TenCate materials are at the cutting edge of textile, chemical and material techno logies.
TenCate focuses on added-value solutions to meet critical end-user requirements. Our customers make a difference with our materials and systems.
TenCate addresses market trends based on the global themes of safety, pro-tection and sustainability. This generates long-term growth for the company.
The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones.
Thermoplastic composite
The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex® product portfolio of TenCate Advanced Composites in cars. TenCate Cetex® is:
• Strong and impact-resistant: contributes to safety • Lightweight: saves fuel
• Mouldable: readily processable • Reusable and recyclable: sustainable
Royal T
en Cate
Annual Report 2011
Royal Ten Cate
MATERIALS THAT MAKE A DIFFERENCE
Colophon
business development & investor relations F.R. Spaan, corporate director
P.O. Box 58
7600 GD Almelo, The Netherlands Telephone +31 (0)546 544 911 Fax +31 (0)546 814 145 www.tencate.com
Royal Ten Cate
Annual Report 2011
Connected
by the value proposition
TextRoyal Ten Cate
Translation
VVH business translations, Maartensdijk
Concept and realisation C&F Report Amsterdam B.V., Amsterdam Printing Lulof Druktechniek B.V., Almelo Photography Paul Haverkort Bram Hendriks Frans Dekker Joost van Baars Marjo Baas Ton Kuper Roelof Pot De Jong Luchtfotografie Stephen Barnett Norbert Hekkink Courtesy © Gulfstream
Courtesy © Staff Sgt. Curt Cashour
Vista landschapsarchitectuur en stedenbouw
TenCate would like to hear from you. Please let u s know your views by e-mailing [email protected], stating the market group or officer you wish to contact.
TenCate materials are at the cutting edge of textile, chemical and material techno logies.
TenCate focuses on added-value solutions to meet critical end-user requirements. Our customers make a difference with our materials and systems.
TenCate addresses market trends based on the global themes of safety, pro-tection and sustainability. This generates long-term growth for the company.
The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones.
Thermoplastic composite
The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex® product portfolio of TenCate Advanced Composites in cars. TenCate Cetex® is:
• Strong and impact-resistant: contributes to safety • Lightweight: saves fuel
• Mouldable: readily processable • Reusable and recyclable: sustainable
Royal T
en Cate
Annual Report 2011
Royal Ten Cate
MATERIALS THAT MAKE A DIFFERENCE
Colophon
business development & investor relations F.R. Spaan, corporate director
P.O. Box 58
7600 GD Almelo, The Netherlands Telephone +31 (0)546 544 911 Fax +31 (0)546 814 145 www.tencate.com
Commercial overview and profile Operating companies, associated companies and other interests
Royal Ten Cate
Annual Report 2011
Connected
by the value proposition
TextRoyal Ten Cate
Translation
VVH business translations, Maartensdijk
Concept and realisation C&F Report Amsterdam B.V., Amsterdam Printing Lulof Druktechniek B.V., Almelo Photography Paul Haverkort Bram Hendriks Frans Dekker Joost van Baars Marjo Baas Ton Kuper Roelof Pot De Jong Luchtfotografie Stephen Barnett Norbert Hekkink Courtesy © Gulfstream
Courtesy © Staff Sgt. Curt Cashour
Vista landschapsarchitectuur en stedenbouw
TenCate would like to hear from you. Please let u s know your views by e-mailing [email protected], stating the market group or officer you wish to contact.
Royal Ten Cate (TenCate) is a multinational company which combines textile technology with chemical processes in the development and production of functional materials. On this technological basis, TenCate develops a range of applications (product-market-technology combinations) aimed at growth markets.
TenCate materials are mainly used for:
◾ personal safety and protection of the living and working environment;
◾ modernisation of equipment used by armed forces, fire brigades and police;
◾ aerospace (lower fuel costs due to lighter materials);
◾ water management, infrastructure and environmental care;
◾ industrial applications.
TenCate selects market areas mainly on the basis of global trends, specifically in the safety/protection and sustainability/ environmental fields. With regard to the characteristics of the materials (specifications), the markets are usually regulated by governments or agencies on the basis of legislation and regulations. TenCate’s direct customers are mainly public-sector bodies, system integrators, original equipment manufac turers and their direct suppliers.
TenCate presents itself as a developer and producer of materials, modules and systems with distinctive characteristics.
The company operates a value-chain model aimed at occupying distinctive positions by means of technological innovation, cost leadership, product differentiation and end-user marketing.
TenCate develops solutions for end-users by operating in network structures, such as open innovation centres, partnerships and co-creation, and by making acquisitions in complementary fields (product-market-technology combinations). The solution-focused system approach plays a key role. The policy of value-chain control has enabled TenCate to secure leading positions in worldwide niche markets.
TenCate employs around 4,350 people worldwide and strives to operate in an ethically and socially responsible way. TenCate encourages its employees to be enterprising, flexible and creative, thereby demonstrating its aim of achieving progress and sustainability for all stakeholders.
