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ADVANCED
TEXTILES & COMPOSITES
SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions
for industry, services, fi refi ghting and defence
■ TenCate Protective Fabrics Americas
■ TenCate Protective Fabrics EMEA
■ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications,
such as the camping and sun awning market
■ 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
GEOSYNTHETICS
& GRASS SECTOR
GEOSYNTHETICS Synthetic fabrics, non-wovens and grids for solutions
and applications in infrastructure, civil engineering,
water management, the environmental sector,
agriculture and horticulture
■ TenCate Geosynthetics Americas
■ TenCate Geosynthetics EMEA
■ TenCate Geosynthetics Asia
GRASS Synthetic turf components and integrated synthetic
turf systems for top-fl ight sports, recreation and
landscaping
Upstream
■ TenCate Grass Americas
■ TenCate Grass EMEA
■ TenCate Grass Asia
Downstream
■ Edel Grass (50%)
■ GreenFields (90%)
■ TigerTurf (80%)
■ Hellas Construction (30%)
OTHER ACTIVITIES
SECTOR
INKJET TECHNOLOGY Digital 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
HOLDING & SERVICES Holding company activities
■ Koninklijke Ten Cate nv
Commercial overviewAs at 1 January 2013
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries (operating
companies) which co-operate in research & development, production, end-user marketing and sales.
A detailed list of all subsidiaries, associated companies and other interests (legal entities) can be found on the
inside back cover.
Royal Ten Cate Stationsstraat 11P.O. Box 587600 GD Almelo, The Netherlands
Telephone +31 (0)546 544 911Fax +31 (0)546 814 145www.tencate.com
business development & investor relationsF.R. Spaan, director
TenCate would like to hear from you. Please let us know your views by e-mailing ir@tencate.com, stating the market group or offi cer you wish to contact.You can also contact us using the details shown left.
Contact
Text
Royal Ten Cate
Translation
VVH business translations,
Maartensdijk
Design
Frontwise, Utrecht
Realisation
C&F Report Amsterdam B.V.,
Amsterdam
Printing
Lulof Druktechniek B.V.,
Almelo
Photography
Freek van Arkel
Joost van Baars
Marjo Baas
Stephen Barnett
Doug Bergen
Dennis de Beurs
Andreas Burmann
Frans Dekker
Paul Haverkort
Norbert Hekkink
Joel van Houdt
Cpl Ian Houlding
Vincent Jannink
Ton Kuper
Jonathan P. Larsen
Truls J. Lotvebt
Rens van Mierlo
Roelof Pot
Sylvain Ramadier
David Rozing
Robert Schlesinger
Frank Uijlenbroek
Courtesy © Airbus
Courtesy © BAM
Courtesy © Brand X Pictures
Courtesy © KNHB
Courtesy © NASA
Courtesy © Staff Sgt. Marcus J.
Quarterman, U.S. Army
Colophon Royal Ten Cate Annual Report 2012
PROTECTING PEOPLE
Royal Ten C
ate A
nnual Report 2012
ADVANCED
TEXTILES & COMPOSITES
SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions
for industry, services, fi refi ghting and defence
■ TenCate Protective Fabrics Americas
■ TenCate Protective Fabrics EMEA
■ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications,
such as the camping and sun awning market
■ 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
GEOSYNTHETICS
& GRASS SECTOR
GEOSYNTHETICS Synthetic fabrics, non-wovens and grids for solutions
and applications in infrastructure, civil engineering,
water management, the environmental sector,
agriculture and horticulture
■ TenCate Geosynthetics Americas
■ TenCate Geosynthetics EMEA
■ TenCate Geosynthetics Asia
GRASS Synthetic turf components and integrated synthetic
turf systems for top-fl ight sports, recreation and
landscaping
Upstream
■ TenCate Grass Americas
■ TenCate Grass EMEA
■ TenCate Grass Asia
Downstream
■ Edel Grass (50%)
■ GreenFields (90%)
■ TigerTurf (80%)
■ Hellas Construction (30%)
OTHER ACTIVITIES
SECTOR
INKJET TECHNOLOGY Digital 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
HOLDING & SERVICES Holding company activities
■ Koninklijke Ten Cate nv
Commercial overviewAs at 1 January 2013
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries (operating
companies) which co-operate in research & development, production, end-user marketing and sales.
A detailed list of all subsidiaries, associated companies and other interests (legal entities) can be found on the
inside back cover.
Royal Ten Cate Stationsstraat 11P.O. Box 587600 GD Almelo, The Netherlands
Telephone +31 (0)546 544 911Fax +31 (0)546 814 145www.tencate.com
business development & investor relationsF.R. Spaan, director
TenCate would like to hear from you. Please let us know your views by e-mailing ir@tencate.com, stating the market group or offi cer you wish to contact.You can also contact us using the details shown left.
Contact
Text
Royal Ten Cate
Translation
VVH business translations,
Maartensdijk
Design
Frontwise, Utrecht
Realisation
C&F Report Amsterdam B.V.,
Amsterdam
Printing
Lulof Druktechniek B.V.,
Almelo
Photography
Freek van Arkel
Joost van Baars
Marjo Baas
Stephen Barnett
Doug Bergen
Dennis de Beurs
Andreas Burmann
Frans Dekker
Paul Haverkort
Norbert Hekkink
Joel van Houdt
Cpl Ian Houlding
Vincent Jannink
Ton Kuper
Jonathan P. Larsen
Truls J. Lotvebt
Rens van Mierlo
Roelof Pot
Sylvain Ramadier
David Rozing
Robert Schlesinger
Frank Uijlenbroek
Courtesy © Airbus
Courtesy © BAM
Courtesy © Brand X Pictures
Courtesy © KNHB
Courtesy © NASA
Courtesy © Staff Sgt. Marcus J.
Quarterman, U.S. Army
Colophon Royal Ten Cate Annual Report 2012
PROTECTING PEOPLE
Royal Ten C
ate A
nnual Report 2012
Profi leSubsidiaries, associated companies and other interests
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsGroup activities of the TenCate Advanced Textiles group in the Netherlands
Ten Cate Protect bv Nijverdal, NetherlandsTen Cate Protective Fabrics USA inc Union City (Georgia), USATen Cate Protective Fabrics Canada inc Montreal (Quebec), CanadaFabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate - Union Protective Fabrics Asia ltd (50.65%) Bangkok, ThailandFabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, NetherlandsAdvanced composites for the aircraft industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USACCS Composites inc Benicia (California), USAAdvanced composites for aerospace and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaTC3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry,
oil & gas extraction and consumer electronics
TenCate Advanced Armour UK (AML) Swindon, UKDesign and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, FranceTen Cate Advanced Armour Danmark a/s Vissenbjerg, DenmarkAdvanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USAAdvanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) Vissenbjerg, DenmarkActive protection systems for army vehicles
AML India Private ltd (90%) Noida, IndiaDesign and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USATen Cate Geosynthetics Austria GmbH Linz, AustriaTen Cate Geosynthetics France sas Bezons, FranceTen Cate Geosynthetics Netherlands bv Nijverdal, NetherlandsTen Cate Geosynthetics Asia sdn bhd Kuala Lumpur, MalaysiaTenCate Industrial Zhuhai co ltd Zhuhai, ChinaGeosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, MalaysiaTen Cate Geosynthetics (Thailand) ltd Bangkok, ThailandTen Cate Geosynthetics pte ltd SingaporeTen Cate Geosynthetics Italia srl Lazzata, ItalyTen Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics sl Madrid, SpainTen Cate Geosynthetics Schweiz AG Zurich, SwitzerlandTen Cate Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Polska Spzoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Rumania Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsTen Cate Thiolon USA inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1 Dubai, UAESynthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, NetherlandsBacking for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, NetherlandsGreenFields BV Genemuiden, Netherlands(subsidiary of GreenFields Holding BV)
Xtra Grass BV * Kampen, Netherlands
ProCourt Int BV * Zederik, Netherlands
GreenFields Eastern Europe BV * Genemuiden, Netherlands
GreenFields Noo (Bresco) AS * Molde, Norway
GreenFields Swiss AG * Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) * Nicosia, Cyprus
GreenFields West Africa SARL (65%) * Cotonou, Benin
GreenFields UK Sports Surfaces Ltd * Bolton, UK
GreenFields India FZC (51%) * Sharjah, UAE GreenFields Golf & Leisure BV Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New ZealandTigerTurf Australia pty ltd (80%) Campbellfi eld, AustraliaTigerTurf (UK) ltd (80%) Hartlebury, UKTiger Sports Americas inc (80%) Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
* Subsidiary of GreenFields BV1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
The operating companies listed here are consolidated in the fi nancial 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.
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Xennia Holland bv Nijverdal, NetherlandsSpecialist inkjet technology for industrial applications
Ten Cate Enbi International bv Brunssum, NetherlandsTenCate Enbi group holding company
Ten Cate Enbi GmbH Leverkusen, GermanyTen Cate Enbi kft Rétság, HungaryTen Cate Enbi inc Shelbyville (Indiana), USATen Cate Enbi inc Rochester (New York), USATen Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, ChinaTechnical rollers and components for printers, copiers, fax machines, postal sorting
machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, NetherlandsInsurance
Ten Cate Nederland bv Almelo, NetherlandsRoyal Ten Cate USA inc Atlanta (Georgia), USATen Cate USA inc Washington D.C., USATen Cate UK ltd London, UKTen Cate France sas Paris, FranceTen Cate Deutschland GmbH Opladen, GermanyTen Cate Danmark a/s Copenhagen, DenmarkRoyal Ten Cate Pacifi c ltd Hong Kong, ChinaRoyal Ten Cate China Holding ltd Hong Kong, ChinaCountry holding companies
Ten Cate Finance AG Schaffhausen, SwitzerlandFinancing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, NetherlandsMarketing and production organisation for synthetic turf for landscaping use
Hellas Construction Inc (30%) Austin (Texas), USAProduction and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UKMarketing and installation of synthetic turf systems
as at 31 December 2012
Worldwide trends
Safety Sustainability
Market themes
Personal protection Defence Mobility Infrastructure Water managementSport and recreation
Materials for protection of persons in their working and living
environments
Materials for protection of military personnel; vehicle, vessel and
aircraft armour
Composites for vehicles, vessels, aircraft and
mobility concepts
Geotextiles for infrastructure works;
synthetic turf for landscaping
Geotextiles and systems (TenCate Geotube®) for maritime projects and
dewatering
Synthetic turf for sport; outdoor fabrics
PROTECTING PEOPLE
TenCate focuses on the growing demand for protection of people and their working and living environments. TenCate occupies a unique technology position at the interface of chemicals and textile technology, enabling the company to develop materials, modules and systems that are an optimum match for specifi c market demands, usually involving strict functional requirements.
VISION TenCate is a company specialising in materials engineering. By combining technologies it is possible to produce new materials, and these developments also generate new markets and growth for the company. TenCate increasingly offers total solutions, independently or in co-operation with partners.
MATERIAL TECHNOLOGY AND
INNOVATION
Professionals across a wide range of fi elds deserve the best protection in their specifi c working environment. New demands are also being made on protection solutions to meet sustainability requirements. TenCate constantly develops materials, modules and systems which do precisely what is required of them. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system.
MISSION One of TenCate’s main driving forces is the achievement of progress through innovative material solutions. TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of working and living environments.
TECHNICAL
TEXTILES
TenCate is the world market leader in technical textiles. These materials have specifi c characteristics which are usually defi ned and qualifi ed on the basis of functional specifi cations. TenCate maintains an active portfolio policy and with its advanced technological base – partly resulting from acquisitions – is able to offer the widest range of functionalities in materials. It does this independently or in co-operation with third parties.
TenCate’s materials are used in particular for: ■ Personal safety and protection of working
and living environments ■ Modernisation of army, fi refi ghting
and police equipment ■ Aerospace ■ Water management, infrastructure
and environmental solutions ■ Industrial applications
STRATEGY The strategy over the past decade has been based on value-chain management. The cornerstones of this policy are
■ end-user marketing ■ technological innovation ■ cost leadership and ■ product differentiation
The use of network structures with partners in the value chain adds a new dimension to this business model. The aim of this is to increase access to markets and strengthen the competitive position.
The result of the buy & build strategy is that existing market positions are strengthened and new market positions (product-market-technology combinations) are gradually built up, particularly through technology-oriented acquisitions.
The fi x it / exit strategy remains in place, although in the past most non- textile-oriented businesses were divested. TenCate maintains an active portfolio policy, as part of which it continuously assesses whether business units still fi t in with its value-chain model.
TenCate
Royal Ten Cate (TenCate) is a multinational company which combines
textile technology with chemical process technology in the development
and production of functional materials (technical textiles). The Group’s
technological base determines the high-grade applications (product-
market-technology combinations) which TenCate supplies in selected
niche markets.
Value-chain management
TenCate’s business model is based on the pursuit of optimum positioning
in the value chain by means of value-chain management. To that end,
actions and objectives are defi ned in four areas: end-user marketing,
technology-driven innovation and cost leadership combined with active
portfolio management (product differentiation).
Worldwide trends
The connecting factor within TenCate is the development and production
of materials, modules and systems which usually meet demands arising
from safety or protection requirements or positively impact environmental
requirements or standards. Such requirements are usually prescribed by
governments and enacted in legislation. Standards are often laid down at
product level which materials must fulfi l in terms of their function,
composition and/or quality characteristics.
Risks of accidents, injury, damage and environmental disasters must be
prevented to the maximum extent possible. Safety and protection of
persons and their working and living environments are worldwide growth
markets.
Market themes
TenCate operates principally within six market themes which have been
derived from the worldwide trends of safety and sustainability identifi ed
for the company. The materials developed on the basis of these themes
meet specifi c requirements that arise within these niche markets.
Organisational structure
TenCate’s organisational structure is based on the various production
technologies developed within the company. The organisation is divided
into two sectors: Advanced Textiles & Composites (spinning, weaving,
coating, fabric impregnation and laminate pressing) and Geosynthetics
& Grass (extrusion of synthetic fi bres such as PP and PE, weaving and
non-woven technology).
