in millions of euros unless stated otherwise
Revenues 538.4 448.4 397.3 481.0 350.3
Operating result before amortisation (EBITA) 70.3 43.8 31.7 61.5 40.2
EBITA margin (%) 13.1 9.8 8.0 12.8 11.5
Operating result (EBIT) 64.7 38.6 27.0 52.9 38.7
Investments 8.3 4.5 4.2 11.7 17.0
Depreciation and amortisation 15.3 15.2 14.2 17.6 10.8
Net capital employed 314.3 281.7 234.0 286.4 197.6
Staff years at year-end 1,582 1,519 1,340 1,651 1,238
EBITA as percentage of average net capital employed 23.6 16.7 12.0 22.9 22.6
ACTIVITIES
The Advanced Textiles & Composites sector consists of the following market groups
◾ TenCate Protective Fabrics and TenCate Outdoor Fabrics
Safety fabrics for a range of professional groups, as well as protective fabrics for outdoor applications.
◾ TenCate Space & Aerospace Composites TenCate Industrial Composites
TenCate Advanced Armour
Composites including lightweight materials for aerospace and industrial applications; antiballistic materials for personal protection and vehicle armour.
REVENUES AND RESULTS
The Advanced Textiles & Composites sector recorded a 20% increase in revenues to € 538.4 million in 2011 (2010: € 448.4 million).
The increase in revenues resulted mainly from the strong developments in the TenCate Protective Fabrics market group and the TenCate Space
& Aerospace Composites market group.
ADVANCED TEXTILES & COMPOSITES
End-user marketing based on value proposition (cost of ownership) Brand management Risk awareness / safe society Partnerships in emerging markets
Inkjet technology / sustainable factory of the future
Smart textiles
Effective use of internal knowledge (social innovation)
Patents
Worldwide market position, with local product adaptations to local specifications Fabrics based on fibre blends and coated /
finished fabrics (product champions:
distinctive in cost and quality-performance ratio)
Co-makership, products tailored to specific needs
Internal production combined with outsourcing delivers flexibility Economies of scale Process innovation Cost control
BUSINESS MODEL OF THE PROTECTIVE FABRICS MARKET GROUP
END-USER MARKETING INNOVATION
PRODUCT DIFFERENTIATION COST LEADERSHIP
Access to market participants and partner-ships with OEM relationpartner-ships in market phase of the TenCate ABDS™ active blast countermeasure system
Independence of fibre suppliers, solution-focused approach
Reputation and qualifications of renowned Market participants
TenCate ABDS™ active blast counter-measure system
(Open) innovation through partnerships (TAPAS, TPRC, AMRC)
Qualifications for future programmes Process innovations for processing of
composites
Development of new application areas, particularly for thermoplastic composites Developments in unidirectional (UD) tape
technology
Development of the value chain particularly in automotive applications for thermoplastic composites
Increased efficiency in production Economies of scale
Outsourcing and partnerships Development of low-cost solutions
(industrial markets)
BUSINESS MODEL OF THE SPACE & AEROSPACE
COMPOSITES AND ADVANCED ARMOUR MARKET GROUPS
END-USER MARKETING INNOVATION
PRODUCT DIFFERENTIATION COST LEADERSHIP
Royal Ten Cate 34
> REPOR T OF THE E XECUTIVE BOARD > Advanced Textiles & Composites
TenCate’s activities are increasingly moving towards systems that are integrated into vehicles (‘survivability systems’). The project-linked nature of revenues is an inherent feature of this market. Demand for composite materials in sectors other than aerospace and armour markets increased; the automotive sector in particular is an important potential growth area.
The operating result before amortisation of intangible fixed assets rose by 61% to € 70.3 million (2010: € 43.8 million). The currency effect amounted to – 7%. The EBITA margin rose to 13.1% (2010: 9.8%).
The growth of the aerospace market had a positive impact on the utilisation rate of Dutch production capacity, contributing to the strong profit improvement in the sector.
TENCATE PROTECTIVE FABRICS AND TENCATE OUTDOOR FABRICS
MARKET POSITION AND STRATEGY
TenCate Protective Fabrics is the market leader in America and Europe in the field of protective fabrics. The constantly widening product portfolio is now being marketed worldwide. TenCate focuses on four markets:
◾ defence and police
◾ industrial safety, firefighting and emergency response
◾ services, such as healthcare
◾ industry.
The products offer protection against a range of risks in the workplace, for example from chemicals, fire and static electricity. TenCate has acquired leading positions in various segments of this market, for which specific concepts have been or are being developed. TenCate Defender™ M materials are the most significant of these.
The market for professional wear and work clothing is highly regulated, with governments enacting labour legislation specifying safety standards in certain risk areas. TenCate customers are ready-to-wear clothing producers and industrial clothing laundries offering a full range of services for end-users. TenCate focuses on industrial markets, firefighting, emergency services and the healthcare sector.
New products, such as TenCate Tecasafe™ Plus for the American and Asian markets in particular, are playing an important role in the continuing market development, both domestically and internationally.
