2015

23 July 2015

TenCate records 5% organic sales growth with net profit sharply higher at € 19.3 million

  • Organic sales growth 5% in the first half year of 2015; 2% in the second quarter of 2015
  • Total sales growth 15% in the first half of 2015; 11% in the second quarter of 2015
  • Net Profit before exceptional items € 19.3 million (2014 H1: € 10.0 million)
  • Continuing growth in synthetic turf, TenCate Defender® M and aerospace composites
  • Organic sales decrease at TenCate Geosynthetics and TenCate Advanced Armour
  • Margin improvement from high occupancy and higher gross margins in synthetic turf and from growth in high-margin product categories
  • EBITA* € 33.1 million (2014 H1: € 24.3 million)
  • EBITA margin* 5.8% (2014 H1: 4.9%), second quarter 7.7% (2014 Q2: 6.9%)
  • Restructuring charges TenCate Advanced Armor USA € 1.8 million
  • Divestment of TenCate Enbi and Xennia Technology 
  • Net debt € 224.3 million (2014 H1: € 213.4 million)
  • Net debt / EBITDA ratio 2.63 (2014 H1: 2.87)

2015 Q2

2014 Q2

 

Key figures, in Euro millions

2015 H1

2014 H1

 

 

 

 

 

 

303.8

274.3

 

Sales

571.5

497.6

+ 2%

+ 5%

 

Organic sales growth

+ 5%

 0%

 

 

 

EBITDA*

47.8

39.7

23.4

18.8

 

EBITA*

33.1

24.3

7.7%

6.9%

 

EBITA margin*

5.8%

4.9%

 

 

 

Net profit before exceptional items

19.3

10.0

 

 

 

Earnings per share before exceptional items (€)

0.72

0.38

 

 

 

Net result (IFRS)

17.9

10.0

 

 

 

Earnings per share after exceptional items (IFRS) (€)

0.66

0.38

 

 

 

EBITA as % of average net invested capital

8.5%

5.9%

 

 

 

Investments in fixed assets

13.0

12.0

 

 

 

Net interest bearing debt

224.3

213.4

 

 

 

Debt ratio

2.63

2.87

 

 

 

FTE excluding temporary personnel as at 30 June 2015

3,758

4,318

* In this press release, EBITDA, EBITA and EBITA margin are before exceptional items, unless mentioned otherwise

Loek de Vries, president and CEO:
“The second quarter of 2015 marked five consecutive quarters with organic sales growth. It was the third consecutive quarter with a higher EBITA margin for the group.

The earnings recovery is mainly due to the growth of a number of the most high-quality products with which TenCate can combine its innovations with a strong position in growth markets. This applies for example to artificial turf, military protective fabrics and aerospace composites.

The sale of industrial protective fabrics and of geotextiles was affected by the reduced activity in the oil and gas industry. At TenCate Advanced Armour, delivery volumes are still too low, which leads to a continued negative operating result despite the restructuring measures taken.

The divestment of TenCate Enbi and Xennia Technology was completed in the past half year. The current portfolio provides TenCate with a good basis for the coming years.

The intended offer by the consortium led by Gilde Buy Out Partners offers, apart from an attractive premium for current shareholders, sound agreements regarding non-financial aspects. The consortium supports the long-term growth strategy of TenCate.

For the current financial year 2015, TenCate is on track to achieve the previously announced expectations of sales growth.”

Segments

Advanced Textiles & Composites

 

Advanced Textiles & Composites (in Euro millions)

    2015 H1

     2014 H1

 

Sales

254.9

206.9

 

EBITA*

17.5

14.6

 

EBITA margin *

6.9%

7.1%

 

Investments in tangible and intangible assets

7.5

5.6

 

Depreciation

4.3

4.6

 

Amortisation

1.9

3.2

 

Net invested capital at the end of the period

295.5

287.2

 

Fte excluding temporary personnel

1,591

1,601

* EBITA and EBITA margin are before exceptional items, unless mentioned otherwise

In the first half year of 2015, sales of the Advanced Textiles & Composites segment increased organically by 9% to € 254.9 million (2014 H1 € 206.9 million). The EBITA margin decreased slightly to 6.9% (2014 H1 7.1%), EBITA was € 17.5 million.