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, Netherlands Group activities of the TenCate Advanced Textiles group in the Netherlands Ten Cate Protect bv Nijverdal, Netherlands Ten Cate Protective Fabrics USA inc Union City (Georgia), USA Ten Cate Protective Fabrics Canada inc Montreal (Quebec), Canada Fabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate – Union Protective Fabrics Asia ltd Bangkok, Thailand (50.65%)
Fabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, Netherlands Advanced composites for the aircraft industry and antiballistic applications Ten Cate Advanced Composites USA inc Morgan Hill (California), USA Phoenixx TPC inc Taunton (Massachusetts), USA YLA inc Benicia (California), USA CCS Composites inc Benicia (California), USA Advanced composites for aerospace and industrial applications
TenCate Advanced Armour UK (AML) Swindon, UK Design and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, France Ten Cate Advanced Armour Danmark a/s Vissenbjerg, Denmark Advanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USA Advanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) (51%) Vissenbjerg, Denmark Active protection systems for army vehicles
AML India Private ltd (90%) Noida, India Design and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USA Ten Cate Geosynthetics Austria GmbH Linz, Austria Ten Cate Geosynthetics France sas Bezons, France Ten Cate Geosynthetics Netherlands bv Nijverdal, Netherlands Ten Cate Geosynthetics Asia sdn bhd Kuala Lumpur, Malaysia TenCate Industrial Zhuhai co ltd Zhuhai, China Geosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, Malaysia Ten Cate Geosynthetics (Thailand) ltd Bangkok, Thailand Ten Cate Geosynthetics pte ltd Singapore Ten Cate Geosynthetics Italia srl Lazzata, Italy Ten Cate Geosynthetics (UK) ltd Telford, UK Ten Cate Geosynthetics sl Madrid, Spain Ten Cate Geosynthetics Schweiz AG Zurich, Switzerland Ten Cate Deutschland GmbH Dietzenbach, Germany Ten Cate Geosynthetics Polska Spzoo Kraków, Poland Ten Cate Geosynthetics CZ sro Prague, Czech Republic Ten Cate Geosynthetics Rumania Bucharest, Romania Sales offi ces
Ten Cate Thiolon bv Nijverdal, Netherlands Ten Cate Thiolon USA inc Dayton (Tennessee), USA Ten Cate Thiolon Middle East (49%) 1) Dubai, UAE Synthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, Netherlands Backing for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, Netherlands GreenFields BV (100%)
(subsidiary of GreenFields Holding BV) Genemuiden, Netherlands
Xtra Grass BV 2) Kampen, Netherlands ProCourt Int BV 2) Zederik, Netherlands GreenFields Eastern Europe BV (60%) 2) Genemuiden, Netherlands
GreenFields Noo (Bresco) AS (60%) 2) Molde, Norway GreenFields Swiss AG (60%) 2) Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) 2) Nicosia, Cyprus GreenFields West Africa SARL (65%) 2) Cotonou, Benin GreenFields UK Sports Surfaces Ltd 2) Bolton, UK GreenFields India FZC (51%) 2) Sharjah, United Arab Emirates
GreenFields Pacifi c Pty Ltd 2) Brisbane, Australia Southern Greens BV (82%) 2) Kampen, Netherlands GreenFields Sports & Leisure Pty (55%) 3) Pietermaritzburg,
South Africa
Marketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New Zealand TigerTurf Australia pty ltd (80%) Campbellfi eld, Australia TigerTurf (UK) ltd (80%) Hartlebury, UK Tiger Sports Americas inc (80%) Austin (Texas), USA (all as at 28 April 2010; as at 31 March 2009: 49%)
Marketing and production organisations for synthetic turf systems Edel Grass bv (50%) Genemuiden, Netherlands Marketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Specialist inkjet technology for industrial applications
Ten Cate Systems bv Nijverdal, Netherlands Development activities
Ten Cate Enbi International bv Brunssum, Netherlands TenCate Enbi group holding company
Ten Cate Enbi GmbH Opladen, Germany Ten Cate Enbi kft Rétság, Hungary Ten Cate Enbi inc Shelbyville (Indiana), USA Ten Cate Enbi inc Rochester (New York), USA Ten Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, China Technical rollers and components for printers, copiers, fax machines, postal sorting machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, Netherlands Insurance
Ten Cate Nederland bv Almelo, Netherlands Royal Ten Cate USA inc Atlanta (Georgia), USA Ten Cate USA inc Washington D.C., USA
Ten Cate UK ltd London, UK
Ten Cate France sas Paris, France Ten Cate Deutschland GmbH Opladen, Germany Ten Cate Danmark a/s Copenhagen, Denmark Royal Ten Cate Pacifi c ltd Hong Kong, China Royal Ten Cate China Holding ltd Hong Kong, China Country holding companies
Ten Cate Finance AG Schaffhausen, Switzerland Financing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, Netherlands Marketing and production organisation for synthetic turf for landscaping use Hellas Construction Inc (30%) Austin (Texas), USA Production and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UK Marketing and installation of synthetic turf systems
The operating companies listed here are consolidated in the financial statements, with the exception of the companies shown as non-consolidated. Some interests of minor relevance to the overall picture have been omitted from the list, in accordance with article 379, paragraph 3, Book 2 of the Netherlands Civil Code.
The companies are wholly owned unless stated otherwise.
COMMERCIAL OVERVIEW
As at 1 January 2012
PROFILE
SUBSIDIARIES, ASSOCIATED COMPANIES AND OTHER INTERESTS
as at 31 December 2011
GEOSYNTHETICS & GRASS SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions for industry, services, firefighting and defence
◾ TenCate Protective Fabrics Americas
◾ TenCate Protective Fabrics EMEA
◾ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications
◾ TenCate Outdoor Fabrics Europe
SPACE & AEROSPACE COMPOSITES Advanced composites, compounds and systems for the aerospace industry
◾ TenCate Advanced Composites Americas
◾ TenCate Advanced Composites EMEA
INDUSTRIAL COMPOSITES Advanced composites, compounds and systems for industrial applications, including automotive, industrial components and energy extraction
◾ TenCate Advanced Composites Americas
◾ TenCate Advanced Composites EMEA
ADVANCED ARMOUR
Advanced composites, ceramics and integrated systems for the active and passive protection of police, army, air force, navy and civilian service personnel, vehicles and vessels
◾ TenCate Advanced Armour Americas
◾ TenCate Advanced Armour EMEA
◾ TenCate Advanced Armour Asia
INKJET TECHNOLOGY Specialist inkjet technology for industrial production processes
◾ Xennia Technology
TECHNICAL COMPONENTS Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs
◾ TenCate Enbi North America
◾ TenCate Enbi EMEA
◾ TenCate Enbi Asia GEOSYNTHETICS
Synthetic fabrics, non-wovens and grids for solutions and applications in infrastructure, civil engineering, water management, the environ-mental sector, agriculture and horticulture
◾ TenCate Geosynthetics Americas
◾ TenCate Geosynthetics EMEA
◾ TenCate Geosynthetics Asia
GRASS
Synthetic turf components and inte-grated synthetic turf systems for top-flight sports, recreation and landscape projects
Upstream
◾ TenCate Grass Americas
◾ TenCate Grass EMEA
◾ TenCate Grass Asia
Downstream
◾ Edel Grass (50%)
◾ GreenFields (90%)
◾ TigerTurf (80%)
◾ Hellas Construction (30%)
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries which co-operate intensively in research & development, production, end-user marketing and sales.
An overview of the legal entities which make up the company can be found on the inside back cover.
ADVANCED TEXTILES & COMPOSITES SECTOR
OTHER ACTIVITIES SECTOR
1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
2) Subsidiary of GreenFields BV 3) Subsidiary of Southern Greens BV HOLDING & SERVICES
Holding company activities
Royal Ten Cate (TenCate) is a multinational company which combines textile technology with chemical processes in the development and production of functional materials. On this technological basis, TenCate develops a range of applications (product-market-technology combinations) aimed at growth markets.
TenCate materials are mainly used for:
◾ personal safety and protection of the living and working environment;
◾ modernisation of equipment used by armed forces, fire brigades and police;
◾ aerospace (lower fuel costs due to lighter materials);
◾ water management, infrastructure and environmental care;
◾ industrial applications.
TenCate selects market areas mainly on the basis of global trends, specifically in the safety/protection and sustainability/ environmental fields. With regard to the characteristics of the materials (specifications), the markets are usually regulated by governments or agencies on the basis of legislation and regulations. TenCate’s direct customers are mainly public-sector bodies, system integrators, original equipment manufac turers and their direct suppliers.
TenCate presents itself as a developer and producer of materials, modules and systems with distinctive characteristics.
The company operates a value-chain model aimed at occupying distinctive positions by means of technological innovation, cost leadership, product differentiation and end-user marketing.