Main products of the Advanced Textiles
& Composites sector
■ Flame- and heat-resistant materials for army uniforms
(Ten Cate Defender™ M)
■ Safety materials for professional wear
■ Prepregs for the production of thermohardened and thermoplastic
composites
■ Composite laminates
■ Armour materials and systems for army and other vehicles
Main products of the Geosynthetics & Grass sector
■ Woven materials and non-wovens for infrastructure works,
construction and civil engineering
■ TenCate Geotube® systems for the dewatering of industrial and
other sludge, environmental projects, dyke construction and other
civil engineering works
■ Synthetic turf yarns
■ Synthetic turf systems
Royal Ten Cate
Profi leSubsidiaries, associated companies and other interests
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsGroup activities of the TenCate Advanced Textiles group in the Netherlands
Ten Cate Protect bv Nijverdal, NetherlandsTen Cate Protective Fabrics USA inc Union City (Georgia), USATen Cate Protective Fabrics Canada inc Montreal (Quebec), CanadaFabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate - Union Protective Fabrics Asia ltd (50.65%) Bangkok, ThailandFabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, NetherlandsAdvanced composites for the aircraft industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USACCS Composites inc Benicia (California), USAAdvanced composites for aerospace and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaTC3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry,
oil & gas extraction and consumer electronics
TenCate Advanced Armour UK (AML) Swindon, UKDesign and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, FranceTen Cate Advanced Armour Danmark a/s Vissenbjerg, DenmarkAdvanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USAAdvanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) Vissenbjerg, DenmarkActive protection systems for army vehicles
AML India Private ltd (90%) Noida, IndiaDesign and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USATen Cate Geosynthetics Austria GmbH Linz, AustriaTen Cate Geosynthetics France sas Bezons, FranceTen Cate Geosynthetics Netherlands bv Nijverdal, NetherlandsTen Cate Geosynthetics Asia sdn bhd Kuala Lumpur, MalaysiaTenCate Industrial Zhuhai co ltd Zhuhai, ChinaGeosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, MalaysiaTen Cate Geosynthetics (Thailand) ltd Bangkok, ThailandTen Cate Geosynthetics pte ltd SingaporeTen Cate Geosynthetics Italia srl Lazzata, ItalyTen Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics sl Madrid, SpainTen Cate Geosynthetics Schweiz AG Zurich, SwitzerlandTen Cate Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Polska Spzoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Rumania Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsTen Cate Thiolon USA inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1 Dubai, UAESynthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, NetherlandsBacking for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, NetherlandsGreenFields BV Genemuiden, Netherlands(subsidiary of GreenFields Holding BV)
Xtra Grass BV * Kampen, Netherlands
ProCourt Int BV * Zederik, Netherlands
GreenFields Eastern Europe BV * Genemuiden, Netherlands
GreenFields Noo (Bresco) AS * Molde, Norway
GreenFields Swiss AG * Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) * Nicosia, Cyprus
GreenFields West Africa SARL (65%) * Cotonou, Benin
GreenFields UK Sports Surfaces Ltd * Bolton, UK
GreenFields India FZC (51%) * Sharjah, UAE GreenFields Golf & Leisure BV Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New ZealandTigerTurf Australia pty ltd (80%) Campbellfi eld, AustraliaTigerTurf (UK) ltd (80%) Hartlebury, UKTiger Sports Americas inc (80%) Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
* Subsidiary of GreenFields BV1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
The operating companies listed here are consolidated in the fi nancial 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.
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Xennia Holland bv Nijverdal, NetherlandsSpecialist inkjet technology for industrial applications
Ten Cate Enbi International bv Brunssum, NetherlandsTenCate Enbi group holding company
Ten Cate Enbi GmbH Leverkusen, GermanyTen Cate Enbi kft Rétság, HungaryTen Cate Enbi inc Shelbyville (Indiana), USATen Cate Enbi inc Rochester (New York), USATen Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, ChinaTechnical rollers and components for printers, copiers, fax machines, postal sorting
machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, NetherlandsInsurance
Ten Cate Nederland bv Almelo, NetherlandsRoyal Ten Cate USA inc Atlanta (Georgia), USATen Cate USA inc Washington D.C., USATen Cate UK ltd London, UKTen Cate France sas Paris, FranceTen Cate Deutschland GmbH Opladen, GermanyTen Cate Danmark a/s Copenhagen, DenmarkRoyal Ten Cate Pacifi c ltd Hong Kong, ChinaRoyal Ten Cate China Holding ltd Hong Kong, ChinaCountry holding companies
Ten Cate Finance AG Schaffhausen, SwitzerlandFinancing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, NetherlandsMarketing and production organisation for synthetic turf for landscaping use
Hellas Construction Inc (30%) Austin (Texas), USAProduction and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UKMarketing and installation of synthetic turf systems
as at 31 December 2012
Worldwide trends
Safety Sustainability
Market themes
Personal protection Defence Mobility Infrastructure Water managementSport and recreation
Materials for protection of persons in their working and living
environments
Materials for protection of military personnel; vehicle, vessel and
aircraft armour
Composites for vehicles, vessels, aircraft and
mobility concepts
Geotextiles for infrastructure works;
synthetic turf for landscaping
Geotextiles and systems (TenCate Geotube®) for maritime projects and
dewatering
Synthetic turf for sport; outdoor fabrics
PROTECTING PEOPLE
TenCate focuses on the growing demand for protection of people and their working and living environments. TenCate occupies a unique technology position at the interface of chemicals and textile technology, enabling the company to develop materials, modules and systems that are an optimum match for specifi c market demands, usually involving strict functional requirements.
VISION TenCate is a company specialising in materials engineering. By combining technologies it is possible to produce new materials, and these developments also generate new markets and growth for the company. TenCate increasingly offers total solutions, independently or in co-operation with partners.
MATERIAL TECHNOLOGY AND
INNOVATION
Professionals across a wide range of fi elds deserve the best protection in their specifi c working environment. New demands are also being made on protection solutions to meet sustainability requirements. TenCate constantly develops materials, modules and systems which do precisely what is required of them. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system.
MISSION One of TenCate’s main driving forces is the achievement of progress through innovative material solutions. TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of working and living environments.
TECHNICAL
TEXTILES
TenCate is the world market leader in technical textiles. These materials have specifi c characteristics which are usually defi ned and qualifi ed on the basis of functional specifi cations. TenCate maintains an active portfolio policy and with its advanced technological base – partly resulting from acquisitions – is able to offer the widest range of functionalities in materials. It does this independently or in co-operation with third parties.
TenCate’s materials are used in particular for: ■ Personal safety and protection of working
and living environments ■ Modernisation of army, fi refi ghting
and police equipment ■ Aerospace ■ Water management, infrastructure
and environmental solutions ■ Industrial applications
STRATEGY The strategy over the past decade has been based on value-chain management. The cornerstones of this policy are
■ end-user marketing ■ technological innovation ■ cost leadership and ■ product differentiation
The use of network structures with partners in the value chain adds a new dimension to this business model. The aim of this is to increase access to markets and strengthen the competitive position.
The result of the buy & build strategy is that existing market positions are strengthened and new market positions (product-market-technology combinations) are gradually built up, particularly through technology-oriented acquisitions.
The fi x it / exit strategy remains in place, although in the past most non- textile-oriented businesses were divested. TenCate maintains an active portfolio policy, as part of which it continuously assesses whether business units still fi t in with its value-chain model.
TenCate
Royal Ten Cate (TenCate) is a multinational company which combines
textile technology with chemical process technology in the development
and production of functional materials (technical textiles). The Group’s
technological base determines the high-grade applications (product-
market-technology combinations) which TenCate supplies in selected
niche markets.
Value-chain management
TenCate’s business model is based on the pursuit of optimum positioning
in the value chain by means of value-chain management. To that end,
actions and objectives are defi ned in four areas: end-user marketing,
technology-driven innovation and cost leadership combined with active
portfolio management (product differentiation).
Worldwide trends
The connecting factor within TenCate is the development and production
of materials, modules and systems which usually meet demands arising
from safety or protection requirements or positively impact environmental
requirements or standards. Such requirements are usually prescribed by
governments and enacted in legislation. Standards are often laid down at
product level which materials must fulfi l in terms of their function,
composition and/or quality characteristics.
Risks of accidents, injury, damage and environmental disasters must be
prevented to the maximum extent possible. Safety and protection of
persons and their working and living environments are worldwide growth
markets.
Market themes
TenCate operates principally within six market themes which have been
derived from the worldwide trends of safety and sustainability identifi ed
for the company. The materials developed on the basis of these themes
meet specifi c requirements that arise within these niche markets.
Organisational structure
TenCate’s organisational structure is based on the various production
technologies developed within the company. The organisation is divided
into two sectors: Advanced Textiles & Composites (spinning, weaving,
coating, fabric impregnation and laminate pressing) and Geosynthetics
& Grass (extrusion of synthetic fi bres such as PP and PE, weaving and
non-woven technology).
Main products of the Advanced Textiles
& Composites sector
■ Flame- and heat-resistant materials for army uniforms
(Ten Cate Defender™ M)
■ Safety materials for professional wear
■ Prepregs for the production of thermohardened and thermoplastic
composites
■ Composite laminates
■ Armour materials and systems for army and other vehicles
Main products of the Geosynthetics & Grass sector
■ Woven materials and non-wovens for infrastructure works,
construction and civil engineering
■ TenCate Geotube® systems for the dewatering of industrial and
other sludge, environmental projects, dyke construction and other
civil engineering works
■ Synthetic turf yarns
■ Synthetic turf systems
Royal Ten Cate
Commercial overview Inside cover
Profi le Inside cover
Key developments and assessment of action plans in 2012 2
Key fi gures 2012 3
The TenCate share 6
Foreword by the Chairman of the Executive Board 10
Business overview 13 Business overview 14 Vision, mission and strategy 15 Strategic goals 17 Indicators 18 Business model and value creation 25 Sectors 29 Corporate information 39
Business context 45 Business environment 46 Overview of stakeholders 47 Materiality matrix 48 SWOT analysis 50 Risk management 52
Governance 55 Executive Board 56 Supervisory Board 57 Report of the Supervisory Board 58 Corporate governance 60
Performance 61 Report of the Executive Board 62 Sector Advanced Textiles & Composites 66 Sector Geosynthetics & Grass 75 Sector Other 82
Outlook 83 Outlook for 2013 84 Action plans for 2013 86 Corporate initiatives 87
Statement by the Executive Board 88
Financial statements 89 2012 fi nancial statements 90 Other information 142 Ten-year summary 144
Glossary 146 Contact 148 List of subsidiaries, associated companies
and other interests Inside cover Colophon Inside cover
Royal Ten Cate
Annual report 2012
An interactive version of this report is available on www.tencateannualreports.com
2 | Royal Ten Cate Annual Report 2012 |
Key developments and assessment of action plans in 2012
Revenues decline by 8% to € 1,049 million
■ The decline in revenues was concentrated particularly in the
US defence market.
■ There was positive revenue growth at TenCate Advanced
Composites (aerospace market), TenCate Grass (downstream)
and TenCate Enbi.
Net profi t of € 22.3 million (2011: € 58.7 million)
■ The decrease in net profi t was due partly to the loss of high-calibre
defence revenues.
■ The normalised net profi t amounted to € 27.6 million.
■ Net total of € 8 million of non-recurring expenses, mainly in the
fourth quarter.
■ The Geosynthetics & Grass sector showed a 20% rise in earnings
(EBITA).
■ The Other Activities sector showed a negative result (EBITA)
of € 3.0 million, due particularly to the loss-making activities
of Xennia Technology.
■ Cash fl ow from operating and investing activities up from
– € 9 million to € 68 million.
■ Interest-bearing debt down by around € 60 million to € 230 million;
debt ratio 2.55 (2011: 2.12).
Sharp decline in revenues in the US defence market
■ Sales to the US Army fell sharply at TenCate Protective Fabrics
and TenCate Advanced Armour.
■ The loss of defence revenues totalled US$130 million.
■ The US Army placed no large orders in the personal and vehicle
armour market.
Decreasing revenue contribution from the Geosynthetics
& Grass sector
■ The geosynthetics activities showed a strong performance in
the fi rst six months of 2012.
■ Pressure on government budgets had an increasingly strong impact
in 2012, particularly on infrastructure projects and the sports market
(particularly in Southern Europe).
Sharper strategic focus and cost savings
■ Decrease of around 350 FTEs since May 2012.
■ In the second half of the year the positive effect of the wage cost
savings amounted to approximately € 7 million.
■ The intensifi cation of the buy & build strategy involved a sharper
focus on composites, particularly for the automotive and other
industrial markets. PMC Baycomp (USA) was acquired in 2012.
Amber Composites (UK) was acquired at the beginning of 2013.
■ The pursuit of greater cooperation with partners in the value chain
led among other things to the signing of partnerships with BASF
(automotive composites) and 3M (tooling).
Growth in revenues from composites outside the aerospace
market
■ Major advances were made in the development of markets outside
the aerospace sector. The revenues generated in this area in 2012
remained limited for the moment. The automotive, tooling
composites and other industrial markets offer TenCate good growth
opportunities.
■ In addition to acquisitions and partnerships, internal developments
helped open up access to new markets.
■ TenCate took the initiative of forming the European Thermoplastic
Automotive Composites consortium (eTAC), which positions itself
as a solutions provider in the automotive market.
Development of the TenCate ABDS™ active blast countermeasure
system
■ A separate project organisation was formed in 2012 for the further
development and market launch.
■ The fi rst revenues are expected in 2013.
Positive results of downstream reorganisations at TenCate Grass
■ The measures taken had a positive impact on the performance
of the downstream organisation.
Embedding of inkjet technology in the TenCate Protective Fabrics
production process
■ A sample printer was installed in the second half of 2012.
