Koninklijke Ten Cate NV : TenCate records 4% organic revenue growth in 2014
February 20 2015 - 1:31AM
Impairment of € 82 million,
mainly at TenCate Advanced Armour
-
Organic revenue growth of 4%
for the full year 2014; 9% in the second half of 2014
-
Growth in composites, synthetic
turf yarns and industrial protective fabrics
-
Expected increase in defense
revenues failed to materialise as a result of postponed deliveries
of armour orders (vehicle armour)
-
Downward pressure on results
due to a substantial operating loss at TenCate Advanced Armour, to
lower margins at TenCate Geosynthetics and to increased marketing
costs
-
EBITA* € 53.3 million (2013: €
54.4 million); EBITA margin* 5.1% (2013: 5.4%)
-
Net profit before exceptional
items € 24.1 million (2013: € 23.2 million)
-
Net result (IFRS) - € 45.7
million (2013: € 19.0 million) as a result of exceptional items,
impairments at TenCate Advanced Armour and Xennia
Technology
-
Positive cash flow of € 1.9
million (2013: € 42.6 million); increase in working capital as a
result of strong revenue growth in the fourth quarter due in part
to continuing demand for synthetic turf yarns
-
Net debt € 215.5 million (2013:
€ 188.3 million)
-
Net debt / EBITDA ratio 2.57
(2013: 2.27)
-
TenCate expects 2015 organic
growth in revenues similar to that in 2014
-
Dividend proposal unchanged at
€ 0.50 per share (optional stock dividend)
2014 H2 |
2013 H2** |
|
Key figures (in € million) |
2014 |
2013** |
544.0 |
491.5 |
|
Revenues |
1,041.6 |
1,002.4 |
+ 9% |
0% |
|
Organic growth in revenues |
+ 4% |
- 3% |
44.9 |
42.6 |
|
EBITDA* |
84.6 |
89.1 |
29.0 |
25.6 |
|
EBITA* |
53.3 |
54.4 |
5.3% |
5.2% |
|
EBITA-margin* |
5.1% |
5.4% |
14.1 |
10.2 |
|
Net result before exceptional
items |
24.1 |
23.2 |
0.53 |
0.38 |
|
Earnings per share before exceptional
items (EUR) |
0.91 |
0.88 |
|
|
|
Dividend (EUR) |
0.50 |
0.50 |
- 55.7 |
6.0 |
|
Net result (IFRS) |
- 45.7 |
19.0 |
- 2.10 |
0.22 |
|
Earnings per share after exceptional items (IFRS)
(EUR) |
- 1.72 |
0.72 |
|
|
|
EBITA as a percentage of average net invested capital |
7.1% |
7.1% |
|
|
|
Investments in fixed assets |
24.8 |
14.4 |
|
|
|
Net interest-bearing debt |
215.5 |
188.3 |
|
|
|
Net debt / EBITDA |
2.57 |
2.27 |
|
|
|
FTE excluding temporary personnel as of 31 December
2014 |
4,345 |
4,234 |
* EBITDA, EBITA and EBITA margin
have been adjusted in this press release to take account of
exceptional items,
unless specifically stated otherwise
** 2013 numbers have been adjusted for comparison
purposes
Loek de Vries, President and CEO: "TenCate
revenues have developed favourably from the second quarter of 2014
onwards. Fourth quarter revenues increased organically by 15%,
compared to the fourth quarter of 2013. The latter can be
attributed to the demand from the United States for TenCate
Defender(TM) M products, revenue growth in composites and armour
products and sustained demand for synthetic turf yarns. For the
full year 2014 TenCate Grass, with 11%, showed the highest organic
revenue growth after TenCate Advanced Composites, with
16%.
In the second half of the year defense revenues rose as expected,
compared to the first half of 2014. TenCate Advanced Armour,
however, did not keep pace with this trend. Although in 2014 new,
multi-year supply agreements were concluded for a total amount of
more than US$ 100 million, delivery of orders was slow to start.