TenCate develops solutions for end-users by operating in network structures, such as open innovation centres, partnerships and co-creation, and by making acquisitions in complementary fields (product-market-technology combinations). The solution-focused system approach plays a key role. The policy of value-chain control has enabled TenCate to secure leading positions in worldwide niche markets.
TenCate employs around 4,350 people worldwide and strives to operate in an ethically and socially responsible way. TenCate encourages its employees to be enterprising, flexible and creative, thereby demonstrating its aim of achieving progress and sustainability for all stakeholders.
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, Netherlands Group activities of the TenCate Advanced Textiles group in the Netherlands Ten Cate Protect bv Nijverdal, Netherlands Ten Cate Protective Fabrics USA inc Union City (Georgia), USA Ten Cate Protective Fabrics Canada inc Montreal (Quebec), Canada Fabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate – Union Protective Fabrics Asia ltd Bangkok, Thailand (50.65%)
Fabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, Netherlands Advanced composites for the aircraft industry and antiballistic applications Ten Cate Advanced Composites USA inc Morgan Hill (California), USA Phoenixx TPC inc Taunton (Massachusetts), USA YLA inc Benicia (California), USA CCS Composites inc Benicia (California), USA Advanced composites for aerospace and industrial applications
TenCate Advanced Armour UK (AML) Swindon, UK Design and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, France Ten Cate Advanced Armour Danmark a/s Vissenbjerg, Denmark Advanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USA Advanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) (51%) Vissenbjerg, Denmark Active protection systems for army vehicles
AML India Private ltd (90%) Noida, India Design and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USA Ten Cate Geosynthetics Austria GmbH Linz, Austria Ten Cate Geosynthetics France sas Bezons, France Ten Cate Geosynthetics Netherlands bv Nijverdal, Netherlands Ten Cate Geosynthetics Asia sdn bhd Kuala Lumpur, Malaysia TenCate Industrial Zhuhai co ltd Zhuhai, China Geosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, Malaysia Ten Cate Geosynthetics (Thailand) ltd Bangkok, Thailand Ten Cate Geosynthetics pte ltd Singapore Ten Cate Geosynthetics Italia srl Lazzata, Italy Ten Cate Geosynthetics (UK) ltd Telford, UK Ten Cate Geosynthetics sl Madrid, Spain Ten Cate Geosynthetics Schweiz AG Zurich, Switzerland Ten Cate Deutschland GmbH Dietzenbach, Germany Ten Cate Geosynthetics Polska Spzoo Kraków, Poland Ten Cate Geosynthetics CZ sro Prague, Czech Republic Ten Cate Geosynthetics Rumania Bucharest, Romania Sales offi ces
Ten Cate Thiolon bv Nijverdal, Netherlands Ten Cate Thiolon USA inc Dayton (Tennessee), USA Ten Cate Thiolon Middle East (49%) 1) Dubai, UAE Synthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, Netherlands Backing for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, Netherlands GreenFields BV (100%)
(subsidiary of GreenFields Holding BV) Genemuiden, Netherlands
Xtra Grass BV 2) Kampen, Netherlands ProCourt Int BV 2) Zederik, Netherlands GreenFields Eastern Europe BV (60%) 2) Genemuiden, Netherlands
GreenFields Noo (Bresco) AS (60%) 2) Molde, Norway GreenFields Swiss AG (60%) 2) Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) 2) Nicosia, Cyprus GreenFields West Africa SARL (65%) 2) Cotonou, Benin GreenFields UK Sports Surfaces Ltd 2) Bolton, UK GreenFields India FZC (51%) 2) Sharjah, United Arab Emirates
GreenFields Pacifi c Pty Ltd 2) Brisbane, Australia Southern Greens BV (82%) 2) Kampen, Netherlands GreenFields Sports & Leisure Pty (55%) 3) Pietermaritzburg,
South Africa
Marketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New Zealand TigerTurf Australia pty ltd (80%) Campbellfi eld, Australia TigerTurf (UK) ltd (80%) Hartlebury, UK Tiger Sports Americas inc (80%) Austin (Texas), USA (all as at 28 April 2010; as at 31 March 2009: 49%)
Marketing and production organisations for synthetic turf systems Edel Grass bv (50%) Genemuiden, Netherlands Marketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Specialist inkjet technology for industrial applications
Ten Cate Systems bv Nijverdal, Netherlands Development activities
Ten Cate Enbi International bv Brunssum, Netherlands TenCate Enbi group holding company
Ten Cate Enbi GmbH Opladen, Germany Ten Cate Enbi kft Rétság, Hungary Ten Cate Enbi inc Shelbyville (Indiana), USA Ten Cate Enbi inc Rochester (New York), USA Ten Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, China Technical rollers and components for printers, copiers, fax machines, postal sorting machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, Netherlands Insurance
Ten Cate Nederland bv Almelo, Netherlands Royal Ten Cate USA inc Atlanta (Georgia), USA Ten Cate USA inc Washington D.C., USA
Ten Cate UK ltd London, UK
Ten Cate France sas Paris, France Ten Cate Deutschland GmbH Opladen, Germany Ten Cate Danmark a/s Copenhagen, Denmark Royal Ten Cate Pacifi c ltd Hong Kong, China Royal Ten Cate China Holding ltd Hong Kong, China Country holding companies
Ten Cate Finance AG Schaffhausen, Switzerland Financing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, Netherlands Marketing and production organisation for synthetic turf for landscaping use Hellas Construction Inc (30%) Austin (Texas), USA Production and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UK Marketing and installation of synthetic turf systems
The operating companies listed here are consolidated in the financial statements, with the exception of the companies shown as non-consolidated. Some interests of minor relevance to the overall picture have been omitted from the list, in accordance with article 379, paragraph 3, Book 2 of the Netherlands Civil Code.
The companies are wholly owned unless stated otherwise.
Royal Ten CateAnnual Report 2011 Royal Ten CateAnnual Report 2011
COMMERCIAL OVERVIEW
As at 1 January 2012
PROFILE
SUBSIDIARIES, ASSOCIATED COMPANIES AND OTHER INTERESTS
as at 31 December 2011
GEOSYNTHETICS & GRASS SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions for industry, services, firefighting and defence
◾ TenCate Protective Fabrics Americas
◾ TenCate Protective Fabrics EMEA
◾ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications
◾ TenCate Outdoor Fabrics Europe
SPACE & AEROSPACE COMPOSITES Advanced composites, compounds and systems for the aerospace industry
◾ TenCate Advanced Composites Americas
◾ TenCate Advanced Composites EMEA
INDUSTRIAL COMPOSITES Advanced composites, compounds and systems for industrial applications, including automotive, industrial components and energy extraction
◾ TenCate Advanced Composites Americas
◾ TenCate Advanced Composites EMEA
ADVANCED ARMOUR
Advanced composites, ceramics and integrated systems for the active and passive protection of police, army, air force, navy and civilian service personnel, vehicles and vessels
◾ TenCate Advanced Armour Americas
◾ TenCate Advanced Armour EMEA
◾ TenCate Advanced Armour Asia
INKJET TECHNOLOGY Specialist inkjet technology for industrial production processes
◾ Xennia Technology
TECHNICAL COMPONENTS Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs
◾ TenCate Enbi North America
◾ TenCate Enbi EMEA
◾ TenCate Enbi Asia GEOSYNTHETICS
Synthetic fabrics, non-wovens and grids for solutions and applications in infrastructure, civil engineering, water management, the environ-mental sector, agriculture and horticulture
◾ TenCate Geosynthetics Americas
◾ TenCate Geosynthetics EMEA
◾ TenCate Geosynthetics Asia
GRASS
Synthetic turf components and inte-grated synthetic turf systems for top-flight sports, recreation and landscape projects
Upstream
◾ TenCate Grass Americas
◾ TenCate Grass EMEA
◾ TenCate Grass Asia
Downstream
◾ Edel Grass (50%)
◾ GreenFields (90%)
◾ TigerTurf (80%)
◾ Hellas Construction (30%)
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries which co-operate intensively in research & development, production, end-user marketing and sales.