■ TenCate took part in the European Eco Innovation project in 2012,
for which it received a grant of approximately € 1.0 million.
The partial switch to clean inkjet technology is starting in early 2013.
CSR agenda
■ TenCate made good progress in visibly demonstrating the
sustainability aspects of its business operations.
0
300
600
900
1,200
20122011201020092008
– 8% € 1,049.0 mln 49%
7%
– 14% € 460.6 mln
Advanced Textiles & Composites
– 1%€ 518.7 mln
Geosynthetics & Grass
– 6%€ 69.7 mln
Other Activities44%
0
30
60
90
120
20122011201020092008
– 49% € 52.0 mln 61%
– 6%
45% + 20%€ 31.5 mln
Geosynthetics & Grass
– 151%– € 3.0 mln
Other Activities
– 67% € 23.5 mln
Advanced Textiles & Composites
0
15
30
45
60
20122011201020092008
– 62% € 22.3 mln
0
1,125
2,250
3,375
4,500
20122011201020092008
+ 2% 4,454
76%
24%
3,385
Male
1,069
Female
0
0.30
0.60
0.90
1.20
20122011201020092008
– 47% 0.50
0
0.60
1.20
1.80
2.40
20122011201020092008
– 63% 0.86
Royal Ten Cate Annual Report 2012 | KEY FIGURES 2012 | 3
(in millions of euros, unless stated otherwise)
Key fi gures 2012
Revenue Revenue by sector
EBITA EBITA by sector
Net result
Employees Staff split-up
Net result per share (in €) Dividend per share (in €)
Geographic breakdown of sales and number of employees at the end 2012
NORTH AMERICA EMEA ASIA
PACIFIC
By destination
By origin
Employees
SOUTH AMERICA
83
1,1281,6961,547
0
3%
13%39%42%
3%2%
10%43%45%
0%
TenCate has its own production site (■) and sales offi ces (■) in the following countries:
Americas
North AmericaUnited States
Canada
South AmericaBrazil
EMEAEuropeCyprus Netherlands
Denmark Austria
Germany Poland
United Kingdom Romania
France Spain
Hungary Czech Republic
Ireland Switzerland
Italy
AfricaBenin
Middle EastDubai
United Arab Emirates
AsiaPacifi c
AsiaChina India
Malaysia Singapore
Thailand South Korea
OceaniaAustralia
New Zealand
4 | Royal Ten Cate Annual Report 2012 | KEY FIGURES 2012
>Key fi gures 2012
Royal Ten Cate Annual Report 2012 | KEY FIGURES 2012 | 5
PROFIT AND LOSS ACCOUNT 2011 2012
Revenues 1,138.8 1,049.0
Operating result before depreciation and amortisation (EBITDA) 137.5 89.1
Operating result before amortisation (EBITA) 102.5 52.0
Normalised operating result before amortisation (EBITA) 102.5 60.0
Operating result before amortisation as % of revenues (EBITA margin) 9.0% 5.0%
Operating result (EBIT) 89.6 37.5
Net result 58.7 22.3
Normalised net result 58.7 27.6
CONSOLIDATED BALANCE SHEET AND RETURN
Net capital employed (year-end) 808.8 750.5
Return (EBITA) on average net capital employed 13.1% 6.4%
Net interest-bearing debt (year-end) 288.7 229.9
CONSOLIDATED CASH FLOW
Cash fl ow from operating activities 49.3 101.8
Cash fl ow from investing activities -57.8 -33.4
Cash fl ow from operating and investing activities -8.5 68.4
DEBT RATIO
Net debt / EBITDA ratio 2.12 2.55
OUTSTANDING SHARES (X 1,000)
Number of outstanding shares at year-end 25,929 26,498
Weighted average number of shares (before dilution) 25,452 25,895
Weighted average number of shares (after dilution) 25,736 26,040
PER-SHARE DATA
Net result 2.31 0.86
Diluted net result 2.28 0.86
Dividend 0.95 0.50
Equity 17.96 17.25
EMPLOYEES
Number of staff years at year-end* 4,353 4,454
– of which in the Netherlands 819 795
* Excluding hired personnel.
6 | Royal Ten Cate Annual Report 2012 | THE TENCATE SHARE
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 mid-cap stocks.
GENERAL INFORMATION
The share price fell in 2012. This was due to the unexpectedly steep
fall in demand from the US defence market and the downgrading of
the outlook for 2012 due to the US presidential elections and uncertain
political and economic prospects. The declining interest in defence-
related stocks in the United States had a particularly negative impact
on US investor sentiment.
Selling pressure was particularly evident in the United States, partly
due to lower interest in euro-related stocks. TenCate was able to absorb
this pressure by organising various roadshows in Europe.
In the light of the current challenging market conditions, an intensive
dialogue is being conducted with shareholders to give them a clear
insight into the risks and opportunities. The annual general meeting
of shareholders also provides a good platform for this purpose.
TenCate’s new txtures magazine and the company’s updated website
provide background information and show the connections between
the various strategic themes.
DIVIDEND POLICY AND PROPOSED DIVIDEND
TenCate pursues a balanced dividend policy in which a decrease in
profi t, such as that which occurred in 2012, is refl ected to a somewhat
muted extent in the change in dividend. This situation occurred
previously in the dividend for the 2009 fi nancial year, where a higher
distribution rate was applied on that specifi c occasion. The dividend
policy is based on a distribution rate of 40%. An optional dividend is
usually offered.
Having regard to the current results, it is proposed to distribute a
dividend of 58% on this occasion. The dividend would therefore amount
to € 0.50 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
15
17
19
21
23
25
27
January
The TenCate share
Source: NYSE EURONEXT ISIN code: NL0000375731 Reuters code: NTCN.AS Bloomberg code: KTC.NA
IN E
UR
OS
February March April May June July August September October November December
2012
AScX
AMX
AEX
KTC
Royal Ten Cate Annual Report 2012 | THE TENCATE SHARE | 7
NUMBER OF SHARES IN ISSUE
Number of shares in issue on 31 December 2011 25,928,914
Increase in share capital as a result
of stock dividend 568,752
Number of shares in issue on 31 December 2012 26,497,666
CHANGES IN THE NUMBER
OF SHARES IN ISSUE 2011 2012
Par value € 2.50 € 2.50
Lowest price € 18.75 € 16.66
Highest price € 32.02 € 26.30
Closing price € 21.26 € 19.87
Earnings per share € 2.31 € 0.86
Dividend per share € 0.95 € 0.50
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).
NAME
Date of
disclosure Percentage
Delta Lloyd N.V. 6 May 2011 5.67%
Kempen Oranje Participaties N.V. 1 January 2010 6.34%
Schroders plc 27 October 2009 8.25%
Delta Lloyd Deelnemingen
Fonds N.V. 22 June 2010 10.16%
OPTION PLAN, SHAREHOLDINGS OF PERSONNEL
AND EXECUTIVE BOARD
Details of the option plan and the shareholdings of managers and
members of the Executive Board can be found on page 137 of this
report. The shares repurchased by the company relate to the hedging
of granted options.
GEOGRAPHIC SPREAD OF SHAREHOLDINGS
Netherlands 47%
United States of America 20%
United Kingdom 20%
Scandinavia 5%
Belgium 4%
France 1%
Other countries 3%
IMPORTANT DATES IN 2013
Publication of 2012 full-year fi gures 1 March
Publication of 2012 annual report 7 March
Annual General Meeting of shareholders 18 April
Ex-dividend date 22 April
Record date: determination of dividend entitlements 24 April
Option period for cash or stock dividend 25 April
to 13 May
Publication of trading update for fi rst quarter
of 2013 26 April
Payment of dividend / delivery of shares (stock) 15 May
Publication of 2013 half-year fi gures 26 July
Publication of trading update for third quarter
of 2013 25 October
8 | Royal Ten Cate Annual Report 2012 | PEOPLE PLANET PROFIT
TenCate focuses on the sustainable protection of people and their working and living
environments.
People Planet Profi t
32 million metres of TenCate Defender™ M
since 2007 for US Army and Marine Corps
-8 kilos (-22%) weight of aircraft trolleys thanks to TenCate Cetex® technology
-8°Celsius solar heat on synthetic turf
pitches thanks toTenCate XP Blade™ technology
Royal Ten Cate Annual Report 2012 | PEOPLE PLANET PROFIT | 9
24%of TenCate employees
are female
6 Awards for Highly Protected Risks from FM Global for TenCate
50 yearsTenCate Geotube®
technology for sustainable water management
10 | Royal Ten Cate Annual Report 2012 | FOREWORD BY THE CHAIRMAN OF THE EXECUTIVE BOARD
A new arrangement has been introduced for the content of
TenCate’s 2012 annual report. Aside from the reporting on the
annual fi gures, the principal aim of the new arrangement is to
convey clearly and concisely what the company stands for,
what the connecting factors are and how the Group’s strategy
is implemented. Value creation – the value proposition in key
markets – is a guiding theme.
STAYING STRONG TOGETHER
Two developments have been instigated to secure continued growth
over the longer term, even amid diffi cult market conditions.
First, there is increasing cohesion between the various business units
focusing on TenCate’s worldwide key markets: safety fabrics,
composites, geotextiles and synthetic turf. TenCate’s business model
is based on value chain management. All Group units apply this concept
in their strategic planning. This Group-wide approach, which has now
become a characteristic feature of TenCate, has enabled the company
to secure a number of leading positions in the value chain. This is
refl ected in the relationships with commercial operators, end-users and
suppliers. The company also has a competitive cost base and a planned
approach to innovation and product development (active portfolio
management).
TenCate’s increasing internal coherence as a ‘materials company’, with
the resulting theme of ‘TenCate – Protecting People’, is also having
a positive impact on the company’s positioning in the market.
The growing focus on personal safety and protection and rising
environmental demands, particularly in project tenders, are having
an infl uence on the specifi cations of functional materials and creating
growth opportunities for innovative material solutions.
Second, increasing cooperation is taking place within value chains.
Network structures are giving a new dimension to the concept of value
chain management. Following the earlier chain integration in the
synthetic turf market, TenCate is now also pursuing closer cooperation
with international market operators in other areas to accelerate market
launch times. This also increases problem-solving capabilities by
combining the partners’ complementary knowledge and skills.
The alliances with BASF (automotive composites) and 3M (tooling
composites) are examples of this.
The markets in which TenCate operates are looking for solutions
particularly in the fi eld of safety and protection. The value proposition
can therefore be presented from the perspective of both internal
coherence (combining competences) and cooperation with business
partners. This raises the added value for end-users and will increasingly
lead to the delivery of system solutions.
PERFORMANCE
The overall performance was marked by developments particularly in
the US defence market (protective fabrics and armour materials).
Market conditions were challenging worldwide, but the decrease in
TenCate’s revenues and profi t was concentrated in the US defence
markets. The anticipated decline in demand from the US Army for
TenCate Defender™ M proved to be unexpectedly sharp in the second
quarter of 2012. The US market for vehicle armour and personal ballistic
protection also experienced a substantial decline in demand. Key
reasons were shrinking government budgets and political uncertainty
due to the presidential elections and the ‘fi scal cliff’. Later in the year
the US geosynthetics market also showed a decline in revenues. This
was primarily due to a wait-and-see attitude among local and central
government organisations and is not expected to be permanent.
The forecasts issued for 2012 were largely based on US Army forecasts
of deliveries of TenCate Defender™ M products. The adjustment to the
profi t forecast in mid-2012 was due in particular to the consequences
of the sudden adoption of a wait-and-see stance in the US defence
market. These developments led to larger-than-expected falls in
revenues and profi t in the Advanced Textiles & Composites sector.
The defence market remains important to TenCate in the longer term.
The emphasis will be on the continued development of the defence
market on a more international basis. The US defence market
nevertheless remains dominant in the geographic spread of revenues.
The safety and protection of military personnel and the respective
budget will remain a relatively major focus of attention in the future.
The United States is leading this development.
Partly as a result of restrained government spending, limited progress
was made in the synthetic turf market with the intended improvement
in results in the Grass group. Despite a rise in revenues in the
downstream activities, insuffi cient volume growth was achieved in the
production of synthetic turf yarns. The result was further
Foreword by the Chairman of the Executive Board
Royal Ten Cate Annual Report 2012 | FOREWORD BY THE CHAIRMAN OF THE EXECUTIVE BOARD | 11
underutilisation of production capacity. In 2012 there was a good
performance by geotextile activities, particularly in the fi rst half of the
year. The operating income (EBIT) of the Geosynthetics & Grass sector
as a whole rose by approximately 20%.
GROWTH MARKETS
Despite the lower profi t, TenCate continued to focus on innovation and
market development. More than half of the investments in 2012 were
related to innovations. TenCate is concentrating on a number of
submarkets with a view to achieving above-average growth.
The Group’s growth potential will consequently increase and broaden
in the years ahead. Good progress was made in this regard in 2012:
■ It was reported during the year that the fi rst revenues from the
TenCate ABDS™ active blast countermeasure system were expected
in 2013. The development work has reached an important phase,
involving close co-operation with the US defence authorities and
testing centres.
■ The aerospace composites businesses developed positively.
■ Work began on the development of activities in the fi eld of
automotive composites (acquisition of PMC Baycomp, qualifi cation
of thermoplastic composites for a world-leading OEM,
announcement of the acquisition of Amber Composites at the
beginning of 2013).
■ Favourable developments in the fi eld of safety fabrics for oil and
gas extraction and processing industries. TenCate has a promising
product portfolio, which resulted in attractive orders from
customers, including leading oil companies.
■ Environmental market, water management and infrastructure
projects: TenCate Geosynthetics demonstrated the benefi ts of
TenCate Geotube® systems worldwide.
SUSTAINABILITY
Major advances were made in the fi eld of sustainability in 2012.
