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TenCate annual results 2012
1. CORPORATE
Annual results TenCate 2012
Outlook 2013
Ir L. de Vries, President and CEO Royal Ten Cate
Amsterdam, Friday 1 March 2013
2. CORPORATE
1. Profile, trends and market themes
2. Core activities and market drivers
3. Organisation
4. Financial highlights and main developments
2012
5. Developments in 2nd half year 2012
6. Development revenu and EBITA 2012 per
quarter
7. Personnel costs
8. Further explanation per sector
9. Actions and outlook 2012
10.Market outlook
Annual results TenCate 2012 2
Agenda
Presentation annual results TenCate 2012
3. CORPORATE
Two mega trends: Safety & Sustainability
Annual results TenCate 2012 3
Profile trends and market themes
4. CORPORATE
• Protective fabrics
• Army and special (police) forces
• Industry and emergency response
• Outdoor
• Aerospace and space composites
• Commercial aircraft, military aircraft, satellites
• Radomes
• Armour composites
• Vehicles, airplanes
• Personal protection
• Industrial composites
• Automotive, energy etc.
• Parts & Components
• Geosynthetics
• Infrastructure, agribusiness
• Environmental and water management
• Synthetic turf
• Sports and landscaping
Annual results TenCate 2012 4
Core activities
Protecting people
5. CORPORATE
Market drivers
• Safety and protection
• Carbon footprint
• Infrastructural developments
• Water management
• Sustainability
• Corporate social responsibility
TenCate operates on growth markets
Annual results TenCate 2012 5
• Modernisation army (safety, weight reduction,
mobility)
• New specifications materials
• Modern mobiliy concepts
• Dewatering and detection systems
• Synthetic turf / water retention and filtration
systems
• Process innovations
• Multi-risk solutions in personal safety
DEVELOPMENTS SOLUTIONS
11. CORPORATE
EBITA development in perspective
11
0
20
40
60
80
100
120
2006 2007 2008 2009 2010 2011 2012*
EBITA
* Before non-recurring items
Annual results TenCate 2012
12. CORPORATE
Geografical split in revenu
By destination
12
5%
32%
48%
15%
2011
6%
33%
45%
16%
2012
Netherlands
Rest of Europe
Americas+
Canada
Asia
Annual results TenCate 2012
13. CORPORATE
• Decrease in revenu 8% to € 1,049 million (organic -15%)
• EBITA normalised for once-only effects (€ 8 million): € 60 million
• EBITA decreases with 49% to € 52 million
• Net profit € 22.3 million (-62%)
• Organic -63%
• Normalised net profit 2012: € 27.6 million
• Free cash flow +€ 68 million (2011: - € 9 million)
• Debt bearing interest € 230 million (2011: -€ 9 million)
• Debt ratio improved from 2,74 mid 2012 to 2.55 end 2012 (2011: 2.12)
• Number of fte’s reduced by 350 since May 2012
• Sector Advanced Textiles & Composites: decrease in revenu and result due to shrinkage
American defense market
• Profitable development TenCate Advanced Composites due to growth in aerospace composites
and new activities (automotive)
• Sector Geosynthetics & Grass: EBITA increases +20% (€ 5 million) at almost constant revenu
• Government expenditures South Europe put pressure on volumes synthetic turf market
• Dividend proposal: € 0.50 (2011: € 0.95) / dividend by choice
• Pay-out 58%
Highlights 2012
13Annual results TenCate 2012
14. CORPORATE
• Write-off supplies (TenCate Protective Fabrics): -€ 3 million
• Provision joint venture Thailand (TenCate Protective Fabrics): -€ 3 million
• Adjustments at Xennia Technology: -€ 2.7 million
• Reorganisation costs: -€ 2.6 million
• Adjustment pension regulations: +€ 3 million
• On balance an effect on the operating result of approx. € 8 million
• EBITA before non-recurring items: € 60 million
Non-recurring items (EBITA level)
14Annual results TenCate 2012
15. CORPORATE
Other financial information
• Investments: € 16.6 million (2011: € 25.7 million)
• Investments in TenCate ABDS™ active blast countermeasure system € 4 million
• > 50% of investments related to innovations
• Net profit bearing debt end 2012: € 230 million (2011: € 289 million)
• Decrease debt position due to improved working capital (€ 40 million)
• Debt ratio end 2012 (debt / EBITDA ratio): 2.55 (2011: 2.12)
• Tax burden: 34% (2011: 24%, normalised 2012: 28%)
15Annual results TenCate 2012
19. CORPORATE
Course of events and indicative revenu split
• Revenu in 2012 decreases in particular because of less US defense orders
(TenCate Defender™ M and Advanced Armour)
• Defense revenu US (TenCate Defender™ M and armour revenu) decreases with
approx. US$ 130 million
• Revenu in composites keeps growing
• Increase in revenu of space / aerospace composites
• Acquisition PMC Baycomp and new applications for a.o. automotive and olie & gas sector
Sector Advanced Textiles & Composites
19
Annual results TenCate 2012
Indicative revenu split 2011
Indicative revenu split 2012
Protective Fabrics
Armour Composites
Space / Aerospace
Composites
21. CORPORATE
• Strong growth revenu TenCate Defender™ M outside US
• In the US TenCate Defender™ M succesfully has been
brought into other applications
• Increase of revenu TenCate Tecasafe™ Plus (industrial
end-users) continued
• Reticent firefighter market US
• Growth outside US; important reference projects have been realised
TenCate Protective Fabrics
21
Main developments per market group
Annual results TenCate 2012
Indicative revenu split US
23. CORPORATE
• Growth aerospace composites in US
• Temporary slow-down in revenu Airbus A350 (Europe)
• Positive developments in aerospace armour Europe
• Armour market US reluctant
• Development composites materials and processes for
automotive
• Alliances with 3M and BASF
• Strong qualifications
• Acquisition PMC Baycomp: high speed UD tape production