TenCate Protective Fabrics recorded organic sales growth of 15% in the first six months of 2015. The American sales of TenCate Defender® M remained at a good level for the third consecutive quarter. Sales also increased due to the first delivery of uniforms to the new customer in the Middle East. The developments in the oil and gas industry have negatively affected the sales of industrial protective fabrics (TenCate Tecasafe®).

Notwithstanding the continuing growth of aerospace and automotive composites, the organic sales growth of TenCate Advanced Composites was limited to 3% by the project nature of industrial composites.

Sales of TenCate Advanced Armour decreased by 4% organically in the first half year. The volume of deliveries is still too low. The development and tests of the TenCate ABDS™ active blast countermeasure system are according to plan. In the second quarter, a € 1.8 million exceptional charge was recorded for a restructuring of TenCate Advanced Armor USA.

Geosynthetics & Grass

 

Geosynthetics & Grass (in Euro millions)

2015 H1

2014 H1

 

Sales

299.3

25.2

 

EBITA*

19.7

11.0

 

EBITA margin *

6.6%

4.2%

 

Investments in tangible and intangible assets

5.0

3.7

 

Depreciation

9.7

9.3

 

Amortisation

1.8

1.7

 

Net invested capital at the end of the period

433.8

379.3

 

Fte excluding temporary personnel

2,109

2,054

* EBITA and EBITA margin are before exceptional items, unless mentioned otherwise

Sales of the Geosynthetics & Grass segment grew organically by 4% to € 299.3 million in the first half of 2015. EBITA rose to € 19.7 million at a higher EBITA margin of 6.6% (2014 H1: 4.2%).

Revenues of TenCate Geosynthetics decreased 3% organically in the first half of 2015. In the US, revenues from geotextiles for the oil and gas industry contracted significantly. In Europa and Asia, sales were at more or less the same level as in the first half of 2014. The EBITA margin was lower.

TenCate Grass recorded 12% organic sales growth at higher gross margins and a sharply higher operating profit. This is the result of the market positioning of grass components and systems, which has led to high occupancy.

Other

 

Other and eliminations (in Euro millions)

    2015 H1

2014 H1

 

Sales

17.3

31.5

 

EBITA*

̶  4.1

̶ 1.3

 

Investments in tangible and intangible assets

0.5

2.7

 

Depreciation

0.7

1.5

 

Amortisation

0.3

1.3

 

Fte excluding temporary personnel

58

663

* EBITA is before exceptional items, unless mentioned otherwise

The “Other and eliminations” category contains mainly TenCate Enbi, which was divested at the end of the first quarter, and Xennia Technology, which was divested at the end of the second quarter. Furthermore, this category contains the negative result from internal currency hedges.

Other financial information regarding the first half of 2015

Capital expenditure rose to € 13.0 million (2014 H1 € 12.0 million). The largest investment projects concern capacity extensions in TenCate Grass and at TenCate Advanced Composites.

At the end of June 2015, net debt stood at € 224.3 million. The effects of a higher dollar exchange rate and the usual seasonal pattern in working capital were partly offset by the receipts from the TenCate Enbi and Xennia Technology divestments. The debt ratio was 2.63 at the end of June 2015 (June 2014: 2.87; December 2014: 2.57), comfortably within the bank covenant (3.50).

Agreement on a full public offer for all shares of TenCate by a consortium led by Gilde Buy Out Partners.

On Monday, 20 July 2015, TenCate and Tennessee Acquisition B.V., a consortium of investors led by Gilde Buy Out Partners and also including Parcom Capital and ABN Amro Participaties, jointly announced to have reached a conditional agreement on a full public offer of € 24,60 (cum dividend) in cash per share for all outstanding shares of Koninklijke Ten Cate N.V. The Supervisory Board and the Executive Board of TenCate fully support and unanimously recommend the offer. For further detail, please check the press release that was published on Monday, 20 July 2015.

Declaration of the Executive Board

‘Based on the information available to us the Executive Board hereby states that the interim report, prepared in accordance with IAS 34, Interim Financial Reporting, gives a true and fair view of the assets, the liabilities, the financial position and the profit of Royal Ten Cate and the companies jointly included in the consolidation, and that the interim report provides a true and fair view of the information required under Article 5:25d, subsections 8 and 9 of the Dutch Financial Supervision Act.’

Royal Ten Cate
Almelo, the Netherlands, Thursday, 23 July 2015

      
Download: 150723 Press release TenCate regarding 15H1 including key figures.pdf
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