The timing of deliveries remains uncertain; it is expected that
half of the total contract volume will be delivered after 2015. The
historical figures and revised forecasts for this market group in
particular prompted an impairment charge. This measure will have no
impact on the competitive position of this market group. TenCate
remains well positioned in this market. The development of the
TenCate ABDS(TM) active blast countermeasure
system is proceeding according to planning.
The negative results of TenCate Advanced Armour had an adverse
effect on the profitability of the TenCate group as a whole.
Measures are being taken to sustainably reduce the cost base. The
Advanced Armour group has had to deal with sharp fluctuations in
deliveries, and will increase the flexibility of its costs
significantly. On balance this will considerably reduce the
negative results in 2015.
In the course of 2015 a start will be made with the delivery of
army uniforms based on TenCate Defender(TM) M material within the
multi-year agreement that was signed in October 2014 with a new
customer outside the United States.
The sale of TenCate Enbi was agreed at the beginning of 2015. This
transaction is expected to be closed in the first half of 2015,
thus completing the Fix-It / Exit strategy.
TenCate expects to achieve growth in 2015 that is similar to that
in 2014. This growth results from an increase in sales and
marketing efforts, an improvement in market conditions of the
synthetic turf activities, growth in protective fabrics and an
acceleration of growth of aerospace composites. In recent years,
TenCate has focused strongly on technology development and in the
years ahead we must reap the benefits."
Sectors
Unless stated otherwise, the amounts mentioned in
this press release relate to the result adjusted for exceptional
items. These exceptional items are explained on page
6.
Advanced Textiles & Composites
2014 H2 |
2013 H2 |
|
Advanced Textiles & Composites (in €
million) |
2014 |
2013 |
228.4 |
199.4 |
|
Revenues |
435.3 |
427.8 |
12.6 |
11.9 |
|
EBITA |
27.2 |
26.0 |
5.5% |
6.0% |
|
EBITA margin |
6.2% |
6.1% |
8.1 |
4.9 |
|
Investments in (in-)tangible fixed assets |
13.7 |
7.8 |
4.8 |
5.0 |
|
Depreciation |
9.4 |
10.3 |
3.5 |
2.4 |
|
Amortisation |
6.7 |
6.3 |
269.4 |
284.6 |
|
Net invested capital at year-end |
269.4 |
284.6 |
1,592 |
1,542 |
|
FTE excluding temporary personnel at year-end |
1,592 |
1,542 |
The Advanced Textiles & Composites sector
recorded an organic increase in revenues of 2% to € 435.3 million
in 2014 (2013: -8%, € 427.8 million). EBITA improved to € 27.2
million (2013: € 26.0 million). The EBITA margin amounted to 6.2%
(2013: 6.1%).
This sector's increase in revenues stems in particular from
composites for aerospace and automotive applications in the TenCate
Advanced Composites market group. An increase was also recorded in
the sales of industrial protective fabrics at the TenCate
Protective Fabrics market group. Defense-related revenues recovered
from the second quarter onwards, but for the year 2014 as a whole
revenues in this end market for the Advanced Textiles &
Composites sector were 12% lower than in 2013. In the fourth
quarter the sector's defense-related revenues rose strongly at both
TenCate Protective Fabrics and TenCate Advanced Armour.
TenCate Protective Fabrics recorded unchanged annual revenues, with
growth in the fourth quarter making up for the shortfall in the
first half of the year. The sales of industrial protective fabrics
(TenCate Tecasafe® and TenCate Tecapro®) grew by 17%. In the fourth
quarter, TenCate benefited from strong catch-up demand from the
United States for TenCate Defender(TM) M material for army
uniforms. After a period of intensive marketing outside the United
States, a multi-year agreement was signed in October 2014 for the
supply of protective uniforms for national armed forces based on
TenCate Defender(TM) M. Deliveries of these uniforms will start in
the course of 2015.