The operating companies’ management teams have been receiving
support from the corporate CSR team since 2011. In 2012, the Dutch
TenCate businesses implemented the CSR Performance Ladder, which
enables clearer and more extensive reporting on social, ecological and
economic performance. Good progress was also made with determining
the CO2 footprint. TenCate will fi nally be able to give a quantitative
assessment of the worldwide results of its sustainability policy.
EMPLOYEES
The pressure on government expenditure led to postponements and
delays in projects, resulting in potentially major swings in revenues.
This demands a fl exible organisation and fl exibility among employees.
It was not possible to avoid a reduction of 350 FTEs in the worldwide
workforce. Cost reduction and increased effi ciency were high priorities
in 2012. The Group’s marketing and sales have been strengthened and
this process is continuing in 2013, partly having regard to future growth
ambitions.
I would like to thank all employees for their commitment during the past
year.
L. de Vries, President and CEO
12 | Royal Ten Cate Annual Report 2012 | FOREWORD BY THE CHAIRMAN OF THE EXECUTIVE BOARD
>‘TenCate has been a tremendous asset for Lockheed
Martin Composites in Denver, Colorado. We are grateful
for their effort and involvement in qualifying new lower
cost prepregs and fi lm adhesives to maintain a competitive
edge in the aerospace industry.’
- Nick Courtney, Production Engineer, Composites
Development Shop, Lockheed Martin
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 13
Business overview 14
Vision, mission and strategy 15
Strategic objectives 17
Indicators 18
Business model and value creation 25
Sectors 29
Corporate information 39
BUSINESS OVERVIEWBusiness Overview contains a more detailed account of why TenCate does what it does (Why), how it does it (How) and what it does (What)
14 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
The theme of ‘Protecting People’ fl ows from the motives that drive the
organisation in connection with the worldwide trends of safety and
sustainability. TenCate’s business model, based on value chain
management, provides the strategic framework.
In view of the economic and fi nancial situation in many core markets,
greater priority is being attributed to certain cornerstones (see page 25)
of TenCate’s business model. In 2012 the particular emphasis was on
cost control and greater focus was applied across the entire product
portfolio. The cost savings announced in 2012 were aimed at generating
a profi t recovery of approximately € 25 million on unchanged revenues
on an annual basis.
Greater attention was devoted to expanding the (geographic) market
for the products developed in the recent past. These measures will be
continued in 2013. In the niche markets in which TenCate is as yet
unrepresented or relatively underrepresented, work began on allocating
more personnel capacity, in both the quantitative and qualitative
senses, to the objective of growth. Examples of these niche markets
are automotive composites, tooling composites, infrastructure and the
environment (geosystems), niche markets for safety fabrics (TenCate
Defender™ M, TenCate Tecasafe™ Plus), the interior market with
aerospace composites and the synthetic turf project market.
Competition in the synthetic turf market is shifting towards systems,
and developments within TenCate are increasingly at the level of
end-solutions.
In an increasing number of markets TenCate witnessed the growing
importance of communication with end-users on the value proposition.
Although TenCate is not a business-to-consumer company, new media
have an increasingly important role in informing end-consumers.
End-user marketing is making heavier demands on the marketing
capacities of the entire company.
Business overview
Protecting people
Nowadays it is increasingly true that prevention is better than cure.
We live in a risk society. The risks relate in particular to safety and
sustainability. But that does not mean the potential consequences
of these often inherent risks must be accepted as simply inevitable.
TenCate’s mission is to provide ever-better protection for people
and their working and living environments. TenCate’s researchers
and developers therefore work continuously to optimise the
characteristics and properties of the supplied materials, modules
and systems, such as wearing comfort, an appropriate price-quality
ratio and combinations with other risk factors (multi-risk exposure).
There is a focus on large, often institutional customers which
usually need to equip a large organisation with TenCate materials.
In addition to the required core functionalities, aspects such as
delivery reliability, total cost of ownership, life-cycle costs,
environmental effects and customisation are also important factors.
TenCate materials have delivered on their promise under extreme
conditions in a wide range of uses, from Mars landings to fi re
extinguishing. Unexpected events sometimes turn into life-saving
experiences thanks to TenCate materials: materials that make a
difference.
SAFETY SUSTAINABILITY
HIGH END SPECIFICATIONS
TEXTILE TECHNOLOGYBASED MATERIALS
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 15
VISION
TenCate’s vision is based on the development (‘buy & build’) of an
extensive and progressive technological base. As a company in the
technical textile sector, TenCate’s worldwide technology position
(including patents) has unparalleled breadth and innovative capacity.
That enables the company to develop materials that optimally cater to
the individual market requirements in the chosen market themes of
safety and protection of man and the environment.
DEVELOPED MARKETS VERSUS EMERGING MARKETS
The market vision is based an ever-increasing focus on control of safety
risks, leading to ever-higher specifi cations and standards for materials.
It is also increasingly important to offer sustainable solutions providing
a wide range of benefi ts for both end-users and institutional customers.
The control of safety risks is a current focus of attention in the
American and European markets. An illustrative recent example is
Hurricane Sandy, which struck the east coast of the United States in
2012. This coast was already partly protected by TenCate Geotube®
containers (‘dune dikes’).
In emerging markets there is a clear trend towards the development of
protection and environmental management standards involving the
latest technologies.
MISSION
TenCate strives for leadership in growing market niches for specialist,
functional materials. To this end the company uses its broad
technological basis, internal specialist skills and strong position in the
value chain. In markets that make high demands in terms of
functionality, TenCate offers high-grade solutions. The aim is to
contribute to progress in the sectors in which TenCate operates.
The added value for its customers leads to a higher rating of the
materials and profi table growth for the company. This also creates value
for shareholders. TenCate aims to create value for its stakeholders in a
sustainable and cyclical way. The company’s corporate values provide
comprehensive support in the pursuit of this objective (see page 28).
Developing the right product portfolio (product differentiation) tailored
to specifi c market requirements, drawing attention to solutions in an
effective way and incorporating the control of safety risks in
specifi cations are key parts of the way in which TenCate fulfi ls its
mission.
The quest for solutions to protect people in their living and working
environments is the connecting factor within TenCate’s mission.
TenCate employees endeavour to make a difference every day with
TenCate materials, materials that can turn unintended events into a
life-saving experience. ‘Protecting people’ with ‘materials that make a
difference’.
Vision, mission and strategy
DURING LEISURE IN TRANSIT
AT WORK
IN HABITATS
PROTECTING PEOPLE
16 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Vision, mission and strategy
STRATEGY
GENERAL INFORMATION
TenCate’s strategy is based on the concept of value chain management,
as set out on page 26. TenCate works intensively to safeguard its
position as a developer and producer of materials within the chain.
Forward or backward integration has a direct impact on the company's
positioning and immediately infl uences the competitive position and
relationships with direct customers.
TenCate focuses primarily on markets which make high functional
demands on products. To this end the company applies a market focus
based on leading themes which infl uence demand from niche markets.
These are markets in which the company can build up a certain lead on
the basis of its strong technological orientation and the material used
can deliver added value for the system of which it forms part.
SHARPER STRATEGIC FOCUS
TenCate is engaged in attractive developments for the future.
The strategic focus has nevertheless been enhanced, partly as a result
of the new challenges offered by the markets. Although TenCate’s
market expectations are positive for the longer term, priority has been
given to growth in the short and medium term.
Traditional markets appear to remain under pressure in 2013. For that
reason greater effort is being directed towards growth in new markets
on the basis of existing products and technologies. Alliances have been
entered into with international partners in order to accelerate access
to markets. Internal measures have also been taken to achieve
revenue growth in new and existing niche markets. A number of these
developments are expected to bear fruit from 2014.
A strict fi nancial policy was again prioritised in 2012. Despite the
decrease in profi tability, the debt ratio (net debt / EBITDA) was close
to TenCate’s target. The debt ratio at the end of 2012 was 2.55.
Investments were made and expenditure was incurred in new
technologies, such as digital inkjet technology, in 2012 and the
preceding years. There was a greater focus on sales and results in
2012. Certain developments with uncertain and/or long payback
times were discontinued or postponed.
Market implementation and the development of a sustainably profi table
business model also have priority with regard to the TenCate ABDS™
active blast countermeasure system, the fi rst results of which are
expected in 2013.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 17
QUALITATIVE STRATEGIC GOALS
■ Creation of shareholder value through profi table growth based on
knowledge, skills and internal synergy. This takes account of social
responsibilities, from an economic, ecological and social
perspective.
■ Achievement of critical mass in product-market-technology
combinations by occupying leading positions in worldwide market
niches.
■ Achievement of a healthy fi nancial position with suffi cient strength
for acquisitions.
■ Management of a balanced portfolio of activities, in which product-
market-technology combinations differ in terms of growth
opportunities and risk profi le.
■ 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.
FINANCIAL STRATEGIC OBJECTIVES
■ The net capital employed must generate a suffi cient return.
The operating result before amortisation as a percentage of average
net capital employed must be at least 15%.
■ The fi nancial position must be suffi ciently 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 profi t growth is based on EBITA (operating
result before amortisation). To this end, the buy & build strategy will
be pursued. Higher added value and effi ciency are also necessary,
since the organic growth of the core activities is expected to
average less than 10%.
■ An appropriate profi t margin must be achieved. The consolidated
EBITA margin must rise to at least 10%.
Strategic goals
18 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
Indicators are the factors and aspects of operational management
which affect the performance and hence the value of the company.
TenCate draws a distinction between general and specifi c indicators.
These are summarised as key performance indicators (KPIs).
TenCate does not communicate externally on all KPIs. The KPI approach
is nevertheless used for internal testing of the value proposition in the
value chain management business model. Brief details of a number of
key indicators are provided below.
GENERAL INDICATORS
A number of indicators are periodically tested on the basis of the
cornerstones of TenCate’s business model, including:
END-USER MARKETING
Every new product which TenCate develops must be linked to prevailing
customer demand or new national or international standards, laws and
regulations. The specifi cations are agreed or developed at an early
stage with the customer and / or end-user. Customer demand can be
met on a targeted basis thanks to the acquired expertise and
technological base. The ability to anticipate changing specifi cations is
an important competitive advantage. Ever-higher standards can be
attained by exerting wide-ranging infl uence on decision-making units in
end-markets with regard to standardisation. This also has the positive
effect that customers and prospects look to TenCate to fulfi l new
demands and requirements. Market potential is key to the solutions
which TenCate supplies.
The following are important indicators:
■ Customer satisfaction
■ Market share
■ Sale volume
■ Customer retention (share of wallet)
■ Number of complaints and complaint handling
■ Brand recognition and image
In a number of cases, TenCate operates through its customers, such as
tenders. The image, reputation et cetera can therefore sometimes only
be measured indirectly in the end markets. End-user marketing has
among other the objective to make the contribution of TenCate and its
value for end customers more visible.
TECHNOLOGICAL INNOVATION
TenCate is a technology-driven company. Innovation also includes
development costs associated with the entire approval process
(specifi cations and qualifi cations of materials). These costs are not
usually reported separately. Acquisitions with a technological
background also form part of the innovation process. TenCate
conducts an active intellectual property policy and now has more
than 650 patents. The main indicators are the following:
■ Number of patents
■ Number of trademark registrations and countries of registration
■ Completion of process innovation projects
■ Creation of new standards in niche markets
COST LEADERSHIP
The materials which TenCate develops are usually produced internally.
The company focuses its production resources on both specialties and
volume products. That compels the company to remain very alert to
costs, but also to cost-effi cient production, margin policy, process
optimisation, organisation of logistics fl ows, reduced environmental
costs, etc. At the same time it requires the maintenance of a balanced
product portfolio with expansion products, exploitation products and
elimination products.
The main indicators are the following:
■ Production
■ Costs per unit/hour
■ Turnaround time in days
■ First-time-right (FTR) percentage
■ Use of resources (raw materials, water, energy)
■ Number of defects
■ Downtime
■ Rejects and waste
■ CO2 emissions
■ Storage-inventory-delivery
■ Inventory level
■ Inventory turnover rate
■ Percentage of products delivered on time
■ Percentage of products delivered correctly
■ Human resources
■ Personnel costs
■ Turnover
■ Absenteeism
Indicators
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 19
PRODUCT DIFFERENTIATION
Because product life cycles are becoming ever shorter, TenCate has to
bring a steady fl ow of new products and solutions to the market. In
practice, an expansion product ultimately becomes a commodity.
Aspects such as high quality, unique characteristics, distinctive
capability, low price and a large market share will sooner or later fade.
TenCate is guided by evolving markets in which demands are ever
higher, laws change and standards become more exacting. TenCate
adapts characteristics or incorporates them in materials in order to
create customer-specifi c products and specialties.
The main indicators are the following:
■ Number of new product-market-technology combinations
■ Quantitative and qualitative portfolio growth
■ Net present value (NPV) of the product portfolio
SPECIFIC INDICATORS (CSR)
Key performance indicators (KPIs) were determined at a corporate level
at the beginning of 2012. These KPIs clearly state what TenCate stands
for worldwide with regard to the social, ecological and economic
aspects of corporate social responsibility.
With the aid of these indicators, a worldwide trial measurement was
conducted across all market groups in mid-2012 concerning the position
in 2011. The data for 2011 and 2012 were then gathered, analysed,
aggregated and validated at corporate level using a data management
system. This section gives an account of the KPIs values particularly
with regard to the 2012 reporting year, because these comply with
TenCate’s accuracy criteria. Data for 2011 have been included where
possible. In the forthcoming year, the quality of the data and the
relevant processes will be improved. The business units in the
downstream activities and the activities of TenCate Enbi and Xennia
Technology are not included in the trial measurement. Figures 1 and 2
relate to data for the TenCate group as a whole.
TenCate sees 2011 and 2012 as base years, the data for which will
be used to defi ne the detailed ambitions and objectives and establish
programmes. Subsequent reports will include a further analysis of
the performance.