An overview of the legal entities which make up the company can be found on the inside back cover.
ADVANCED TEXTILES & COMPOSITES SECTOR
OTHER ACTIVITIES SECTOR
1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
2) Subsidiary of GreenFields BV 3) Subsidiary of Southern Greens BV HOLDING & SERVICES
Holding company activities
Annual report 2011
Royal Ten Cate
Commercial overview Inside cover Profile Inside cover Financial highlights 2
TenCate in 2011 4 TenCate technology overview 6 Key developments in 2011 9 Evaluation of 2011 action plans 10 Vision, mission, strategy and objectives 12 Foreword by the Chairman of the Executive Board 14 The TenCate share 16
Share listing 16
Investor relations policy and communication 16
Dividend policy and proposed dividend 16
Disclosure of Major Holdings in Listed Companies Act 17
Option plan 17
Spread of shareholdings 17
Theme: Connected by the value proposition 18 Report of the Supervisory Board 20 The Boards 22 Report of the Executive Board 25
Financial performance 28
Activities by sector 33
Post balance sheet events 58
Outlook 59 Actions for 2012 60 Corporate information 61 Corporate governance 61 SWOT analysis 61 Risk management 62
Human resources management 66
Corporate information technology 69
Corporate intellectual property 69
Corporate social responsibility 70
Statement by the Executive Board 75
Financial statements 2011 76 Other information 133 Ten-year summary 135 Operating companies, associated companies
and other interests Inside cover Colophon Outside cover
Royal Ten Cate 2 1,200 960 720 480 240 0 2007 2008 2009 2010 2011 3.0 2.4 1.8 1.2 0.6 0 2007 2008 2009 2010 2011 600 480 360 240 120 0 2007 2008 2009 2010 2011 125 100 75 50 25 0 2007 2008 2009 2010 2011 1.0 0.8 0.6 0.4 0.2 0 2007 2008 2009 2010 2011 600 480 360 240 120 0 2007 2008 2009 2010 2011 75 60 45 30 15 0 2007 2008 2009 2010 2011 100 80 60 40 20 0 2007 2008 2009 2010 2011
Financial highlights
Advanced Textiles & Composites
€ 538.4 mln
(+ 20%)
REVENUES BY SECTOR PER-SHARE DATA FINANCIAL HIGHLIGHTS Revenues€ 1,138.8 mln
(+ 16%)
EBITA€ 102.5 mln
(+ 21%)
Net result€ 58.7 mln
(+ 28%)
75 60 45 30 15 0 2007 2008 2009 2010 2011 45 36 27 18 9 0 2007 2008 2009 2010 2011 15 10 5 0 –5 –10 2007 2008 2009 2010 2011Advanced Textiles & Composites
€ 70.3 mln
(+ 61%)
EBITA BY SECTOR
Geosynthetics & Grass
€ 26.3 mln
(– 16%)
Other activities€ 5.9 mln
(– 40%)
Other activities€ 74.5 mln
(+ 12%)
Geosynthetics & Grass
€ 525.9 mln
(+ 12%)
Net result*
€ 2.31
* Excluding income from sale
of activities and exceptional items
PROFIT AND LOSS ACCOUNT 2011 2010
Revenues 1,138.8 984.5
Operating result before depreciation and amortisation (EBITDA) 137.5 119.5
Operating result before amortisation (EBITA) 102.5 85.0
Operating result before amortisation as % of revenues (EBITA margin) 9.0% 8.6%
Operating result (EBIT) 89.6 74.6
Net result 58.7 46.0
CONSOLIDATED BALANCE SHEET AND RETURN
Net capital employed (year-end) 808.8 715.4
Return (EBITA) on average net capital employed 13.1% 12.1%
Net interest bearing debt (year-end) 288.7 240.7
CONSOLIDATED CASH FLOW
Cash flow from operating activities 49.3 29.1
Investments less divestments of fixed assets – 22.3 – 20.4
Free cash flow 27.0 8.7
Balance of acquisitions/disposals of operating companies and participating interests – 34.8 – 24.7
OUTSTANDING SHARES (X 1,000)
Number of outstanding shares at year-end 25,929 25,502
Weighted average number of shares (before dilution) 25,452 25,026
Weighted average number of shares (after dilution) 25,736 25,216
PER-SHARE DATA
Net result 2.31 1.84
Diluted net result 2.28 1.82
Dividend per share 0.95 0.75
Equity* 17.96 17.19
EMPLOYEES
Number of staff years at year-end 4,353 4,271
– of which in the Netherlands 819 785
Royal Ten Cate 4 0 5 10 15 20 25 30 35 40 45 50
NETHERLANDS BELGIUM GERMANY UK FRANCE AUSTRIA ITALY SPAIN OTHER EU OTHER EUROPE MIDDLE EAST USA + CANADA SOUTH AMERICA CENTRAL AND ASIA REST OF THE WORLD
Geographic breakdown of sales in in 2011 in per cent
◾ By destination ◾ By origin
TenCate in 2011
In 2011, TenCate maintained the growth trend that began
in 2010, with revenues and profitability rising strongly
again to record levels. TenCate succeeded once again
in strengthening its market positions by means of the
buy & build strategy.
The growth in 2011 resulted mainly from the focus on materials that enable the Company to anticipate market trends on the basis of the right value proposition. The global market trends of safety and sustainability once again generated a positive market climate overall in 2011.
TenCate is able to project a highly distinctive international profile, partly due to the Company’s ground-breaking approach based on technological innovation and product differentiation. That makes TenCate an attractive partner for innovation and product and market development. As a connecting factor within TenCate, the technology position constantly gives rise to new possibilities in the market. This annual report seeks particularly to highlight the activities that have been and are being developed in order to gear the technological lead and product differentiation to the marketplace as far as possible by adopting an outside-in approach.