The concepts developed by TenCate for these markets are very The TenCate Protective Fabrics market group had an excellent year
with strong growth in both flame-resistant fabrics for US Army uniforms (TenCate Defender™ M) and safety fabrics (TenCate TecaSafe™ Plus) in the industrial market. The TenCate Space
& Aerospace Composites market group saw increased demand for aerospace composites (Airbus, Boeing). There were also positive developments in relations with other aircraft manufacturers.
The armour composites market in the United States was sluggish.
The Advanced Armour market group achieved slight revenue growth.
The order position in Europe showed a positive trend, leading to an increase in revenues in the whole vehicle armour business in Europe.
TenCate Tecasafe®Plus advances strongly in the United States
Since its launch in the United States in 2008, TenCate Tecasafe® Plus has become the most cost-effective and innovative inherently flame-retardant solution in the industrial safety market. TenCate Tecasafe® Plus offers a longer service life at lower cost, greater comfort and better flame protection than industrial flame-retardant fabrics from other suppliers. The protection cannot wash out or wear off. That makes it an excellent value proposition for ready-to-wear clothing manufacturers, industrial laundries and end-users.
TenCate Protective Fabrics USA has expanded its production capacity to meet the growing global demand for TenCate Tecasafe® Plus.
SUSTAINABILITY
TenCate Protective Fabrics endeavours on the one hand to make target groups aware of protection concepts and multi-risk solutions and on the other hand to influence standards and specifications in order to offer end-users the utmost security and protection. The market group regularly works closely with international customers in the chain (including in the laundry sector) and with industry organisations, with the aim of reducing the impact on the chain. This can be achieved by means of technological innovations and R&D projects, thereby increasing TenCate’s involvement in the setting of specifications in tenders. That is being done successfully with customers in sectors such as the petrochemical industry and the firefighting market. In defence organisations, a focus is on personal protection of military personnel to prevent burns and serious fire injuries and high social costs for rehabilitation and other measures (social interest).
GENERAL PERFORMANCE
The main contribution to the strong revenue growth in 2011 came from the TenCate Defender™ M and TenCate Tecasafe® Plus products.
The markets developed favourably for both product groups, including outside the United States and Europe. The foundation for this was expanded during the reporting year. A positive factor was that the exemption from import restrictions for the United States (Berry Amendment) for foreign fibres was extended to 2015 at the beginning of 2011. This exemption became permanent at the end of 2011.
In the United States and Canada, the market position and production activities were expanded with the acquisition of the assets of Difco Performance Fabrics in Montreal (Quebec, Canada) in the second quarter of the financial year.
TenCate generally witnessed strong interest in new concepts relating to fire-resistant fabrics in 2011. TenCate Tecasafe™ Plus and TenCate Defender™ M are based on fibre blends to meet the precise
specifications of customer groups. The value proposition lies primarily in the combination of unrivalled performance, optimum wearing comfort and economic prices compared to products based on 100% aramid fibres traditionally used in many markets. Together with TenCate Defender™ M, the TenCate Tecasafe® and TenCate Tecashield® ranges make up a complete portfolio of multi-risk safety fabrics for emergency response and defence applications.
promising, as the products are ideally positioned, with TenCate combining four essential characteristics: affordability, comfort, protection and long service life.
Defence applications are a highly successful development. TenCate Defender™ M is considered to be the US standard for uniforms with flame-resistant protection. As a result, this product is one of the major pillars underpinning TenCate’s strong growth in defence markets at home and abroad. As part of TenCate Protective Fabrics, the TenCate Defense & Tactical business unit on the one hand responds to the principle of end-user marketing with the TenCate Defender™ M platform (the development of specifications in close co-operation with various end-users) and on the other hand serves as a vehicle for the development of a worldwide sales strategy. This strategy is focused on expansion both in geographic terms and with regard to other defence applications (product differentiation).
TenCate’s positioning is supported by an industrial branding policy based mainly on the quality and functionality of high-grade protection.
TenCate supplies unique solution-focused concepts (systems). These have proved successful in use with the US Army.
TenCate has a broad technological base and access to the worldwide commodities market as a result of its long-term focus as a global player on this niche market. In addition to activities and strong market positions in the US and Europe, TenCate has established a joint venture in Thailand for the production of safety fabrics for the Asian market and for further development in this region. In 2011, the strategic efforts were scaled up to market the TenCate Tecasafe® Plus product portfolio worldwide. Global demand for TenCate Tecasafe® Plus is growing.
Various steps have been taken to respond to this growth, including an increase number of variants in the collection. End-users want the most economical protection combined with the excellent performance, comfort and quality of the fabrics. TenCate Tecasafe® Plus has become the preferred fabric on many continents. TenCate Tecasafe Plus® has also been well received in various new markets, such as South America, Asia and Australia. The increased service level is a key point.
In order to meet the demand for superior flame-retardant fabrics in South-East Asia, TenCate has built up inventories to ensure that the product is immediately available. TenCate has also stationed additional personnel in Asia to guarantee a high level of customer attention.