1 BREAKDOWN OF EMPLOYEES BY REGION END 2012
Asia Pacific
North and South America
EMEA
24%
38%
38%
2 BREAKDOWN OF EMPLOYEES BY TYPE OF CONTRACT END 2012
Agency contract
Permanent contract
Temporary contract
9%
89%
2%
3 BREAKDOWN OF EMPLOYEES BY GENDER END 2012
Male
Female
24%
76%
4 BREAKDOWN OF MANAGEMENT BY GENDER END 2012
Male
Female
20%
80%
20 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Indicators
SOCIAL ASPECTS
The key performance indicators on social aspects of TenCate’s corporate
social responsibility concern employment, welfare and safety, education
and training, diversity and equal opportunities. These are refl ected in
TenCate’s sustainable personnel policy.
SUSTAINABLE PERSONNEL POLICY
As a technology group, TenCate is a knowledge-intensive company.
The health, safety and knowledge of the employees are paramount.
Investments in this human capital benefi t the company. Appropriate
safety policies are implemented at production and operating sites
worldwide to promote optimum health and safety and keep industrial
accidents to an absolute minimum.
PERSONNEL DISTRIBUTION
As a multinational company, TenCate operates worldwide. Production
sites have been established on various continents. Figure 1 shows the
geographic distribution of TenCate employees (head count) across
continents at the end of 2012. Figure 2 shows the breakdown of
employees by contract type at the end of 2012, detailing the numbers
hired under permanent, temporary and agency contracts.
The breakdown of employees by region has remained almost unchanged
compared to 2011. The proportion of employees with a temporary or
agency contract has decreased by approximately 5% compared to 2011.
Despite the technical nature of the company, TenCate aims expressly
to be a company that provides suffi cient scope for diversity among
employees. Figure 3 shows the composition of the workforce by gender.
Over three-quarters of the total number of employees are male and
almost one-quarter female. Figure 4 shows the composition of the
entire management of TenCate. Eight out of ten management
employees are male and two out of ten are female. The percentages in
both charts have remained almost unchanged compared to 2011.
OCCUPATIONAL SAFETY AND WELFARE
The safety and protection of employees and their working environment
are a key focus of TenCate’s production sites. Table 5 provides an
overview of occupational safety and welfare, expressed in ratios of
industrial accidents, fatal industrial accidents, absence in days/working
days, occupational diseases and sickness absence. In 2012 the ratio of
industrial accidents was negatively impacted by the introduction of a
number of new production processes in the TenCate Advanced Armour
market group, which led to an unexpected number of minor incidents.
Effective corrective safety measures have now been implemented.
5 OCCUPATIONAL SAFETY AND WELFARE 2011 2012
Industrial accidents* 1.8 2.4
Fatal industrial accidents* 0 0
Absence due to industrial accidents
in days/working days* 22.1 48.9
Industrial diseases* 0.03 0.00
Sickness absence* 2.1% 2.7%* Ratio per 100 FTEs.
EDUCATION AND TRAINING
TenCate invests in the quality and competences of its employees.
Education and training are crucial for the optimum development and
maintenance of the company’s knowledge resources. The company uses
both external and internal on-the-job training. In 2012, 906 employees
took part in technical training courses, while 105 attended management
training. Figure 6 shows the breakdown between internal and external
training hours. The number of internal training hours has increased
compared to 2011.
6 INTERNAL AND EXTERNAL TRAINING HOURS
Internal training hoursExternal training hours
30%
70%
19%
81%
2011 2012
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 21
ECOLOGICAL ASPECTS
The key performance indicators relating to individual ecological aspects
of TenCate’s corporate social responsibility concern energy, CO2
emissions, water and sewage and waste materials. The performances
in these areas are a result of TenCate’s comprehensive sustainability
policy.
SUSTAINABLE ENERGY POLICY
Energy consumption is an issue that demands attention worldwide.
TenCate is mindful of this and contributes through its actions,
investments and technological innovations to the reduction and
maximum effi ciency of energy consumption. An increase in the share
of ‘green energy’ forms part of the prevailing energy policy.
ENERGY CONSUMPTION
Total energy consumption in 2012 amounted to approximately
1,966 terajoules. This represents a marginal increase of 0.3% compared
to 2011. Among TenCate’s production processes, it is particularly fabric
production and the extrusion of synthetic fi bres that are the most
energy-intensive. Approximately 5% of the electricity consumed comes
from sustainable sources, such as green power. Biogas is used for
steam production. As a result of targeted measures, greater energy
savings were achieved in 2012 than in the previous year. Figure 7 shows
the percentage breakdown of energy consumption by energy source for
both 2011 and 2012.
7 ENERGY CONSUMPTION BY ENERGY SOURCE 2011 2012
Renewable electricity 2.7% 2.6%
Non-renewable electricity 51.0% 51.1%
Biogas 0.0% 0.1%
Natural gas 33.0% 33.3%
Propane gas 0.3% 0.4%
Diesel 0.0% 0.0%
Steam 12.6% 12.1%
Compressed air 0.3% 0.3%
Groundwater 0.1% 0.1%
CO2 FOOTPRINT POLICY
CO2 emissions go hand in hand with energy consumption. The increase
in CO2 in the atmosphere increases the greenhouse effect on earth and
contributes to climate change. TenCate is mindful of this and directs its
policy towards reducing CO2 emissions. By determining its level of CO
2
emissions, TenCate gains an insight into the total greenhouse gas
emissions caused by its operations. A better understanding of CO2
footprints and how to reduce them can be obtained by identifying and
then categorising emissions. At the same time energy conservation
helps to increase energy effi ciency and reduce both fossil fuel
consumption and CO2 footprints in order to cut process costs. TenCate’s
CO2 footprint is made up of the various emission sources, such as
electricity, natural gas and steam.
CO2 EMISSIONS
In 2012 TenCate’s total CO2 emissions worldwide amounted to
approximately 195 kilotons. That represents an increase of 2.9%
compared to 2011. Figure 8 shows a comparison of CO2 emissions by
energy source in 2011 and 2012. The data show that approximately
70% of TenCate’s CO2 footprint policy is due to electricity consumption.
Sustainable sources, such as wind power, hydroelectricity or solar
energy now account for 5%. This portion is therefore CO2-neutral.
The bulk of CO2 emissions are attributable to the energy-intensive
market groups, namely TenCate Protective & Outdoor Fabrics, TenCate
Geosynthetics and TenCate Grass.
8 CO2 EMISSIONS BY ENERGY SOURCE 2011 2012
Electricity 70.3% 71.0%
Natural gas 19.1% 18.4%
Propane gas 0.2% 0.2%
Diesel 0.0% 0.0%
Steam 8.4% 7.9%
Compressed air 0.3% 0.3%
Groundwater 0.1% 0.1%
Flights 0.4% 0.6%
Road transport 0.7% 0.8%
Other sources 0.5% 0.7%
SUSTAINABLE WATER AND SEWAGE POLICY
Water consumption is a growing issue worldwide. TenCate is mindful of
this and contributes to the reduction and maximum effi ciency of water
consumption by means of its actions, investments and technological
innovations. Water consumption is broken down by source. Waste
water treatment is broken down by use. TenCate’s water treatment
plants form an integral part of the water and sewerage policy at the
respective sites worldwide.
22 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Indicators
WATER CONSUMPTION
Total water consumption in 2012 amounted to approximately 3.5 million
cubic metres of water. This represents an increase of 6.9% compared to
2011, even though consumption of drinking water decreased in 2012.
The increase was largely due to an increase in groundwater use in
Nijverdal. Figure 9 sets out water consumption by water type. The
underlying data show that the main consumer of water is the TenCate
Protective & Outdoor Fabrics market group, with a combined share of
water consumption of over 50 per cent. This percentage can be
explained by the current analogue fi nishing process used for technical
textiles in the water-intensive processes in this market group.
WASTE WATER
The total volume of waste water was 3.1 million cubic metres in 2012.
This represents an increase of 4.5% compared to 2011. Figure 10
provides an overview of total waste water by use. Since part of the
water drawn during production evaporates or is absorbed in part by
products, the volume of discharge water is by defi nition lower than the
volume of water drawn.
SUSTAINABLE WASTE POLICY
TenCate uses raw materials as effi ciently as possible. A lower volume
of waste materials by defi nition means better utilisation of scarce
raw materials. Unavoidable waste materials are separated in an
environmentally conscious way and processed by recognised waste
processing organisations.
WASTE STREAMS
Approximately 14 kilotonnes of waste were released in TenCate’s
production processes in 2012. Ten kilotonnes were recycled during
the reporting year (a reduction of 12.6% compared to 2011) and
3 kilotonnes were processed externally (a reduction of 5.5% compared
to 2011, since somewhat more waste was incinerated by the waste
processing organisation). Plastic waste in particular (including synthetic
fi bres) was recycled more internally in 2012. Figures 11, 12, 13 and
14 provide an overview of waste by waste streams, type of waste
separation, type of recycling and method of waste processing.
11 WASTE STREAMS BY TYPE IN 2011 AND 2012
97.9% 97.5%
2011 2012
2.1% 2.5%
Non-hazardous wasteHazardous waste
12 WASTE SEPARATION BY TYPE IN 2011 AND 2012
10.2%
2011
0
20
40
60
80
13.4%
77.7%
66.5%
8.9%12.4%
3.2%7.7%
Paper Plastic Wood Organic
2012
9 WATER CONSUMPTION BY SOURCE IN 2011 AND 2012
41.2%
24.3%
43.2%
19.7%
2011 2012
34.5% 37.1%
Surface water
Groundwater
Drinking water
10 WASTE WATER BY USE IN 2011 AND 2012
13.7%
36.2%
17.8%
31.8%
2011 2012
50.1% 50.4%
Other water
Surface water
Sewage
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 23
ECONOMIC ASPECTS
Economic indicators concerning TenCate’s fi nancial performance can be
found in the later parts of the 2012 annual report. In this section
TenCate reports on the key performance indicators with regard to
sponsorship and donations during the reporting year.
SUSTAINABLE SOCIAL POLICY
TenCate has a strong commitment to society through sponsorship and
donations. The company has a sense of close involvement worldwide in
the local communities in which it operates. Every year, TenCate
sponsors various initiatives, both fi nancially and in kind, with materials
which the company produces. In addition market groups and employees
make time or resources available for local or regional social activities.
The sponsorship policy and activities in 2012 are detailed on the
corporate website: www.tencateannualreports.com.
SPONSORSHIP AND DONATIONS
TenCate has a commitment to society. In 2012 the contribution to social
projects totalled approximately 0.1% of revenues. Figure 15 provides an
overview of the investments in the form of sponsorship or donations in
2011 and 2012. There are only marginal differences between the two
years. The main sponsorship in 2012 once again concerned Heracles
Almelo and the laying of the new, recyclable synthetic turf system in
the stadium of this professional football club.
13 WASTE RECYCLING BY TYPE IN 2011 AND 2012
46.6%64.0%
2011 2012
53.4% 36.0%
Internal recyclingExternal recycling
14 WASTE PROCESSING BY TYPE IN 2011 AND 2012
83.4% 78.0%
2011 2012
16.6% 22.0%
Landfill
Incineration
15 SPONSORSHIP AND DONATIONS IN 2011 AND 2012
8.4%
87.4%
9.8%
85.3%
2011 2012
4.2% 4.9%
Donations
In cash
In kind
24 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
OBJECTIVES
Corporate social responsibility is the direct responsibility of the line
management. This is actively supported at corporate level by providing
tools to fulfi l and safeguard this responsibility and present it as
transparently as possible.
During the reporting year TenCate concentrated on gathering reliable
information on numerous aspects of sustainability. The market group
units which have been certifi ed in accordance with the CSR
Performance Ladder (level 3) have already formulated objectives for the
forthcoming reporting year, including for the reported nine KPI’s. During
the forthcoming year, TenCate will also formulate more sustainable
objectives for other market groups. At the same time, the reporting
business units will receive a CSR factsheet giving an insight into
the performance compared to comparable business units. The local
management will be asked to submit a detailed CSR improvement plan.
TRANSPARENCY BENCHMARK
TenCate is assessed annually in the transparency benchmark of the
Netherlands Ministry of Economic Affairs and Innovation. The aim of
this annual examination is to assess and improve the content and
quality of social reporting by Dutch companies. For the present 2012
annual report, TenCate aims to secure a position in the top 100. In past
years the company secured the following scores and positions in the
transparency benchmark:
>Indicators
Year
2012
2011
2010
2009
Position of TenCate
141
150
146
78
Transparency Benchmark of the Netherlands Ministry of Economic Affairs and Innovation
Annual report
2011
2010
2009
2008
Participants
472
468
462
172
TenCate’s points
89
61
41
26
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 25
The process of value creation
Business model and value creation
Customer specifi c solutions
Cost-effi c
ient pro
duct
ion
End-
user
experie
nce
Disruptive and sustaining technologies
CORPORATE VALUES
■ Reliable ■ Dedicated ■ Innovative ■ Committed ■ Skilled ■ Entrepreneurial ■ Creative
END-USER MARKETING INNOVATION
COST LEADERDIFFERENTIATION
VALUE DRIVERS END-USER MARKETING
■ Reduction total cost of ownership
of end-users
■ Problem solving ability
■ System approach
■ Best in class: price-performance
■ Co-creation: development with clients
■ Reliability: the TenCate brand stands for
quality
VALUE DRIVERS DIFFERENTIATION
■ Productportfolio: linked to specifi c
customer needs
■ Time-to-market
■ Best in class: price-performance-
quality-service
■ Flexibility: adapt fast to changing needs
VALUE DRIVERS INNOVATION
■ Broad technology base
■ Open innovation networks
■ Knowledge networks
■ Patents & intellectual properties
■ Market driven innovation
& problem solving
VALUE DRIVERS COST LEADER
■ Economies of scale
■ Procurement advantages
■ Availability of raw materials
■ Geographical spread of production
■ Logistic advantages: close to clients
■ Recyclability
26 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Business model and value creation
VALUE CHAIN MANAGEMENT AND THE 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.
