figures for the new Technologies sector are beingincluded in this third sector (the 2008 figures have been adjustedfor comparison purposes). The Technologies sector, which wasintroduced in 2008, includes the activities of Xennia Technology Ltd(78.95% interest) and various innovative technological developmentprojects.The organic decrease in sales in this sector amounted to 15%.Although the sales of TenCate Enbi decreased, the company continuesto generate attractive replacement sales in markets other than thatof printers and copiers. In view of the impaired market situation,the break-even level has been further reduced. The associated costshave a one-off impact on the result for the current financial year.Xennia Technology made good progress and expanded its geographicmarket for industrial applications of inkjet technology. For thefurther development and market introduction of innovative digitalprinting and textile finishing processes, partnerships were enteredinto and, in addition to the existing European subsidy scheme,subsidies were received from both the Province of Overijssel and theRegional Innovation Platform. The aim is to have an initial versionof an industrial production process for finishing ready towards theend of this year for test series of products for TenCate AdvancedTextiles.Statement of the Executive Board'The Executive Board hereby declares that, to the best of theirknowledge, the semi-annual financial statements, which have beenprepared in accordance with lAS 34, "lnterim Financial Reporting",give a true and fair view of the assets, liabilities, financialposition and profit of Royal TenCate and the undertakings included inthe consolidation as a whole, and the semi-annual management reportincludes a fair review of the information required pursuant tosection 5:25d, subsections 8 and 9 of the Dutch Financial MarketsSupervision Act (Wet op het financieel toezicht).'Almelo, Wednesday 26 August 2009Royal Ten CateFor further information:F.R. Spaan, Director of Investor Relations & Corporate DevelopmentTelephone : 0546 544 338Mobile : 0612 96 17 24E-mail : f.spaan(at)tencate.comInternet : www.tencate.comRoyal Ten Cate's press conference on the 2009 half-year figures willtake place on Wednesday 26 August at 10.30 at the Hilton Hotel,Apollolaan 138 in Amsterdam. Prospective attendees can register bye-mail at media(at) Ten CateRoyal Ten Cate (TenCate) is a multinational company which combinestextile technology, chemical processes and material technology in thedevelopment and production of functional materials with distinctivecharacteristics. TenCate's systems and material can be divided intofour areas of application: safety & protection, aerospace,environment & infrastructure and sport & leisure. TenCate occupiesleading positions in safety fabrics, composites for aerospace,antiballistics, geosynthetics and synthetic turf. TenCate is listedon NYSE Euronext. announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Keywords (optional):

Company information / Profile:

PressRelease by


PressContact / Agency:

published by: hugin
print pressrelease  send to a friend  

Date: 08/26/2009 - 08:05
Language: English
News-ID 1003596
Character count: 0
Firma: Koninklijke Ten Cate NV
Ansprechpartner: Feedback to about Pressrelease-id:
Stadt: London


Number of hits: 275


Direct Link to this PressRelease:

We would appreciate a link in your News-, Press- or Partner-Site.

Comments on this PressRelease

All members: 9 438
Register today: 0
Register yesterday: 0
Members online: 0
Guests online: 71

Don't have an account yet? You can create one. As registered user you have some advantages like theme manager, comments configuration and post comments with your name.