• Acquisition (January 2013) Amber Composites
TenCate Advanced Composites and TenCate Advanced Armour
23
Main developments per market group
Annual results TenCate 2012
24. CORPORATE
Revenu development and indicative revenu split composites
24
0
50
100
150
200
2010 2011 2012
Index revenu development
TenCate Advanced Composites
• Relative increase in revenu structural
composites because of strong growth and
organical decrease armour revenu
2012
Armour
composites
Structural
composites
2011
Armour
composites
Structural
composites
Annual results TenCate 2012
26. CORPORATE
Course of events and indicative revenu split
• Revenu development of sector Geosynthetics & Grass determined by:
• Reluctant geosynthetics market in the US in 2nd half of year (governement budgets)
• Shrinkage synthetic turf market in South Europe
• Results developed positively (EBITA +20%) due to tight margin and cost
management
Sector Geosynthetics & Grass
26
Indicative revenu split 2011
Indicative revenu split 2012
Geosynthetics
Grass Upstream
Grass Downstream
2012
2011
Annual results TenCate 2012
28. CORPORATE
• Strong performance entire Geosynthetics group in the first
half of the year
• Increase in revenu in Asia
TenCate Geosynthetics
28
Main developments per market group
Annual results TenCate 2012
2012
Geosynthetics
Asia
Geosynthetics
Americas
Geosynthetics
Europe
2011
30. CORPORATE
• Synthetic turf market weak in South Europe
• Market share in end market grew through business
partners
• Revenu growth downstream activiteiten
• Strong qualitative positioning woven system solutions
• Technical performance further improved
• Sustainable / fully recyclable
• Start hybrid systems (Xtragrass)
TenCate Grass
30
Main developments per market group
Annual results TenCate 2012
34. CORPORATE
Action plans
• Enlarging importance of marketing
• Focus on the value proposition in key markets
• Strengthening organisation
• Focus on successfull market niches with proven products
• Acceleration of growth
• Less fragmentation in product portfolio
• Partnerships
• Further profit recovery Grass group
• Further strengthening in end markets
• Ongoing development weaving technology, market focus
• System development
Outlook 2013
34Annual results TenCate 2012
35. CORPORATE
Action plans (2)
• Focus remains on sustainable cost savings
• Cost savings maintain strategic priority
• No important recovery of (government related) markets to be expected
• Further market development in emerging geographical markets (BRIC
countries)
• Further strengthening revenu growth in composite materials
• Integration acquired companies
• Market development in tooling market, automotive sector and applications in the oil
and gas extraction
• Start inkjet technology production at TenCate Protective Fabrics
Outlook 2013
35Annual results TenCate 2012
36. CORPORATE
Market expectations based on TenCate business monitor
Market group 2013 Explanation market expectations
TenCate Protective Fabrics
Defense
North America + / -
EMEA + / -
Asia +
Decrease in revenu US for TenCate Defender™ portfolio is expected
to remain limited (ongoing decrease number of US soldiers in
Afghanistan); niew projects (US) and growth revenu in defense
markets outside US increasingly offer compensation
TenCate Protective Fabrics
Industrial
North America + / -
EMEA + / -
Asia +
US stable; no recovery expected on traditional EU markets; increasing
revenu share from oil and gas industry.
Growth in Asia continues (TenCate Tecasafe™ Plus portfolio)
TenCate Protective Fabrics
Emergency response
North America + / -
EMEA +
Asia + / -
Emergency response in the US stable; growth revenu TenCate
Defender™ M for police / safety tasks
Appealing reference projects in EU firefighter market with a further
increasing market share
TenCate Advanced Composites
Aerospace / Space
North America ++
EMEA +
Ongoing growth aerospace composites; Airbus revenu increases
Growing contribution of non-aerospace related revenu
TenCate Advanced Armour
Armour composites
North America + / -
EMEA + / -
Market maintains a lasting shortage of larger projects
Possible revenu TenCate ABDS™ active blast countermeasure
system not included in business monitor
TenCate Geosynthetics N Am / S Am +
EMEA + / -
Asia +
Amerikaanse market recovers in the course of the year. More focus on
TenCate Geotube® systems (partnerships)
Asian and South American market offer growth potency
Europe stable
TenCate Grass North America +
EMEA -
Asia + / -
No noticeable improvement of market conditions expected
Increasing revenu share system products
Outlook 2013
36Annual results TenCate 2012
37. CORPORATE
Outlook 2013
• Limited / no organic signals for growth in government related markets
• Political and budgettary effect ‘fiscal cliff’ offers uncertainty regarding revenu development in US
• EU governments too remain reticent regarding government spendings
• Market themes TenCate offer reason for optimism
• Interest for coastal protection (after Super Storm Sandy)
• Increasing attention for environmental problems Asia
• Sustainability, safety and protection high on political agenda
• Focus on development of industrial markets (not bound to government budgets)
• Accelerate market development through partnerships
• Broadening of fields of application expected
• More than average growth is expected for TenCate Advanced Composites
• Airbus revenu increases
• Utilize market challenges in China (commercial aerospace)
• Growth outside aerospace sector, partly through contributions of acquired companies (PMC
Baycomp and Amber Composites)
TenCate group
37Annual results TenCate 2012