Americas NORTH AMERICA United States Canada SOUTH AMERICA Brazil EMEA EUROPE Belgium Denmark Germany United Kingdom France Hungary Ireland Italy Netherlands Austria Poland Romania Spain Czech Republic Switzerland AFRICA Benin South Africa MIDDLE EAST Dubai AsiaPacifi c ASIA China India Malaysia Singapore Thailand South Korea OCEANIA Australia New Zealand TenCate has its own production sites and sales offi ces in the following countries:
Production and sales Sales
◾ Advanced Textiles & Composites ◾ Geosynthetics & Grass
◾ Other activities
◾ Advanced Textiles & Composites ◾ Geosynthetics & Grass
◾ Other activities 7% 46% 47% 7% 47% 46% Revenues 2011 (€ 1,138.8 million) in per cent Revenues 2010 (€ 984.5 million) in per cent
The Advanced Textiles & Composites sector is concentrated around impregnation and coating technologies for the application or incorporation of functional characteristics in and on textiles. The products in this sector mainly comprise protective fabrics and composite materials (made particularly of carbon fibres, glass fibres and aramids). TenCate is the global market leader in protective fabrics and one of the leading companies in the field of composite materials.
Uses: ◾ Defence ◾ Industry
◾ Firefighting, police ◾ Aerospace industry
◾ Automotive and energy sector
The Geosynthetics & Grass sector is concentrated around extrusion and non-woven technologies. Geosynthetics products play an important role in the separation of soil layers and in the stabilisation of groundworks and dyke bodies. Geosynthetics are increasingly being used for the filtration and dewatering of polluted sludge. Synthetic turf is seeing growing use worldwide, driven principally by climate conditions, water scarcity and lower maintenance costs. Not least, an important factor is that synthetic turf sports pitches remain playable 24 hours a day and in less favourable weather conditions.
Geosynthetics and synthetic turf are global markets. TenCate occupies the number-one position in these markets.
Uses:
◾ Infrastructure projects and water management ◾ Environmental market
◾ Agriculture sector ◾ Sports pitches market ◾ Landscaping, leisure market
Revenues
€ 538.4 mln
Revenues+ 20%
Revenues€ 525.9 mln
Revenues+ 12%
EBITA€ 70.3 mln
EBITA+ 61%
EBITA€ 26.3 mln
EBITA– 16%
ADVANCED TEXTILES & COMPOSITES SECTOR
GEOSYNTHETICS & GRASS SECTOR
◾ Protective fabrics ◾ Armour composites ◾ Space/aerospace composites ◾ Geosynthetics ◾ Grass Upstream ◾ Grass Downstream
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TenCate technology overview
MATERIAL TECHNOLOGY
PRODUCTS (materials, modules, systems) MARKETS
V
ALUE CHAIN MANAGEMENT
END-USER
END-USER MARKETING market management DIFFERENTIATION portfolio management process management COST LEADER INNOVATION GLOBAL TRENDSSafety and protection, sustainability and environment
protective fabrics outdoor fabrics space composites aerospace composites
Fiber technology Textile technology
Basic technologies
P Physics
C Chemistry / Chemical engineering
PC Nanotechnology / Polymer chemistry
BT Biomedical technology
ME Mechanical engineering
business development
VALUE CHAIN MANAGEMENT
EXTERNAL INTERNAL business development portfolio management process management market management END-USER MARKETING market product technology process DIFFERENTIATION INNOVATION COST LEADER
industrial composites advanced armour geosynthetics grass
Finish technology
TenCate business model © TenCate
© TenCate
M Mechatronics
IT ICT
ADVANCED ARMOUR
Connected
through the value proposition
Troops in theatre need the best and most advanced protection. Insurgency tactics have not only caused a great many casualties, but also had an impact on military operations and logistics. There is an evident need for enhanced protection, in combination with increased mobility of military vehicles.
The TenCate ABDS™ active blast countermeasure system is an innovative defence solution, against a number of improvised explosive devices. This active protection system effectively mitigates the devastating effects of IEDs, fulfi lling STANAG 4569 at classifi ed levels.
While defeating the acceleration of the vehicle and preserving the vehicle hull, the TenCate ABDS™ active blast countermeasure system delivers a structural and biomechanical response mode for a range of combat and tactical military vehicles.
Key developments in 2011
◾ 16% Revenue growth
Revenues in 2011 amounted to € 1,138.8 million (2010: € 984.5 million). The organic rise in revenues amounted to 12%. The Protective Fabrics market group made a major contribution to the revenue growth. In particular, there was strong growth in TenCate Defender™ M and TenCate Tecasafe™ products. TenCate successfully created new standards in the world market for protective fabrics with these brands.
◾ 28% Net profit growth
Net profit in 2011 amounted to € 58.7 million (2010: € 46.0 million). The profit growth was achieved particularly as a result of higher profits in the United States and the Netherlands.
◾ Strong growth in the Advanced Textiles & Composites sector
TenCate Protective Fabrics recorded strong growth in revenues from the TenCate Defender™ M and TenCate Tecasafe™ products. These two product groups contributed a substantial portion of this se ctor’s total revenues in 2011. There was also considerable growth in revenues from aerospace composites. The growth took place both in Europe and America. The production of composite materials for the Airbus A380 contributed a substantial share.
◾ Mixed picture for Geosynthetics & Grass sector
The Geosynthetics & Grass sector showed a mixed picture. TenCate Geosynthetics put in an excellent performance worldwide. In the Grass group revenues declined compared to 2010 due to the ending of the supply contract with a major customer following a strategic reorientation. TenCate was unable to compensate fully for this loss of revenues during the year. It put pressure on profits because it was not possible to take full advantage of the economies of scale within TenCate Grass. Alliances were entered into with new market participants during the year.
◾ Positive developments in new markets / strengthening
of local presence
Revenues in Asia and South America continue to grow strongly, particularly in protective fabrics and geosynthetics. The acquisition of Emas Kiara in Malaysia (geosynthetics) was completed. In India, the market activities of TenCate Protective Fabrics and TenCate Advanced Armour were merged to form TenCate Protection Systems in order to increase their efficiency as a combined operation. In China, the local management was strengthened to facilitate a differentiated approach to the Chinese market. A co-operation agreement was signed with Chinamex to supply the market for protective fabrics (military uniforms, police, firefighting).
◾ Start-up of new activities in aerospace armour
TenCate is initiating activities in vehicle and helicopter armour, for which the production site opened in France in the second half of 2011. The first major long-term contract was for armour for Eurocopter (EADS) helicopters.
◾ Start of the market launch phase for the TenCate ABDS™ active
blast countermeasure system
Following the completion of the test phase, TenCate is initiating the market phase for the TenCate ABDS™ active blast
countermeasure system jointly with military vehicle manufacturers. A 51% majority holding in ABDS ApS was acquired at the end of 2011 in order to accelerate this process. The acquisition of all the shares in ABDS ApS was completed at the beginning of 2012.
