TenCate has reported a 5% organic growth in revenues for the second quarter of fiscal 2014, with no development with regards to the first half of the year. EBITA for the first half declines in organic terms by 13%, yet increases in the second quarter by 22%.

Loek de Vries, Chairman and CEO of Royal Ten Cate, commented: “After a weak first quarter, an improvement in revenues and result occurred in the second quarter. Revenues and EBITA increased in organic terms by 5% and 22% respectively in the second quarter.”

Outlook

For the year as a whole TenCate maintains its previously announced growth projection in respect of the trend in revenues for the company.

The defence related revenues within TenCate Protective Fabrics and TenCate Advanced Armour show a more favourable picture for the second half of the year compared to the first half. This positive sentiment can be ascribed to recent orders for TenCate Defender M and the order positions for armour composites.

Although defence budgets have been depressed for a prolonged period, TenCate is investing in innovations for this market. TenCate expects revenues from defence markets to increase in the second half of the year.

Advanced Textiles and Composites

The revenues of this sector declined in the first half of 2014 by 9% to EUR 206.9 million. EBITA rose by 4% to EUR 14.6 million. The revenues of TenCate Protective Fabrics declined in the first half as a result of a low level of demand from the US Army for TenCate Defender M. The revenues from protective fabrics for the industrial market (TenCate Tecasafe Plus) rose by 10%.

TenCate Advanced Composites recorded an organic revenue growth of 24% in the first half of 2014. Profitability also increased as a result of a higher capacity utilisation rate. This market group benefited from an increase in demand from the aerospace industry.

Future growth is related to the latest generation of aircraft for which TenCate materials have been certified. The use of composite materials for full-scale production in the automotive industry is still at the developmental stage. Current revenues in automotive composites are, however, developing positively.

Increased interest

The TenCate Advanced Armour market group had to contend with a further decline in revenues. This market group, however, is said to remain optimistic about the outlook for TenCate in this market, partly in view of the company's engineering capacities.

The expected recovery in demand from the armour market reported earlier this year is expected to occur in the second half of 2014. Recently several long-term orders were announced, with work expected to start later this year.

The commercial launch of the TenCate ABDS active blast countermeasure system is set to take place in 2017, when major vehicle programmes are planned. The system passed a number of important tests in the first half of the year. The success of this system will further strengthen the market position of TenCate Advanced Armour, the group reports.

Geosynthetics and Grass

The revenues of the Geosynthetics and Grass sector rose by 5% to EUR 259.2 million as a result of strong recovery in the second quarter. EBITA declined by 27% to EUR 11.0 million. The decline in EBITA can be almost entirely attributed to TenCate Geosynthetics.

The revenues of TenCate Geosynthetics rose in the first half of 2014 by 6% in organic terms. After a slow start to the year revenues picked up in the second quarter, mainly due to recovery in the United States.

The TenCate Grass market group showed an increase in revenues of more than 10% in organic terms. The focus of TenCate is on the creation of new quality standards in respect of synthetic turf systems. The introduction of the GreenFields brand into the United States has led to acceleration in growth and a strengthening of market positioning.

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