The process innovation relating to inkjet technology reached its
marketing phase. In 2014, TenCate Outdoor Fabrics made a start with
digitally-printed sun awning fabrics and tent cloth.
The TenCate Advanced Composites market group recorded organic
revenue growth of 16% in 2014. The increased build rate of the
latest generation of commercial aircraft, with an increasing share
of TenCate composites, is the driver behind this growth. In the
automotive market a major success was recorded with the order for
the exclusive supply of thermoset composite material for the Alfa
Romeo 4C sports car. High revenue growth was also achieved in
composite materials for sporting goods.
TenCate Advanced Armour saw its revenues decline organically by
17%. Although major new supply agreements were entered into in
2014, the deliveries relating to various agreements were slow to
start. Growth was achieved in the law enforcement market of police
forces and security services.
The development of the TenCate ABDS(TM) active blast countermeasure
system is proceeding according to planning in a series of test
phases in collaboration with the U.S. Army Research, Development
and Engineering Command (RDECOM). Under the Cooperative Research
and Development Agreement (CRADA), the U.S. Army Tank Automotive
Research, Development and Engineering Center is in charge of the
second phase of the technology evaluation programme, which is
intended to demonstate that the protection offered is both
effective and robust.
The 2014 profit growth of the Advanced Textiles & Composites
sector was held back considerably the substantial operating loss at
TenCate Advanced Armour.
Geosynthetics & Grass
2014 H2 |
2013 H2 |
|
Geosynthetics & Grass (in €
million) |
2014 |
2013 |
279.5 |
261.3 |
|
Revenues |
538.7 |
508.2 |
12.5 |
12.3 |
|
EBITA |
23.5 |
27.3 |
4.5% |
4.7% |
|
EBITA margin |
4.4% |
5.4% |
3.7 |
3.4 |
|
Investments in (in-)tangible fixed assets |
7.4 |
4.9 |
9.5 |
10.6 |
|
Depreciation |
18.8 |
21.5 |
1.7 |
1.8 |
|
Amortisation |
3.4 |
4.2 |
400.0 |
362.1 |
|
Net invested capital at year-end |
400.0 |
362.1 |
2,079 |
2,012 |
|
FTE excl. temporary personnel at year-end |
2,079 |
2,012 |
The revenues of the Geosynthetics & Grass
sector grew organically by 7% to € 538.7 million in 2014
(2013: € 508.2 million). EBITA declined to € 23.5 million (2013: €
27.3 million). The EBITA margin amounted to 4.4% (2013:
5.4%).
In the reporting year, TenCate Geosynthetics achieved 4% organic
revenue growth, despite the continuing pressure on government
budgets that limited the market for geotextiles for infrastructure.
TenCate Geosynthetics recorded growth in the United States. Midway
through the year, revenues in Asia recovered cautiously.
TenCate Grass recorded organic revenue growth of 11% in 2014. This
growth was driven by a good revenue trend from both synthetic turf
yarns and synthetic turf systems for sports and landscaping. In the
United States, TenCate Grass successfully launched the GreenFields®
brand amid growing revenues. European demand for sports pitches
remained stable. The replacement market continued to show healthy
growth, particularly in the United States and Europe.
The profitability of the Geosynthetics & Grass sector was
depressed. At TenCate Geosynthetics the result declined due to
restraint in the market for infrastructure projects. The result of
TenCate Grass developed favourably, with increased marketing
costs.
Other
2014 H2 |
2013 H2 |
|
Other (in € million) |
2014 |
2013 |
36.1 |
30.8 |
|
Revenues |
67.6 |
66.4 |
3.9 |
1.4 |
|
EBITA |
2.6 |
1.1 |
1.0 |
1.3 |
|
Investments in (in-)tangible fixed assets |
3.7 |
1.7 |
1.6 |
1.4 |
|
Depreciation |
3.1 |
2.9 |
1.3 |
1.2 |
|
Amortisation |
2.6 |
2.5 |
674 |
680 |
|
FTE excluding temporary personnel at year-end |
674 |
680 |
In the sector Other (Xennia Technology, TenCate
Enbi and Holding & Services) revenues rose in 2014 by 2% to €
67.6 million (2013: -3%, € 66.4 million). EBITA increased to € 2.6
million (2013: € 1.1 million).