TenCate operates in markets in which it is important to draw attention
to the distinctive features of the product range on the basis of the value
proposition. An important target group comprises institutions such
as purchasing organisations which play a decisive role in drawing up
standards and specifi cations which materials must fulfi l. In addition
to functionality, requirements may be specifi ed in areas such as
sustainability, CO2 footprint, costs during economic service life and
warranties. It is also important to be able to respond rapidly to new
market requirements.
The setting of specifi cations and standards is generally a dynamic
process to which TenCate must respond appropriately. That requires
a fl exible and innovative organisation.
TenCate business model © TenCate
VALUE CHAIN MANAGEMENT LANRETNILANRETXE
portfoliomanagement
processmanagement
marketmanagement
END-USER MARKETING
market
product
technology
process
DIFFERENTIATION
INNOVATION
COST LEADER
businessdevelopment
TenCate devotes increasing attention to communication on the value
proposition. In the company’s txtures magazine, this theme is always
described on the basis of the value chain management business model
with the following four pillars:
■ End-user marketing
■ Technological innovation
■ Cost leadership
■ Product differentiation
END-USER MARKETING
TenCate products and solutions deliver functional added value in
practically all cases. End-user marketing is growing increasingly
important due to ever-higher product requirements. Marketing in the
various market groups across a range of activities was designated
as one of the key future strategies in 2012. The organisation will be
further strengthened in this regard in 2013. The accessibility of product
information has also been increased with the launch of the new
TenCate website at the end of 2012 and increasing use of social and
multimedia.
A positive factor for TenCate as an adaptable, innovative organisation is
that market requirements evolve. Demand for safety and protection is
increasing everywhere. Programmes to modernise army equipment and
police and fi re brigade uniforms are examples of this. Climate change
and natural disasters also give rise to demand for new solutions in the
areas of safety and environmental protection. No one is better equipped
than TenCate to respond. The challenge is to fulfi l new demands within
the currently available government budgets. TenCate therefore also has
the task of delivering cost-effective solutions through greater coherence
both internally and externally.
An initiative was launched in 2012 aimed at both internal cost savings
and more intensive cooperation within production chains.
The main value drivers for end-user marketing are:
■ Problem-solving capability: responding to functional requirements
of the end-user
■ System approach: components / materials form part of an integrated
system
■ Differentiation of the product portfolio to fulfi l local needs,
standards and rules
■ Best in class: price-performance ratio
■ Innovative: co-creation; developing specifi cations jointly with
customers
■ Reliable; the TenCate brand stands for top quality
■ Brands such as TenCate Defender™ M and TenCate Tecasafe™ Plus
set the standard
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 27
TECHNOLOGICAL INNOVATION
Key pillars of TenCate’s current successful activities have been built on
past Innovations. Innovations at TenCate usually have a technological
background, such as the development of thermoplastic composite
technology (TenCate Cetex®) and surface nanotechnology through
the use of digital inkjet technology. Innovations also result from
combinations of existing technologies, as in the case of TenCate
Defender™ M and TenCate GeoDetect®. In the fi rst case various fi bre
technologies were combined, resulting in new functionalities. The
second resulted from a combination of fi bre-optic technology and data
processing with geosynthetics products in a detection system.
Ground-breaking technological innovations are necessary to secure the
future. It is also essential to develop existing products by incorporating
new technologies. TenCate’s broad technological base enables it to be
an innovative, technology-driven company. Combined with many years
of specialist expertise in niche markets, this has enabled TenCate
to secure a unique global position in the various product-market-
technology combinations. Greater attention needs to be devoted to
the successful marketing of new inventions.
The main value drivers for innovation are:
■ Broad technological basis
■ Links to universities, colleges and knowledge networks
■ Membership of open innovation networks
■ Internal co-operation and exchanges of knowledge between market
groups (social innovation)
■ Knowledge positions and intellectual property
■ Market-driven (applied) innovation aimed at problem-solving
COST LEADERSHIP
Although products must have the right technical and functional
specifi cations, the cost aspect remains very important. In the current
economic climate in particular, with declining government budgets,
there is also a high awareness of costs on the demand side.
By producing globally and accessing commodity markets worldwide,
TenCate in principle has a good cost base and the company operates in
close proximity to most end-markets. The favourable cost structure
results partly from the leading positions which TenCate occupies in its
core markets, enabling it to achieve economies of scale. Standards and
regulations vary around the world, leading to fragmentation in the
product portfolio.
A critical assessment of the entire product portfolio was made during
the reporting year, in view of the risk that the economies of scale could
be negated by the fragmentation of markets and the need to meet
customer-specifi c product requirements. When weighing up the
respective benefi ts of optimisation of working capital control and
delivery reliability, certain business units initially focused on control of
inventory costs in 2012. This generated some revenue losses in 2012.
These can be avoided in future by better logistical planning.
The ‘make or buy’ decision is also increasingly important. For some
years investments in production capacity have been at a low level.
As an initiator of innovative developments, TenCate does not always
have to take on the production itself. The outsourced production of
TenCate Defender™ M is a good example. The same question will arise
in the continued development of the TenCate ABDS™ active blast
countermeasure system and newly developed synthetic turf systems.
This local-for-local approach can create many new jobs in the local
area. Around 10,000 jobs were created in the State of Georgia through
the outsourcing of production of TenCate Defender M.
Technological innovation can have a positive impact on the cost
structure. Considerable cost advantages can be achieved through
pioneering production methods such as digital fi nishing (development
in the fi eld of digital inkjet technology).
>‘Close cooperation and strategic partnerships between
Fokker Aerostructures and TenCate Advanced Composites,
both specialists in the aerospace supply chain, have
resulted in the development of innovative, high-calibre
thermoplastic aircraft components. The increased use of
thermoplastic's in the aviation industry is a trend driven
by the desire for weight reduction and sustainable
development.’
- Toine Verbruggen, Vice-President Procurement
& Supply Chain Management,
Fokker Aerostructures B.V.
28 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Business model and value creation
The main value drivers for cost leadership are:
■ Market leadership and the associated economies of scale
■ Purchasing advantages due to global coverage of commodity
markets
■ Availability of raw materials (TenCate is a key customer)
■ Geographic spread of production
■ Proximity of end-users; logistical advantages
PRODUCT DIFFERENTIATION
TenCate aims to develop an appropriate product portfolio offering
dependable solutions tailored to specifi c market and/or customer
requirements. The company increasingly cooperates with partners in
the value chain. The announcement of cooperation with 3M and BASF
in 2012 is a good example. The same applies to the alliance entered
into a number of years ago with Lenzing for the TenCate Defender™ M
product portfolio.
The end-markets benefi t from good cooperation within the chain in
terms of faster market launch times for new product requirements
and/or newly developed products, keen prices (economies of scale)
and a more solution-focused approach to customer requirements.
Product differentiation must increasingly be linked to end-user
marketing in order to position the overall value proposition correctly.
Greater signifi cance is therefore being attributed to marketing.
The sustainability aspect is of growing importance, partly because
public-sector bodies, which constitute TenCate’s principal customer
groups, are setting greater store by sustainability.
Value chains will increasingly become cyclical, opening up growing
opportunities for recycling as a source of raw materials. TenCate is
responding to this trend by minimising the use of toxic materials and
using recyclable raw and ancillary materials. Thermoplastic composites
(TenCate Cetex®) and the new TenCate matrix-woven synthetic turf
system are good examples of this.
The main value drivers for product differentiation are:
■ Broad product portfolio: a good fi t for specifi c customer requirements
■ Relatively large number of products developed recently
■ Best in class: price / performance
■ Relatively short time to market: ability to respond rapidly to market
demands
■ Many years of experience: material specifi cations, databases,
qualifi cations, etc.
CORPORATE VALUES
TenCate has a royal hallmark, recognising not only the company’s
exceptional history as one of the oldest enterprises in the Netherlands
but also the way it does business around the world. TenCate is
assiduous in imparting its ten principal corporate values to its
employees:
■ The customer is central: protecting people
■ Effective: doing the right things
■ Effi cient: doing things well
■ Creative: seeking solutions and creating systems
■ Flexible: the ‘living organisation’, adapting to external
developments, new demands and trends
■ Enterprising: identifying and optimising opportunities
■ Innovative: thinking ‘outside the box’
■ Reliable: doing business on the basis of trust; ensuring that TenCate
is seen as a reliable partner
■ Commitment: dedication to the work which the company stands for
■ Cooperation: working with colleagues and in teams.
Employees are TenCate’s human capital and are selected, rewarded and
appraised partly on the basis of the above values. They are expected to
be proactive, dedicated and open to change.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 29
ADVANCED TEXTILES & COMPOSITES
MARKET THEMES
The principal market themes for the Advanced Textiles & Composites
sector are:
■ Personal protection
■ Defence
■ Mobility
■ Leisure
The main areas of application of the products are the protection of
military personnel, police and process workers (heat- and fl ame-
resistant protection and ballistic protection), protection of personnel
in industry (process industry, oil and gas extraction) and protection
of fi re brigades and police forces. TenCate is also the European market
leader in high-quality outdoor fabrics for the outdoor market.
The armouring of army and other land, sea and air vehicles is an
important market. A fast-growing segment is the helicopter armour.
TenCate is less active in the personal protection market, which is
volume-driven and price sensitive.
In the fi eld of mobility, the current areas of application lie particularly
in aerospace, although applications in the automotive sector and other
industrial sectors will emerge over time. In both markets the strong
growth in demand is coming mainly from the need to economise on
fuel costs (lower emissions).
In most of the markets in which Advanced Textiles & Composites
operates, the trends are positive for TenCate because of the growing
focus on safety aspects and environmental impacts. Specifi c demands
are increasingly being made on materials. This is usually a favourable
development for TenCate if markets specify higher requirements for
products, leading to differentiated demand based on specifi c customer
requirements.
TECHNOLOGY
The Advanced Textiles & Composites sector is concentrated around
impregnation and coating technologies for the application and
processing of functional characteristics in and on textiles. The products
in this sector mainly comprise protective fabrics and composites (made
particularly of carbon, glass and aramid fi bres). TenCate is the global
market leader in the fi eld of protective fabrics and one of the
pre-eminent suppliers of composites. TenCate occupies a unique
position in the composites market because it has both thermoset and
thermoplastic composites (TenCate Cetex®) in its portfolio. TenCate
plays a leading role in thermoplastic composites technology in the
aircraft industry.
The raw materials used in the Advanced Textiles & Composites sector
are mainly synthetic fi bres such as para and meta aramids, optical and
carbon fi bres.
MARKET GROUPS
The Advanced Textiles & Composites sector comprises the following
market groups
■ TenCate Protective Fabrics
■ TenCate Outdoor Fabrics
Safety fabrics for a wide range of professional groups and protective
fabrics for outdoor applications.
■ TenCate Space & Aerospace Composites
■ TenCate Industrial Composites
■ TenCate Advanced Armour
Composite (lightweight) materials for aerospace and industrial
applications; antiballistics for personal protection and vehicle armour.
Sectors
>‘We want our innovative ideas and concepts to fi nd their
way into innovative products such as those of TenCate.
That also gives our employees a great deal of satisfaction:
“Look, my knowledge and expertise is in that product”.’’
