Summary of first half of 2014
-
Revenues for the
first half of 2014 remain unchanged in organic terms; 5% organic
growth in revenues in the second quarter.
-
Substantial
increase in revenues from composites and synthetic turf offsets
virtually the entire decrease in defence-related
revenues.
-
EBITA for the
first half declines in organic terms by 13%; EBITA in the second
quarter increases by 22% in organic terms.
-
Earnings per
share €0.38 (H1 2013: €0.50).
-
Net debt / EBITDA
ratio virtually unchanged at 2.87.
-
TenCate maintains
expectation for the year as a whole; increase in defence revenues
in second half of the year.
Key figures for first half of 2014
x 1 € million |
H1 2013 |
H1 2014 |
Change |
Organic |
Revenues |
510.9 |
497.6 |
-3% |
0% |
EBITA |
28.8 |
24.3 |
-16% |
-13% |
EBITA margin |
5.6% |
4.9% |
|
|
EBIT |
21.2 |
18.1 |
-15% |
-11% |
Net profit |
13.0 |
10.0 |
-23% |
-22% |
Net earnings per share (€) |
0.50 |
0.38 |
-24% |
|
Other information |
|
|
|
|
Investments in tangible and intangible fixed assets |
4.8 |
12.0 |
|
|
Return on average net capital invested |
6.0% |
5.9% |
|
|
Net interest-bearing debt |
237.0 |
213.4 |
|
|
Debt ratio |
2.80 |
2.87 |
|
|
FTE excluding temporary personnel (end of half year) |
4,245 |
4,318 |
|
|
Outlook
For the year as a whole TenCate maintains its
previously announced growth projection in respect of the trend in
revenues for the company, barring unforeseen circumstances and
currency effects.
The defence-related revenues within TenCate
Protective Fabrics and TenCate Advanced Armour show, on the basis
of the current order position, 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(TM) M and the order positions
for armour composites.
Loek de Vries, Chairman and
CEO of Royal Ten Cate: '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.
The policy-related strengthening of marketing and
sales activities within the company and the introduction of
composites into new markets showed positive results. As a result of
strong growth in the composites and synthetic turf activities, the
decline in revenues in defence markets was largely offset.
The defence-related activities represented 4% of
the revenues in the first half of 2014 (first half of 2013: 9%).
Although defence budgets have been depressed for a prolonged
period, TenCate is investing in innovations for this market. This
has strengthened the market position in particular of TenCate
Advanced Armour. TenCate expects revenues from defence markets to
increase in the second half of the year.
The previously announced revenue growth projection
for the company remains unchanged for the year as a whole.'
Performance by
sector
Advanced
Textiles & Composites sector
The
revenues of the Advanced Textiles & Composites sector declined
in the first half of 2014 by 9% to €206.9 million (organic -7%,
currency effect -2%). EBITA rose by 4% to €14.6 million (organic
+7%, currency effect -3%).
x 1 € million |
H1 2013 |
H1 2014 |
Change |
Organic |
Revenues |
228.4 |
206.9 |
-9% |
-7% |
EBITA |
14.1 |
14.6 |
4% |
7% |
EBITA margin |
6.2% |
7.1% |
|
|
Investments in tangible and intangible fixed assets |
2.9 |
5.6 |
|
|
Depreciation |
5.3 |
4.6 |
|
|
Amortization |
3.9 |
3.2 |
|
|
Net capital invested (end of half year) |
297.8 |
287.2 |
|
|
FTE excluding temporary personnel (end of half year) |
1,518 |
1,601 |
|
|
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(TM) M. The revenues from
protective fabrics for the industrial market (TenCate Tecasafe®
Plus) rose by in excess of 10%. With TenCate Tecasafe® Plus,
TenCate satisfies the desire for higher levels of employee
protection.
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 utilization 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.
In other markets too there is increased interest in composite
materials (industrial composites).
The TenCate Advanced Armour market group had to
contend with a further decline in revenues. This market group,
however, remains 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 will occur in the second half of 2014. Recently several
long-term orders were announced, work on which is expected to start
later this year.
The commercial launch of the TenCate ABDS(TM)
active blast countermeasure system is expected 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.