The revenues of TenCate Enbi grew in 2014, compared to 2013. In
January 2015 an agreement was reached with American private equity
firm, Platinum Equity on the sale of TenCate Enbi. This transaction
is expected to be closed in the first half of 2015.
Within Xennia Technology the composition of revenues changed
considerably in 2014, as a result of the strategic focus on inks,
in particular for the textile industry. On balance, revenues
remained unchanged.
Impairment and other exceptional
items
On balance the amount of exceptional items before tax was -€ 77.1
million (2013: - € 5.9 million).
The largest exceptional item relates to an impairment charge of in
total € 82.2 million, which primarily concerns TenCate Advanced
Armour and Xennia Technology. The impairment is the result of
revised forecasts. These are in part based on historical
results.
The exceptional items also include a gain of € 7.9 million as a
result of changes in the Dutch pension scheme.
Other financial information
In 2014, investments were significantly higher than in the previous
year, but remained below the level of depreciation: investments in
fixed assets amounted to € 24.8 million (2013: € 14.4 million),
depreciation was € 31.3 million (2013: € 34.7
million).
The increase of revenues, in particular in the fourth quarter, led
to an organic increase in the net working capital of € 32.8 million
by the end of December 2014 (2013: € 8.3 million).
On balance, TenCate generated a positive cash flow from operating
and investing activities of € 1.9 million (2013: € 42.6 million).
Net debt amounted to € 215.5 million at the year end (2013: € 188.3
million). The € 27.2 million rise is largely attributable to the
changed exchange rate between US dollar and euro.
The ratio net debt / EBITDA was 2.57 (2013: 2.27). Here too the
dollar exchange rate had an upward effect.
At the end of 2014, the number of employees at TenCate was 4,345
FTEs (2013: 4,234 FTEs). The increase occurred mainly at the
activities for composites and synthetic turf.
Dividend proposal
For 2014, TenCate will propose to its shareholders a distribution
equal to the 2013 dividend of € 0.50 per € 2.50 par value
share. The dividend will be payable at the shareholders' discretion
in cash or in shares.
Outlook for 2015
TenCate expects for 2015 organic revenue growth similar to that in
2014. The highest growth is expected at TenCate Advanced
Composites, at TenCate Grass and at TenCate Protective
Fabrics.
Revenue growth will lead to an improvement in profitability as a
result of the revenue mix and of higher efficiency. Restructuring
at TenCate Advanced Armour will reduce costs.
Investments are expected to be around the level of depreciation in
2015.
Financial objectives
Within the published financial objectives, priority will be given
to earnings growth. For the medium term, TenCate aims for an
average annual EBITA-growth of at least 10% while maintaining its
target for the return (EBITA) on net invested capital of at least
15%.
Royal Ten Cate
Almelo, the Netherlands, Friday, 20 February 2015
For further information:
TenCate corporate
Gert Steens, manager investor relations
Tel.
: +31 (0)546 544
977
Mobile
: +31 (0)621 597 411
E-mail
: ir@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. TenCate products are sold throughout the
world.
Systems and materials from TenCate come under four areas of
application: safety and protection; aviation and aerospace;
infrastructure and the environment; sport and recreation. TenCate
occupies leading positions in protective fabrics, composites for
aviation and aerospace, antiballistics, geosynthetics and synthetic
turf. TenCate is listed on Euronext Amsterdam (AMX).
Press release as PDF
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Source: Koninklijke Ten Cate NV via Globenewswire
HUG#1896045
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