- Michel Peters, CEO,
National Aerospace Laboratory of the Netherlands
(VALUE ADDED)RESELLERS
PROTECTIVE FABRICS
• R&D• Spinning• Weaving• Knitting• Pre-treatment• Dyeing• Finishing• Laminating• Quality control• Packaging & Logistics• Marketing & Sales
PROTECTIVE FABRICS
• Garment makers• Distributors
PROTECTIVE FABRICS
• Distributors• PPE-dealers• Laundries
PROTECTIVE FABRICS
• Industrial safety• Emergency response• Military & Police• Services & Industries
PROTECTIVE FABRICS
• Chemical suppliers• Polymer suppliers• Fibre suppliers
PROTECTIVE FABRICS
• Chemicals• Polymers
OUTDOOR FABRICS
• R&D• Spinning• Weaving• Pre-treatment• Dyeing• Finishing• Quality control• Packaging & Logistics• Marketing & Sales
OUTDOOR FABRICS
• Confectioners
OUTDOOR FABRICS
• Distributors• Dealers
OUTDOOR FABRICS
• Leisure• Home & Terrace• Emergency response• Refugee response• Military
ISO
900
1
FM H
PR (G
, USA
)
ISO
140
01 (N
L) /
MVO
PL
(NL)
OUTDOOR FABRICS
• Chemical suppliers• Polymer suppliers• Fibre suppliers• Fabric suppliers
OUTDOOR FABRICS
• Chemicals• Polymers
END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS
ISO
900
1
ISO
140
01 (N
L) /
MVO
PL
(NL)
END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS
AEROSPACE COMPOSITES
• R&D• Weaving• Pre-treatment• Chemical finishing• Calandering• Impregnation• Consolidation• Moulding• Quality control• Packaging & Logistics• Marketing & Sales
AEROSPACE COMPOSITES
• Original Equipment Manufacturers (OEM) - Prime contractors• Tier 1 & Tier 2 - Suppliers of integrated structures and assemblies• Tier 3 - Subcontracted part manufacturers
AEROSPACE COMPOSITES
• Aviation - Interior - Exterior• Radomes & Antennas• Space• Military
AEROSPACE COMPOSITES
• Chemical suppliers• Polymer suppliers• Fibre suppliers• Fabric suppliers
AEROSPACE COMPOSITES
• Chemicals• Polymers• Glass
ISO
900
1 | A
S / E
N 9
100
INDUSTRIAL COMPOSITES
• R&D• Weaving• Pre-treatment• Chemical finishing• Calandering• Impregnation• Consolidation• Moulding• Quality control• Packaging & Logistics• Marketing & Sales
INDUSTRIAL COMPOSITES
• Original Equipment Manufacturers (OEM)
INDUSTRIAL COMPOSITES
• Automotive• Oil & Gas• Commercial & Industrial• Sports & Leisure• Medical
INDUSTRIAL COMPOSITES
• Chemical suppliers• Polymer suppliers• Fibre suppliers• Fabric suppliers
INDUSTRIAL COMPOSITES
• Chemicals• Polymers• Glass
ISO
900
1
ADVANCED ARMOUR
• R&D• Designing & Testing• Production & Construction - Spall-liners - Add-on-Armour - Structural composites - Body armour inserts - Ready to fit solutions - Survivability packages• Quality control• Packaging & Logistics• Marketing & Sales
ADVANCED ARMOUR
• Original Equipment Manufacturers (OEM) - Vehicle manufacturers - Shipyards - Aircraft manufacturers - Body armour manufacturers - Helmet manufacturers - Cash-in-transit vehicle converters
ADVANCED ARMOUR
• Military - Land forces - Naval forces - Air forces - Special forces• Law enforcement• Personal protection• Cash-in-transit
ADVANCED ARMOUR
• Chemical suppliers• Polymer suppliers• Fibre suppliers• Fabric suppliers• Ceramic suppliers• Ballistic metal supplliers
ADVANCED ARMOUR
• Chemicals• Polymers• Ceramics• Metals• Glass
ISO
900
1 | A
S / E
N /
JISQ
910
0 (F
R)
ISO
140
01 (D
K) /
MVO
PL
(NL)
MVO
PL
(NL)
MVO
PL
(NL)
FM H
PR (C
, USA
)
30 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Sectors
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 31
BUSINESS MODELS OF EACH MARKET GROUP
TENCATE PROTECTIVE & OUTDOOR FABRICS
END-USER MARKETING TECHNOLOGICAL INNOVATION
■ End-user marketing based on value proposition (cost of ownership)
■ Brand policy
■ Risk awareness / safe society
■ Partnerships in emerging markets
■ Digital inkjet technology / ‘sustainable factory of the future’
■ Smart textiles
■ Effective use of internal knowledge (social innovation)
■ Patents
PRODUCT DIFFERENTIATION COST LEADERSHIP
■ Global market position, with local product adaptations for local
specifi cations
■ Fabrics based on fi bre blends and coated / fi nished fabrics (product
champions: distinctive in quality-performance ratio and costs)
■ Co-makership, products tailored to specifi c needs
■ Internal production combined with outsourcing delivers fl exibility
■ Economies of scale
■ Process innovation
■ Cost control
TENCATE SPACE & AEROSPACE COMPOSITES, TENCATE INDUSTRIAL COMPOSITES AND TENCATE ADVANCED ARMOUR
END-USER MARKETING TECHNOLOGICAL INNOVATION
■ Access to market participants and partnerships with OEM
relationships in market phase of the TenCate ABDS™ active blast
countermeasure system
■ Solution-focused approach due to independence from fi bre suppliers
■ Reputation and qualifi cations of renowned market participants
■ TenCate ABDS™ active blast countermeasure system
■ Open and closed open innovation through partnerships (TAPAS,
TPRC, AMRC, eTAC)
■ Qualifi cations for future programmes
■ Process innovations for processing of composites
PRODUCT DIFFERENTIATION COST LEADERSHIP
■ 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 effi ciency in production
■ Economies of scale
■ Outsourcing and partnerships
■ Development of low-cost solutions (industrial markets)
STRATEGY
The strategy is based essentially on the group strategy resulting from
TenCate’s value chain management business model. In all activities,
growth can be achieved by broadening the geographic spread (new
markets) and further developing the product portfolio (new
applications). This can be implemented in individual areas as follows.
Protective fabrics
TenCate operates particularly in the upper segment of the safety
clothing market. As a global player, TenCate has access to the
worldwide commodity markets. Optimum functional characteristics
can be achieved in materials through intelligent combinations of
characteristics of fi bres from different providers. Over the last few years
TenCate has focused particularly on greater wearing comfort with an
increase in the protective properties of the materials. Attention has also
32 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Sectors
been devoted to the cost aspect. The result is a very attractive price-
performance ratio. Following the great success of TenCate Defender™ M
in the United States of America, the geographic coverage of the
defence market has been substantially expanded. Other protective
fabrics, particularly for industrial markets, are increasingly being sold
worldwide. Internal knowledge is also being combined and exchanged
among European and American competence centres with a view to
developing a global market for the entire product portfolio. Increased
cooperation is taking place with international partners to accelerate
access to geographic markets.
Composites
After an initial focus on aerospace applications, further growth is being
pursued in industrial markets, such as tooling (die construction),
the automotive industry and oil and gas extraction (transport pipes).
On the basis of the buy & build strategy, new technologies were
acquired in 2012 through the US/Canadian company PMC Baycomp.
This has opened up access to new markets.
The focus of the group-wide growth strategy is on composite activities,
where TenCate currently occupies a unique technology position.
The combination of high-end thermoset technology and innovative
thermoplastic composite technology offers TenCate good growth
opportunities in mobility and other industrial markets.
The strategy is also focused on good collaboration with operators
along the entire value chain. TenCate has close relationships with
fi bre producers, the processing industry and end-customers (OEMs).
Alliances were entered into for certain applications in 2012 with major
international market operators such as 3M and BASF.
In the case of both TenCate Protective Fabrics and the two market
groups in the composites segment, it is essential to maintain good
relationships with raw material suppliers, particularly fi bre producers
and chemical companies. Many orders are project-driven. Delivery
reliability across the entire chain is vital. As a result of its leading
market positions, TenCate is usually one of the largest buyers of fi bres
in the specifi c market segment. Long-term cooperation agreements have
been entered into with a number of fi bre producers.
VALUE PROPOSITION
The Advanced Textiles & Composites sector has a unique combination
of technologies. TenCate Protective Fabrics produces both fi nished
substrates and inherently fl ame-resistant materials, in which the
functionalities result from the fi bre itself or a combination of fi bres.
TenCate Advanced Composites produces both thermosets and
thermoplastics. The company has a strong qualifi cation basis with
its portfolio of composites. For larger customers, TenCate can be a
dependable partner in the chain by providing a one-stop shop service.
TenCate Advanced Armour has built up strong knowledge of the
engineering and design of complete vehicle protection systems.
The aerospace background of the sister company TenCate Advanced
Composites also gives TenCate a strong basis in aerospace armour.
TenCate is known in the market for its positioning in high-performance
composites in the higher price segment. This principally concerns the
aerospace market. Major steps were taken in 2012 to extend the focus
to markets in which there is potential demand for larger volumes
but which also remain critical with regard to functional product
characteristics (engineered materials). It is in these markets that
TenCate can deliver the highest added value.
Thanks to these strong technology positions the company can respond
effectively to specifi c market requirements. These usually result from
laws or regulations, industrial and safety standards etc. which specify
the technical characteristics of materials. In the markets in which
TenCate operates, supplier reliability and commitment with regard to
the performance of materials and operation as a development partner
are essential. The requirements in terms of functional aspects of
materials evolve constantly and TenCate has the necessary knowledge
and fl exibility to respond appropriately.
ORGANISATION
The activities within the TenCate Protective Fabrics market group are
concentrated around the production sites in the Netherlands, the United
States of America and the joint venture in Thailand. In the Netherlands,
safety fabrics are produced using fi nished substrates (cotton blends and
synthetic products). In the United States of America, products are
produced using a combination of inherently protective natural or
synthetic fi bres. TenCate therefore has a wide range of product types
for various applications, each with specifi c product characteristics.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 33
Having regard to the large volumes and possible wide fl uctuations in
order sizes, the production of the entire TenCate Defender™ M product
portfolio was outsourced to third parties. In this case TenCate acts as
overall director of the value chain and maintains direct contact with the
end-user (including US Army authorities and purchasing organisations).
In all end-markets TenCate seeks to maintain direct contact with
end-users and industry organisations so as to respond effectively
to customer requirements and ensure that TenCate products are
well-positioned among end-customers. TenCate applies an own-brand
strategy based on the specifi c functional aspects and qualities which
end-users demand. TenCate works closely with market operators,
suppliers of the complete range of work clothing and professional wear,
which occupy leading positions in certain markets. This collaboration
usually results in co-development, joint branding, marketing support etc.
The TenCate Advanced Composites market group is also concentrated
around production sites in the Netherlands (mainly TenCate Cetex®
production) and the United States (mainly thermoset prepregs). In view
of the specifi c nature of the materials produced (thermoset versus
thermoplastics), the market focus differs somewhat depending on the
continent. In Europe, the focus has been primarily on the commercial
aviation industry. Concrete steps were taken in the automotive industry
in 2012. In the USA, the potential applications of composite products
are wider (military aviation, radomes, industrial applications, the sports
market). PMC Baycomp was acquired in the USA in 2012, strengthening
the thermoplastics portfolio in the USA. Complementary product ranges
wil increasingly be offered in the USA and Europe as a result of close
internal cooperation.
Amber Composites of the United Kingdom was acquired at the
beginning of 2013, with the result that thermoset composites are now
also produced in Europe. Growth can be accelerated through cross-
selling and the development of new markets (including the automotive
industry). Composites also began to be supplied in the Asian market
in 2012. As a result of acquiring PMC Baycomp, TenCate now also
has a small production site in China.
TenCate Advanced Armour is a separate entity within TenCate’s
composites activities. The market group has concentrated particularly
on the global market for vehicle armour. It has European production
sites in France, the United Kingdom and Denmark and operates
as a producer in the United States of America. TenCate has both strong
design capabilities and a wide range of protective (fi bre-reinforced)
composites. The market group supplies complete solutions for vehicle
programmes.
>‘Boeing has a long and rich history of cooperation with
suppliers and customers in the Netherlands. We value
Dutch technical expertise and this initiative. Dutch industry
and academic institutions are helping us to advance with
innovative aerospace technologies that enable us to
improve our global competitive position.’
- Peter Hoffman, Director Global R&D Strategy, Boeing
34 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Sectors
GEOSYNTHETICS & GRASS
MARKET THEMES
The main market themes in the Geosynthetics & Grass sector are:
■ Infrastructure
■ Water management
■ Sports and recreation
TenCate Geosynthetics is the world’s largest producer of high-strength
geosynthetics (grids, liners, fabrics and non-wovens) for infrastructure,
the construction industry and environmental applications. The portfolio
also comprises materials (industrial fabrics) for the agriculture,
horticulture and leisure sectors. The market group has three distinct
business units: infrastructure, water & environment and industrial
fabrics.
The market is devoting increasing attention to the positive
environmental aspects of geosynthetics. The use of environmental
arguments and the reduction of negative environmental effects are
therefore receiving greater emphasis in promotion, design and
specifi cations.
TenCate Grass has a leading market position worldwide in synthetic turf
systems (fi bres and backing). The company is positioned almost at the
beginning of the value chain. Strategy reinforcement takes place
continuously in all cornerstones of the strategic framework (value chain
management). The industry is in a phase in which the demand and
supply sides of the market are developing strongly. TenCate is pursuing
an active strategic policy to maintain leadership in terms of market
share and technology. With production sites in the United States,
the Netherlands and Dubai, TenCate has set up its production in a
cost-effective way, with an emphasis on volume production in the
Middle East, and the logistical lines to the market are short. Within
this strategic policy, TenCate is also leading the way by entering into
partnerships with key suppliers of synthetic turf systems.
The landscaping market is growing strongly and will ultimately have
similar, if not greater, potential than the sports market. With this in
mind, TenCate also invested substantial sums in texturing capacity
in 2012.
TECHNOLOGY
The Geosynthetics & Grass sector is concentrated around extrusion and
non-woven technologies. Geosynthetics products are mainly used to
stabilise or separate soil layers and to support dyke bodies and dam
walls. Geosynthetics (TenCate Geotube®) are also used in the
environmental market (fi ltration) and for the dewatering of polluted
sludge.
TenCate began extruding synthetic turf fi bres several decades ago and
currently supplies total systems for the global sports market and the
landscaping market, in cooperation with partners. The rise of synthetic
turf is mainly due to its greater playability, water savings and lower
maintenance cost compared to natural grass.
The main raw materials used are polyethylene and polypropylene,
as well as purchased synthetic yarns, such as nylon and polyester.
MARKET GROUPS
The Geosynthetics & Grass sector comprises the following market
groups:
■ TenCate Geosynthetics
Fabrics, grids and non-wovens for solutions and applications for
infrastructure projects and the environmental market, as well as
industrial fabrics for a range of applications, such as agribusiness,
sports and leisure.
■ TenCate Grass
Synthetic turf components and systems for applications such as
football, hockey and other sports pitches, as well as landscaping.
In addition to the companies producing fi bres and carpet backing
(upstream activities), the Grass group includes a growing number of
system development and marketing companies (downstream activities).