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Evaluation of 2011 action plans
◾ Strengthening of the Company profile
TenCate has strengthened its profile, including through advertising and specialist publications in the US media, partly because a large proportion of revenues are generated in America. The main thrust involved raising awareness of the protection characteristics of TenCate products, TenCate’s relationship with fellow companies in the US textile industry involved as part of the value chain in the production process for TenCate Defender™ M. At the beginning of 2011, the waiver under the US Berry Amendment (import exemption for non-US goods) was extended until 2015. The U.S. Congress granted a permanent waiver at the end of 2011.
◾ Reinforcement of sustainability concept and introduction of
measurable performance indicators
In line with previous initiatives, good progress was made in 2011 in reinforcing the sustainability policy by means of corporate social responsibility. TenCate is focusing increasingly on making the CSR policy more measurable and visible. At the same time, customers are increasingly demanding more sustainable products.
The following are examples of individual projects that have been started or completed:
◾ The new process ecotool is being used in market groups in the Netherlands;
◾ The new product ecotool has determined the detailed CO2 footprint of TenCate Geotube®;
◾ Various sustainability and quality certification processes were completed or extended in the Netherlands and abroad; ◾ A substantial number of innovation projects have sustainability
as a main or sub-theme;
◾ TenCate’s sponsorship projects in the Netherlands and abroad are demonstrating the company’s social involvement.
◾ Longer-term profit growth
Various business development projects have been assigned strategic priority. This has resulted in a particular focus. TenCate has a number of attractive possibilities, which can contribute a major share of future growth or give rise to the technological renewal that will strengthen TenCate’s market position. The following are examples:
◾ Digital finishing by means of inkjet technology;
◾ Woven synthetic turf systems / integrated synthetic turf systems; ◾ TenCate ABDS™ active blast countermeasure system;
◾ Expansion of the TenCate Cetex® product portfolio (thermoplastic composites).
◾ Implementation of emerging markets strategy
TenCate is strengthening its market position and presence in emerging markets. This is a gradual process, preceded by a thorough analysis of the market structure and the potential partners operating in it. In view of the risks and turnaround times, a greenfield operation is usually a good option. The acquisition of Emas Kiara (geosynthetics, Malaysia) was completed at the beginning of 2011, considerably increasing TenCate’s market share in the region. The protective fabrics activities for the Asian market were strengthened from the Bangkok site (TenCate – Union Protective Fabrics, Thailand). A co-operation agreement was signed with Chinamex (China) for the Chinese market. The management of TenCate Pacific in Hong Kong was strengthened at the end of 2011.
◾ New uses for TenCate materials
The automotive industry is one of the most important new areas for the use of TenCate materials. The industry is increasingly realising that in the near future markets will need light, high-performance materials which can be incorporated in large volumes in industrial manufacturing processes. TenCate is one of the few companies in the composites sector to have many years of experience in the aircraft industry in both the production and processing of thermoplastic composites for secondary and primary structural components as well as interior applications (TenCate Cetex®). At the end of 2011, TenCate began to form the Industrial Composites group, the third pillar in the composites group alongside the existing space and aerospace composites and armour materials groups.
◾ Profit improvement at Xennia Technology
The positive revenue growth at Xennia Technology has not yet led to a rising profit trend, because development and patent costs are still relatively high. Research & development activities for third parties (contract research) have been considerably reduced as a result of the policy focused on profit growth. Xennia Technology is now serving a growing number of international markets jointly with and through third parties.
◾ Continuation of the buy & build strategy
TenCate has announced an ambitious growth objective for the years ahead, with a revenue target of approximately € 2 billion. Value creation is being boosted by acquisitions, the strengthening of existing activities and their profitability and market
development.
Product, market and technology developments were structured more efficiently in 2011. There is good internal co-operation and a stronger involvement and commitment on the part of the market groups in selecting the strategic growth possibilities. Projects are being initiated on the basis of a clear market vision and growth objective.
◾ Leading role in the consolidation of the synthetic turf market
In TenCate’s synthetic turf activities, attention is increasingly shifting from the product (the components of a synthetic turf system) to the required results for the user (system solutions). This approach is increasingly centred on quality, durability, performance and safety for players. Strategic co-operation with market participants (knowledge integration) is essential in this regard. The creation of an international marketing and sales network linked to the production of synthetic turf fibres and carpet backing is expected to be completed in 2012.
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Vision, mission, strategy and objectives
VISION
TenCate develops and produces functional materials which are distinctive in terms of their characteristics. TenCate focuses on worldwide trends in the field of safety / protection and sustainability / environment, as well as derivative themes, which promote the growth of the company.
Markets demand specific critical functionalities to meet specific needs, which are usually determined by standardisation or legislation and regulations. Safety / protection and sustainability / environment are trends that are tightly regulated worldwide.
TenCate operates in the field of material science. Technological development is an important means of complying with standards and meeting requirements or adjusting standards in such a way that progress can be made in terms of functionalities.
TenCate products are used in systems. TenCate increasingly provides the overall solution, either independently or in co-operation with partners.
MISSION
Progress is one of the principal motives of TenCate. The company aims to be a leader in providing sustainable solutions for complex requirements relating to personal protection and protection of the personal environment. TenCate has secured a leading position in its markets worldwide, partly as a result of its broad technological competence.
STRATEGY
TenCate’s strategy is based on the concept of global value chain management. On this basis TenCate works with numerous links in the chain in sustainable growth markets. The four cornerstones of this policy are:
1. End-user marketing and an industrial intellectual property policy; 2. Product differentiation, targeted at specific applications and
customer requirements; 3. Technological innovation; 4. Cost leadership.
TenCate USA welcomes members of US Congress and Dutch ambassador Members of the United States Congress paid working visits to TenCate Geosynthetics in Pendergrass (Georgia) and TenCate Advanced Armour in Hebron (Ohio) in August 2011. In Pendergrass they discussed the characteristics and applications of geosynthetics in areas such as infrastructure projects. In Hebron they learned about armour applications and projects in the field of vehicle and personal protection. TenCate Protective Fabrics in Union City (Georgia) also welcomed Renée Jones-Bos, the Netherlands’ ambassador to the United States, in November. This working visit also served to strengthen the economic and cultural ties between the Netherlands and Georgia.
FINANCIAL STRATEGIC OBJECTIVES
◾ The net capital employed must generate a sufficient return. The operating result before amortisation as a percentage of average net capital employed must be at least 15%.
◾ The financial position must be sufficiently solid. The ratio of net interest-bearing debt to the operating result before depreciation and amortisation (EBITDA) must be structurally lower than 2.5. ◾ The target of 10% annual profit growth is based on EBITA
(operating result before amortisation). To this end, the buy & build strategy will be pursued. Higher added value and efficiency are also necessary, since the organic growth of the core activities is expected to be below 10% on average.
◾ An appropriate profit margin must be achieved. The consolidated EBITA margin must rise to at least 10%.