Geosynthetics & Grass sector
The revenues of the Geosynthetics & Grass
sector rose by 5% to €259.2 million (organic +8%, currency effect
-3%) as a result of strong recovery in the second quarter. EBITA
declined by 27% to €11.0 million (organic -24%, currency
effect -3%). The decline in EBITA can be almost entirely
attributed to TenCate Geosynthetics.
x 1 € million |
H1 2013 |
H1 2014 |
Change |
Organic |
Revenues |
246.9 |
259.2 |
5% |
8% |
EBITA |
15.0 |
11.0 |
-27% |
-24% |
EBITA margin |
6.1% |
4.2% |
|
|
Investments in tangible and intangible fixed assets |
1.5 |
3.7 |
|
|
Depreciation |
10.9 |
9.3 |
|
|
Amortization |
2.4 |
1.7 |
|
|
Net capital invested (end of half year) |
389.0 |
379.3 |
|
|
FTE excluding temporary personnel (end of half year) |
2,101 |
2,054 |
|
|
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 recovery in EMEA and
Asia-Pacific lagged behind as a result of lower government budgets
and local political uncertainty in major Asian markets.
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. Close cooperation with partners in the market and
other stakeholders, such as national and international sports
federations, is of importance here. The introduction of the
GreenFields brand into the United States has led to acceleration in
growth and a strengthening of market positioning. The growth was in
part driven by a recovery in the global synthetic turf market and
the rising demand for high-grade fibres and sports systems, such as
the GreenFields® TX hockey system, which was introduced earlier.
This system is enjoying international interest as a result of its
exposure to a large number of national hockey federations during
the recent World Cup. There is also increased interest in synthetic
turf in Dutch professional football, which is also having a
positive international effect. The number of orders for the second
half of the year for high-grade synthetic turf systems has
therefore increased sharply.
Other
Activities sector
The revenues of
the other activities relate to TenCate Enbi and Xennia Technology.
The revenues and profitability of TenCate Enbi were temporarily
depressed as a result of start-up costs for new contracts. The
outlook for TenCate Enbi, however, remains favourable. Profit
recovery of Xennia Technology continued in the first half of the
year. The focus on ink sales had a positive effect on the sales
mix. In technical textile markets in particular there was strong
revenue growth. Inks from Xennia Technology offer demonstrable
quality advantages to the end-user.
x 1 € million |
H1 2013 |
H1 2014 |
Change |
Organic |
Revenues |
35.6 |
31.5 |
-12% |
-9% |
EBITA |
-0.3 |
-1.3 |
|
|
Investments in tangible and intangible fixed assets |
0.4 |
2.7 |
|
|
Depreciation |
1.5 |
1.5 |
|
|
Amortization |
1.3 |
1.3 |
|
|
FTE excluding temporary personnel (end of half year) |
626 |
663 |
|
|
Other financial information
for the first half of 2014
The level of
investment by TenCate rose to €12.0 million (€4.8 million in the
comparable period last year). The main investment projects were the
expansion of capacity for the 3D matrix-woven synthetic turf system
GreenFields® MX, the development of the TenCate ABDS(TM) active
blast countermeasure system and digital printing and
finishing.
The net interest-bearing debt amounted to €213 million at the end
of June 2014, which represents a decline of €24 million compared to
June 2013. Compared to the end of 2013 the net interest-bearing
debt rose as a result of the seasonal pattern in the Geosynthetics
& Grass sector and increased order positions. The debt ratio at
the end of June amounted to 2.87 (June 2013: 2.80); covenant
3.50.
The number of FTEs rose by 73 to 4,318 at the end of June,
principally as a result of the strong growth of the TenCate
Advanced Composites market group.
Board statement
'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 24 July 2014
For further
information:
On Thursday 24 July 2014 the conference call in
English by the Executive Board with regard to the 2014 interim
figures will be held for analysts and investors at 9:00 CET. The
dial-in number for this call is +31 (0) 10 713 72 95.
For the media, the Dutch-language press conference
by the Executive Board will be held in the Hilton Hotel Amsterdam
at 10:30 CET. At 14:00 CET the Dutch-language analysts' meeting
will be held at the same location.
TenCate
(corporate)
Pieter Zwinkels, investor relations manager
Tel. +31 (0)546 544
977
Mobile +31 (0)6 1088
6338
e-mail
p.zwinkels@tencate.com
Internet
www.tencate.com
Royal Ten Cate (TenCate) is a
multinational company that combines textile technology, with
chemical processes and material technology in the development and
production of functional materials with distinctive characteristics
with the mission of 'Protecting People'. Systems and materials from
TenCate come under four areas of application: personal protection
and defence; mobility; infrastructure and the environment; sport
and recreation. TenCate occupies leading positions in protective
fabrics, composites for aerospace, antiballistics, geosynthetics
and synthetic turf. TenCate is listed on NYSE Euronext Amsterdam
and included in the AMX index.
Key figures
Press release as PDF
Explanatory notes
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Koninklijke Ten Cate NV via Globenewswire
HUG#1836390
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