Leading technical textiles producer Royal TenCate has recorded a net profit increase of 92% for 2010. The Dutch company reported the following results yesterday:

Highlights of 2010

• Sales in 2010: €984.5 million (2009: €842.1 million; 17% of which +10% autonomous).
• EBITA in 2010: € 85.0 million (2009: €41.5 million; +109% autonomous).
• EBITA margin in 2010: 8.6% (2009: 4.9%).
• -          Net profit in 2010: € 46.0 million (2009: € 23.9 million).
• -          EBITA Advanced Textiles & Composites sector up 38% to € 43.8 million.
• EBITA Geosynthetics & Grass sector increases by 87% to € 31.4 million.
• Considerable recovery in the result of synthetic turf activities.
• Strong growth in sales of TenCate Defender(TM) M products; sales in fourth quarter approx. € 60 million.
• Dividend proposal: € 0.75 per share, in cash or as a stock dividend, at shareholder's discretion (2009: € 0.60 per share, stock dividend option).

“In 2010 TenCate achieved an autonomous growth in sales of 10%, in an uncertain economic climate. There is a positive operational trend, partly in view of the quality of the composition of the profit,” said Loek de Vries, Chairman of the Executive Board and CEO.

“The TenCate companies in the Netherlands also made a positive contribution as a result of a successful restructuring process. Production costs were reduced and a greater focus was brought to bear on the composition of the product portfolio.”

“The results for 2010 form a good basis for the continuation of this growth”.

General performance in the second half of 2010

Sales in the second half of 2010 increased by 16% on an autonomous basis (+8% currency effect) to € 529.9 million. Orders for TenCate Defender M and armour composites (antiballistics) made a strong contribution here.

 The Advanced Textiles & Composites sector achieved an autonomous growth in sales of 28%, compared to the second half of 2009.

The operating result before the amortization of intangible fixed assets (EBITA) amounted to € 46.8 million and rose by 127% (autonomous 132%) as a result of this positive development, which was also considerable (second half 2009: € 20.6 million). The EBITA margin in the second half of 2010 was 8.8% (second half of 2009: 5.0%).

 The net result for the second half of 2010 amounted to € 26.4 million (2009: € 8.7 million).

 Annual figures for 2010

Sales in 2010 as a whole amounted to €985 million (2009: €842 million). On an autonomous basis the increase in sales amounted to 10% (currency effect +4%; effect of acquisitions/ divestments +3%).

 The dominant theme of the year 2010 was recovery. TenCate Protective Fabrics and the TenCate Grass group showed the greatest increase in sales and result.

On the back of the reorganizations implemented in 2009, TenCate Enbi produced an excellent result.

The buy & build strategy was continued in 2010, after priority had been given to cash management and balance sheet management in 2009. In 2010 AML UK (armour composites) was acquired, which has brought about strategic strengthening of the European armour activities.

 EBITA rose in 2010 to €85.0 million (autonomous +109%; currency effect +14%; acquisitions / divestments -18%).

 The EBITA margin is 8.6% (2009: 4.9%). The EBITA (margin) was affected by tight conditions and price increases on the raw materials market. These increases in the price of raw materials were passed on to the market with a time lag.

 The EBITA margin at sector level came under pressure and decreased by 1% as a result of an internal reallocation of costs, which are treated as gains at holding level. The total impact of this amounts to approx. €8 million.

 Net profit in 2010 was up by 92% to €46.0 million (2009: €23.9 million). Net earnings per share amounted to €1.84 (2009: €0.97).

Current performance and outlook

The order intake is developing favourably on the whole. Public sector bodies and related groups of customers represent a considerable share of sales. No significant negative effect is expected from reduced public expenditure for the group as a whole because TenCate materials are underpinned by global trends, which are of importance for these market groups.

 A number of promising developments are taking place in the markets in which TenCate operates.

 Activities in the aerospace industry are increasing and, after some initial delays, new aircraft programmes have now reached the production stage. Another promising development is the Active Blast Defence System (ABDS). This is a patented concept intended to better protect military vehicles against roadside bombs.

 In the synthetic turf market TenCate has introduced a development focused on increasing integration and collaboration within the value chain, with particular attention to sustainable synthetic turf systems. The priority here lies in margin growth (upstream in combination with downstream activities).

 In summary, the developments below form the main pillars for further growth:

• Continued strong performance of TenCate Defender(TM) M and expansion of applications (for example, riot police) and new geographic markets;
• Growth in market share of the industrial market for protective fabrics;
• Recovery in the aviation industry;
• The marketing of earlier technological developments (such as new synthetic turf systems and expansion of applications for composites);
• Good starting position in armour markets (EU and US);
• Growth in Asian and South American markets (geotextiles, protective fabrics);
• Increased profit margin of geosynthetics activities.

 In view of the above developments, barring unforeseen circumstances, further growth in sales and net profit is expected.