Achievement of targets:
Target Actual
Return on average net capital employed > 15% 13.1%
Debt ratio (debt / EBITDA) < 2.5 2.12
EBITA growth at least 10% > 10% 20.6%
EBITA margin > 10% 9.0%
OBJECTIVES
QUALITATIVE STRATEGIC OBJECTIVES
◾ Creation of shareholder value through profitable growth based on our knowledge, skill and internal synergy. In this way we can fulfil our social responsibilities, from economic, environmental and social perspectives.
◾ Achievement of critical mass in product-market-technology combinations by securing leading positions in worldwide market niches.
◾ Achievement of a healthy financial position with sufficient strength for acquisitions.
◾ Management of a balanced portfolio of activities, in which product-market-technology combinations differ in terms of growth opportunities and risk profile.
◾ Stimulation of an open, creative and enterprising culture for change, renewal and progress.
◾ Management of a global commercial organisation which thinks in terms of (system) solutions within the overall value chain.
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SUBSTANTIAL REVENUE AND PROFIT GROWTH
In 2011, TenCate successfully maintained the recovery which had begun in 2010, with a further strong rise in revenues and profit. Revenues and net profit amounted to € 1,138.8 million (+ 16%) and € 58.7 million (+ 28%) respectively. The growth was achieved despite continued challenging economic conditions, mainly thanks to TenCate’s leading product, market and technology positions in the niche markets in which the company operates worldwide.
Although growth was achieved across a wide base, there was a substantial contribution from the Protective Fabrics market group. This was one of the fastest-growing product groups in 2011 as a result of the successful product differentiation policy (including TenCate Tecasafe™ Plus and TenCate Defender™ M). Further internationalisation (Asia and South America) also contributed to the continuing growth.
INTERNATIONAL PROFILE
Looking back, it can be seen that TenCate has succeeded in constantly strengthening its market position by means of the buy & build strategy. This was the case again in 2011, mainly as a result of the market focus on materials that enable the Company to anticipate market trends on the basis of the right value proposition.
TenCate is able to project a highly distinctive international profile, partly due to the company’s ground-breaking approach based on technological innovation and product differentiation. That makes TenCate an attractive partner for innovation and product and market development. Examples of this are the technological developments in Xennia Technology in the field of digital textile finishing and the developments with regard to the TenCate ABDS™ active blast countermeasure system. TenCate is also viewed as an attractive partner in the field of thermoplastic composites (TenCate Cetex®). TenCate also fulfilled a pioneering role in crucial knowledge areas in the past, including in developments in the field of synthetic turf and thermoplastic composites. This has resulted in pre-eminent market leadership. As a connecting factor within TenCate, the technology position constantly gives rise to new possibilities in the market. The worldwide market trends of safety and sustainability once again generated a positive market climate overall in 2011.
TenCate operates in the international market in general as
a transnational company*. Characteristic features of this role include
a strong internal network structure and mutual exchanges of
information, with the company positioning its products strongly in local markets. Gearing product specifications to local requirements or specific market groups is crucial and also leads to fragmentation of markets or market niches. In this regard, TenCate exhibits strong features of a global enterprise in the fields of finance, marketing/ branding and end-user marketing. TenCate also has purchasing and production advantages based on worldwide access to commodities markets and economies of scale. This international profile, which combines the best of both worlds, is important in order to achieve continuing growth, particularly at the present time.
VALUE PROPOSITION FOR THE MARKET
Value creation is a central theme of this annual report, because it plays a major role in numerous market propositions. TenCate’s development processes are characterised by a pragmatic approach, reliability and thorough knowledge and experience. With its broad knowledge base in the field of textile technology combined with chemicals (material science), TenCate is a unique technology company. This annual report seeks particularly to highlight the activities that have been and are being developed in order to gear the technological lead and product differentiation to the marketplace as far as possible by adopting an outside-in approach.
‘Materials that make a difference’ is a promise to the market. TenCate’s market increasingly puts the end-user at the centre. Although the company operates in a business-to-business environment, end-user marketing is a characteristic success factor. The aim is to create value for the end-user. In markets dominated by specifications, standards and product criteria, which are usually determined by government bodies, this aspect is of great importance. Particularly when government budgets are being cut, systems which save costs in the short or long term offer positive results. Against this backdrop increasing importance is being attributed to sustainability and social and ethical criteria in end-markets. TenCate therefore also incorporates these aspects into the overall proposition. Further information on this can be found in this report.
Foreword by the Chairman
of the Executive Board
* Research by the University of Amsterdam (under the supervision of A.H.L. Slangen),
The management in Asia in particular has been strengthened in order to respond more effectively to developments in the Chinese market. Operational reinforcements have also been carried out in various areas, particularly commerce, in order to accelerate international growth.
I would like to express my thanks to all employees for their commitment and the growth achieved during the past financial year.
L. de Vries, President and CEO
MARKET THEMES
TenCate’s main market themes are focused on the safety of people and their surroundings and sustainability/environment. During the past year a great deal of attention was devoted to the fact that a substantial part of TenCate’s revenues are linked to government budgets. Although such budgets have been under pressure for a long time, considerable growth was nevertheless achieved in 2011. First, safety and protection worldwide remain a strong focus of attention. Tighter budgets mean that solutions will be analysed more critically in the future. The market is becoming increasingly aware of innovative solutions which save costs and/or are more sustainable than traditional methods. TenCate’s focus on technology-driven solutions offers added value. In developing economies in particular, there is a notable trend towards giving preference to new technologies and/or materials. An acceleration is taking place in the launch of new products and systems (fast pull). TenCate is an innovative company. Around one-quarter of TenCate’s revenues are generated from products introduced within the previous three years. In the future too, TenCate has great potential in terms of new or recently developed products and promising opportunities which can ultimately offset the possible effects of tighter government budgets. Innovation and the continuous process of renewal are constantly throwing up new challenges in attractive markets. That makes TenCate a unique company.
PEOPLE
‘People make a difference’ is the internal version of the TenCate creed applied in the company’s human resources policy. The management development and succession policy was closely scrutinised in 2011. The associated policy implementation will be tightened up during the coming year, with a greater degree of rotation among organisational units in order to make optimum use of TenCate’s strength. Good knowledge of the management of the whole company and of its internal capabilities will make it possible to react rapidly to market opportunities and mobilise internal knowledge.
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SHARE LISTING
The TenCate share is listed on NYSE Euronext Amsterdam and forms part of the AMX index. The share is actively followed by the leading banks and securities houses operating in Dutch / European small- and midcap stocks.
TenCate stock options were reintroduced in 2011 after a number of years’ absence.
As at 31 December 2011, 25,928,914 ordinary TenCate shares were in issue, each of a par value of € 2.50. The closing price of the share was € 21.26.
The average daily trading volume on NYSE Euronext rose from 58,406 to 74,132 shares. The trading volume on the alternative trading platforms also increased.
INVESTOR RELATIONS POLICY AND COMMUNICATION
Although TenCate’s performance led to a clear improvement compared to 2010, the share price fell particularly in the second half of the year. Apart from the general stock market climate, the TenCate share was affected by the assumed effect of the expected cuts in US government budgets in particular. TenCate gave a series of presentations in order to communicate transparently on this subject and place it in a broader perspective.
Various roadshows were held in the Netherlands and abroad during the reporting year (including in the United States of America, the United Kingdom, France and Germany), strengthening the dialogue with shareholders, analysts and other parties interested in TenCate. The annual meeting provided an excellent platform for a lively dialogue
with numerous interest organisations, including the Dutch Investors’ Association (VEB) and the Dutch Association of Investors for Sustainable Development (VBDO).
The communication with the various stakeholders through TenCate’s updated txtures magazine is greatly appreciated. The magazine covers topical subjects, provides background information on TenCate’s activities around the world and provides links to the various TenCate websites. The increase in communication aimed at business markets also attracted a growing number of visitors to the TenCate websites.
DIVIDEND POLICY AND PROPOSED DIVIDEND
TenCate aims to achieve further growth in its core markets and for many years has been pursuing its buy & build strategy whereby growth is achieved through complementary acquisitions.
A constant line of conduct is maintained with the distribution percentage based on approximately 40% of net profit. TenCate applies the principle of optional dividend.
In respect of the 2011 financial year it is proposed to set the dividend at € 0.95 per € 2.50 par value share, payable at shareholders’ discretion in shares as a charge to the share premium reserve or in cash.
The TenCate share
JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC 34 32 30 28 26 24 22 20 18 16 14 Source NYSE Euronext
ISIN code NL 0000375731 Reuters code NTCN.AS Bloomberg code KTC.NA
◾ KTC
◾ AEX
◾ AMX
OPTION PLAN, SHAREHOLDINGS OF PERSONNEL
AND EXECUTIVE BOARD
Details of the option plan and shareholdings of managers and members of the Executive Board can be found on page 128 of this annual report. The shares repurchased by the company relate to the hedging of granted options.
Important dates in 2012
Publication of 2011 full-year figures 29 February
Annual General Meeting of Shareholders 19 April
Ex-dividend date 23 April
Record date: determination of dividend entitlements 25 April Option period for cash or stock dividend 26 April to 14 May Publication of trading update for first quarter of 2012 27 April Payment of dividend / delivery of shares (stock) 16 May
Publication of half-year figures 2012 27 July
Publication of trading update for third-quarter of 2012 26 October
Number of shares in issue
Number of shares in issue on 31 December 2010 25,501,907 Increase in share capital as a result of stock dividend 427,007 Number of shares in issue on 31 December 2011 25,928,914
Changes in the number of shares in issue 2011 2010
Par value € 2.50 € 2.50
Lowest price € 18.75 € 17.30
Highest price € 32.02 € 28.83
Closing price € 21.26 € 28.00
Earnings per share € 2.31 € 1.84
Dividend per share € 0.95 € 0.75
DISCLOSURE OF MAJOR HOLDINGS
IN LISTED COMPANIES ACT
The register maintained by the Netherlands Authority for the Financial Markets (AFM) in connection with the disclosure of major holdings in listed companies contains details of the following investors with interests of over 5% (source: AFM). It is almost unchanged in comparison with the previous year.
Name Date of disclosure Percentage
Delta Lloyd N.V. 6 May 2011 5.67%
Kempen Oranje Participaties N.V. 1 January 2010 6.34%
Ameriprise Financial Inc 1 May 2010 7.69%
Schroders plc 27 October 2009 8.25%
Delta Lloyd Deelnemingen Fonds N.V. 22 June 2010 10.16% Approximately two-thirds of the shares in issue are held by
institutional investors who hold substantial shareholdings for relatively long periods (value/growth investors). In the geographical distribution a shift can be seen to predominantly Dutch investors. This is not a deliberate policy, but the result of an overall reduction in interest among Anglo-Saxon investors in European stocks, partly as a result of currency developments. ◾ Belgium ◾ France ◾ Germany / Switzerland ◾ Netherlands ◾ Scandinavia ◾ United Kingdom ◾ United States 4% 2% 23% 9% 7% 50% 5%
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Connected by the value proposition
VALUE CHAIN MANAGEMENT AND VALUE PROPOSITION
TenCate applies the value chain management business model. This determines how TenCate – based on its position in the value chain – creates value, establishes value in products and systems and adds value to customer-focused system solutions. The end-user is central in this process. When a product is developed into a system solution, end-user marketing becomes increasingly important.
It is necessary to offer end-users recognisable added value in order to occupy a sustained, strong competitive position in the production and marketing chain. This value proposition is a set of ‘promises’ which the company must fulfil in order to solve a problem faced by a customer or group of customers. The added value of a product or system is usually based on end-users’ existing or evolving requirements resulting from legislation and/or regulations. The end-user translates the value proposition into tangible advantages, such as price-performance ratios, delivery reliability and the ability to meet individual requirements.
TenCate’s main target groups are government bodies, other authorities and representatives of customer groups which determine
specifications for protective materials. It is important to have an input into the setting or amendment of standards and regulations. It is also possible to anticipate requirements such as recycling, CO2 reduction and cost limitation in processes within the rest of the production and marketing chain.
MASS CUSTOMISATION
An important new market trend is mass customisation, i.e. providing customised products and services to meet the wishes and
requirements of individual users. In the European market in particular there are non-uniform regulations and standards. Products have to be adapted to local requirements. There are also significant differences between, for example, product requirements in the United States and those of the rest of the world. As a global player, TenCate is ideally placed to meet this need. There will even be a growing requirement for individualised products. The developments in the field of inkjet technology are a response to this trend, while economies of scale are being maintained. This new technological development is an important part of TenCate’s future value proposition.
SOLUTION PROVIDER
Major value drivers at present are price/cost reduction, environmental factors, individualisation, reliability of the solution and the potential for cost savings. Integrated solutions are increasingly being offered, involving forms of co-operation or co-creation in the value chain. The TenCate Defender™ M product concept is a clear example of co-creation, attractive price-performance ratios and the provision of a reliable solution.
MARKET TRENDS AND MARKET SELECTION
TenCate develops and produces functional materials which have to meet specified rules, standards and customer specifications. TenCate focuses particularly on markets governed by standards on safety and protection of people and their environment. Sustainability and environmental standards are becoming increasingly important and numerous. TenCate is responding expressly to this trend by intensifying its CSR policy.
The technology component is the connecting factor across the company that underpins the selection of markets in which TenCate can occupy distinctive positions.
PRODUCT CHAMPIONS
The structural focus on added value, both within the production and marketing chain and in customer-focused solutions, will lead to a gradual rise in margins. The aim of this is to create product champions. These systems/solutions have the lowest costs in a particular market segment and offer the highest-quality solution. If the market attributes a great deal of value to a value proposition and the product also has a relatively low-cost structure or generates cost advantages for users, the precondition for a product champion is fulfilled.