(VALUE ADDED)RESELLERS
GEOSYNTHETICS
• R&D• Weaving• Non-woven• Knitting• Grids• Pre-treatment• Finishing• Quality control• Packaging & Logistics• Marketing & Sales
GEOSYNTHETICS
• Distributors• Contractors• Retailers
GEOSYNTHETICS
• Dealers• Subcontractors
GEOSYNTHETICS
• Civil work• Water & Environment• Industrial• Oil & Gas• Renewable energy
GEOSYNTHETICS
• Chemical suppliers• Polymer suppliers• Fabric suppliers• Yarn suppliers
GEOSYNTHETICS
• Chemicals• Polymers
END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS
ISO
900
1
FM H
PR (G
, USA
)
MVO
PL
(NL)
(VALUE ADDED)RESELLERS
GRASS
• R&D• Spinning yarns• Weaving backing• Finishing yarns• Finishing backing• Quality control• Packaging & Logistics• Marketing & Sales
GRASS
• Tufters• Weavers
GRASS
• Installers• Marketing organisations
GRASS
• Soccer• American Football• Hockey• Tennis• Golf• Padel• Multisport• Landscaping
GRASS
• Chemical suppliers• Polymer suppliers
GRASS
• Chemicals• Polymers
END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS
ISO
900
1
ISO
140
01 (N
L) /
MVO
PL
(NL)
FM H
PR (T
, USA
)
Safety assurance refers to:
• Highly Protected Risk (HPR) status determined by FM Global
Sustainability assurance refers to:
• ISO 14001 environmental management systems
• CSR Performance Ladder (CSR PL), CSR management system for corporate social responsibility
Quality assurance refers to:
• ISO 9001 general quality management systems
• AS 9100 (US), EN 9100 (Europe), JISQ (Asia) aerospace quality management systems
SAFETY
SUSTAINABILITY
QUALITY
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 35
36 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Sectors
BUSINESS MODELS OF EACH MARKET GROUP
TENCATE GEOSYNTHETICS
END-USER MARKETING TECHNOLOGICAL INNOVATION
■ Alliances with market participants
■ Local collaboration with partners in emerging markets
■ Geographic spread of distribution
■ Positioning in sustainability (water management, environmental
solutions, low CO2 footprint)
■ Development of relationships in the Chinese market
■ TenCate GeoDetect™ solutions
■ Dewatering and fi ltration technology
■ Biopolymers
PRODUCT DIFFERENTIATION COST LEADERSHIP
■ Continuing development of new products (innovation awards)
■ Focus on water management, environment and infrastructure
■ Economies of scale (volume products)
■ Process optimisation
TENCATE GRASS
END-USER MARKETING TECHNOLOGICAL INNOVATION
■ Alliances with market participants (downstream activities)
■ Geographic spread of distribution
■ Positioning and advantages of the sustainability aspect
(water management, recycling)
■ Increased quality awareness in end-markets
■ Market positioning (GreenFields, Edel Grass, TigerTurf)
■ Relationships with sports federations
■ Reduction of total cost of ownership of sports pitches
■ Product and system warranties
■ Fourth-generation developments
■ Weaving technology
■ Biomechanical characteristics (research project with third parties)
PRODUCT DIFFERENTIATION COST LEADERSHIP
■ System components, ‘Powered by TenCate’
■ Optimum support of downstream activities for development
of new system concepts
■ Economies of scale
■ Process optimisation
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 37
STRATEGY
Cost leadership is a key pillar of the business model for the
Geosynthetics & Grass sector. For non-wovens, the geosynthetics
market is mainly volume-driven. The same applies increasingly to the
market for synthetic turf fi bres, although the one-stop-shop aspect is
an important competitive advantage for the project market. TenCate
has cost-effective production sites in Asia (geosynthetics) and Dubai
(synthetic turf yarns).
TenCate has strengthened its position in the synthetic turf market with
regard to end-markets through a process of chain integration. Market
competition is increasingly taking place in the area of end-solutions
(systems). This is necessary on the one hand to gain greater control
of the quality of sport systems in end-markets and on the other hand
to safeguard the sustainability aspect more fully.
The TenCate Geosynthetics market group has developed a specialisation
in water management and the environment. A separate business unit
has been formed for this with a worldwide approach. This also involves
increasingly close cooperation with specialist companies in the chain,
such as consulting fi rms, dredging companies and construction fi rms,
in order to strengthen the focus on end-solutions in this fi eld.
VALUE PROPOSITION
The value proposition for both geosynthetics and synthetic turf
solutions is concentrated largely on the fi eld of sustainability. Water
shortages, or an overabundance of water, are important factors which
determine demand in the global market. In many cases geosynthetics
have a demonstrably lower CO2 footprint than the more traditional
construction materials (concrete, rockfi ll). Governments are focusing
increasing attention on the sustainability aspects of infrastructure, civil
engineering and sports projects. TenCate has production sites in Europe,
North America and Asia, enabling it to respond fl exibly and rapidly to
demand from local markets. For a supplier of a wide portfolio of
materials, the collaboration with TenCate market participants provides
logistical and purchasing advantages. The value proposition is also
associated with extensive technical consulting on the processing of
products in projects and systems. Quality, dependability and delivery
reliability are key elements of the value proposition. TenCate presents
itself as an innovative producer of high-quality materials.
ORGANISATION
TenCate conducts a market policy based partly on the principle of ‘local
for local’. Local standards and local market demand are factors in both
the geosynthetics and synthetic turf markets. The production of
synthetic turf yarns in Dubai involves low-cost production mainly of
standard products. The same is true of geosynthetics in China, although
this site also produces for the local market. TenCate Grass develops
new products mainly in the Netherlands, where the R&D activities are
concentrated. In the geosynthetics activities there is a more continental
approach, based on local market requirements.
Across the whole sector, close relationships are maintained with parties
playing a key role in the defi nition of product specifi cations. TenCate’s
materials play a crucial role in the end product or system. End-user
marketing occupies a central position in the sales organisation.
>‘Both TenCate and Heracles Almelo are progressive
businesses. We both want to operate on the basis of
sustainability and are moving together in that direction.
TenCate is more than just our main sponsor. The company
has been a very committed and reliable partner for
10 years.’
- Nico-Jan Hoogma, CEO, Heracles Almelo
38 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Sectors
OTHER ACTIVITIES
The Other Activities sector comprises:
■ Xennia Technology
Specialist inkjet technology for industrial applications, such as the
printing, coating and fi nishing of materials.
■ TenCate Enbi
Technical rollers and components particularly for printers, copiers,
fax machines, postal sorting machines and ATMs.
■ Holding & Services
Holding company activities.
Xennia Technology ltd (79%) combines technology (hardware solutions)
with operating systems (software) and internally developed ink
formulations to create industrial production systems. The company
focuses particularly on textile printing and fi nishing and on the
decoration and coating of materials.
TenCate Enbi occupies an important position in these markets as a
leading supplier to major European, American and Asian printer and
copier manufacturers. In addition to the offi ce market, TenCate Enbi
serves niche markets, such as postal sorting machines, ATMs, photo
printers and insulation (foam-based products).
STRATEGY
Xennia Technology and TenCate Enbi occupy a separate position within
the TenCate Group.
Xennia Technology was acquired some years ago to facilitate
technological development in the fi eld of inkjet technology.
This initiated key process innovation in the fi eld of textile fi nishing.
The fi rst production based on this technology in TenCate is expected
to start in early 2013.
TenCate Enbi has staged a major turnaround in the last few years.
With production sites in Europe (Germany and Hungary), the United
States of America and China, the company has a unique position in the
supply of components to leading producers (OEMs) of printers and
copiers. TenCate Enbi has also focused successfully on the Asian
market, where signifi cant revenue growth has been achieved in recent
years.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 39
CORPORATE HUMAN RESOURCES
HUMAN RESOURCES POLICY
TenCate’s human resources policy is based on:
■ A safe work environment for employees
■ Qualifi cation, development and promotion of employees
■ Increasing the professional knowledge of employees
■ Promoting internal cooperation
■ Developing leadership and entrepreneurial qualities
■ Retaining talent and guaranteeing knowledge
GENERAL INFORMATION
An important aspect of corporate human resources in 2012 was the
further professionalisation of key positions. This involved in particular
the recruitment of new managers and specialists.
Salaries worldwide were frozen as far as possible in 2012. Increments
agreed under collective labour agreements, government-set minimum
wages and promotions were respected. A critical assessment was also
conducted of both the quality and quantity of the manpower factor.
A number of TenCate business units were restructured, on the one hand
to adapt to worldwide and regional market developments and on the
other hand to make TenCate’s activities even more effi cient. As a result,
the number of employees with employment contracts in the existing
companies in Europe and North America decreased by around 280 FTEs
in 2012. The workforce growth occurred in Asia, mainly at TenCate Enbi,
and through the acquisition of PMC Baycomp in the United States.
TenCate employed 4,454 people worldwide at the end of 2012.
ORGANISATIONAL DEVELOPMENT
Governments worldwide are spending less. A large part of the revenues
from TenCate’s activities depend on government spending and projects.
Industrial power relationships are shifting and emerging markets are
growing.
TenCate’s continued success therefore depends crucially on its ability
to infl uence end-users, deliver innovations and develop and implement
new marketing strategies appropriately.
The absolute priorities are to increase TenCate’s commercial strength
and market the innovations which the company has developed in recent
years. This requires a further strengthening of the sales and marketing
competences within the existing organisation. The organisation will act
as an enabler in this regard. Entrepreneurship remains central at all
levels in the market groups. It is essential to translate and implement
the strategy appropriately.
MANAGEMENT DEVELOPMENT
A TenCate Executive programme was developed jointly with a number
of international business schools in 2012 to promote internal
successions to senior management positions. This programme will
begin in early 2013 for senior managers in North America. It is an
inspiration and development programme to develop and implement the
company’s strategic policy. It also marks the starting point for the
further personal development of the individual managers.
The succession planning at international management level and the
respective key specialists were updated in 2012. TenCate has
appropriate successors for over 50% of vital posts. A number of them
can occupy the vacant positions immediately. Others will require around
two more years to reach the required level. One-third of them have the
potential and need to develop for another fi ve years.
Corporate information
OWN EMPLOYEES
(in number of staff years) Year-end 2007 Year-end 2008 Year-end 2009 Year-end 2010 Year-end 2011 Delta vs 2011 Year-end 2012
Netherlands 975 931 862 785 819 – 24 795
Other Europe 582 612 569 724 672 – 42 630
United States of America 1,527 1,573 1,314 1,542 1,604 – 57 1,547
Asia / Australia 641 936 777 878 1,030 181 1,211
Middle East 295 385 283 342 228 43 271
Total 4,020 4,437 3,805 4,271 4,353 101 4,454
40 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Corporate information
A trainee programme has also been introduced. Young, academically
trained and recently graduated people will be recruited for two years
over and above the normal complement to carry two or three projects in
the fi eld of business development, sales & marketing, R&D and/or
operations. The aim is to acquire specifi c or updated knowledge, absorb
innovative or refreshing insights and transpose these into TenCate’s
strategy. After two years an assessment will be made as to whether the
former trainees can be deployed within TenCate and, if so, in which
regular posts.
EMPLOYMENT CONDITIONS
TenCate offers its employees a comprehensive and competitive package
of employment conditions. To this end, regular surveys are conducted in
co-operation with Hay Group and local employer organisations.
TenCate operates a uniform remuneration policy for the management of
all businesses. The bonus systems for the senior management are
also determined centrally. That takes place on the basis of the result
of the operating company and in some cases also partly on the basis
of the results of the respective TenCate market group as a whole.
TenCate operates businesses in 25 countries around the world, each
of which has its own employment regulations, laws and culture.
The operating companies therefore conduct their own personnel
policy, which is tailored to the local situation. The general conditions
and principles of the market group also apply.
No TenCate offi cers have an explicit CSR weighting in their
remuneration. This is due to TenCate’s fundamental view that
sustainability forms an integral part of the company’s comprehensive
pursuit of continuity.
A survey of age-aware personnel policy in the Dutch TenCate
businesses was completed in 2012. This was conducted having regard
to the continuing ageing of the Dutch workforce, dejuvenation and the
increase in the retirement age in the Netherlands. A number of pilots
and measures will be implemented in 2013 to ensure that employees
can continue to be employed healthily and appropriately for a longer
period. These pilots will focus on adjustments to shift rosters and
working times, occupational physiotherapy, increased fl exible
employment and health management. The aim is also to increase
the number of training hours per employee.
All employees within TenCate have access to ‘10Cate’, which
represents the identity of the company. These guiding principles of the
TenCate organisation embody the ‘why’ of TenCate (Protecting people).
These ten core values are universal within the worldwide company.
10Cate is centred on the customer and together with the TenCate
business model provides the guiding principles for each employee.
One of TenCate’s core values is reliability. The integrity code applies
to everyone employed by TenCate and forms part of each individual
contract of employment. A corporate compliance offi cer and
a confi dential adviser have been appointed to support the code.
TenCate also has a social media code.
OCCUPATIONAL SAFETY AND WELFARE
TenCate’s policy is focused on implementing and/or establishing all
activities and processes in such a way as to prevent any personal injury
or damage to health. This is the guiding principle for the health and
safety policy which has been or is being implemented in every company.
With annual campaigns focused on promoting safety, sustainability,
quality and welfare, TenCate seeks to offer employees on all continents
a safe and high-quality working environment. The objective is pursued
jointly with the managements of the companies. One of the outcomes
is a relatively low level of sickness absence worldwide.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 41
CORPORATE INFORMATION TECHNOLOGY
The establishment of the data centre in Kuala Lumpur and the
appointment of the IT manager for the IT shared service centre in Asia
mark the fi nal stage of the transformation from a decentralised IT
organisation to a worldwide shared service centre IT organisation.
TenCate now has three regional IT shared service centres (North
America, EMEA and APAC), from which IT services are provided for the
regional TenCate companies.
TenCate’s recent acquisitions in North America and Asia have been
added to TenCate’s secure network.
The IT strategy for applications was adjusted in 2012 with the aim of
faster delivery of clear business information on each product, market
and market group. A special team is being established for this in 2013
to help companies achieve this objective with their business processes
and ERP applications. The number of ERP applications will be further
reduced and data harmonisation will be standardised by means of a
blueprint.
INVESTMENTS
In addition to a number of technology investments in IT systems (data
centre in Kuala Lumpur, storage capacity and telephone exchanges),
both the content management system and the design of various parts
of the TenCate website were completely overhauled jointly with the
Corporate Communication department. Various ERP implementations
were also completed.
GREEN IT
TenCate has devised a Green IT strategy and is engaged with its
implementation. Examples of concrete steps taken by corporate
IT include:
■ Purchasing from ‘green’ certifi ed data centres
■ Reduced use of local printers and consumables and replacement
by network printers (multifunctionals)
■ Digitisation of documents through the use of the intranet (iNetwork)
■ Reduction of energy consumption in data centres by reducing the
number of physical servers (virtualisation) and applying the cooling
strategy of cool aisles and hot aisles
■ Reduction of chemical fi refi ghting systems through the use of
FirePass systems in data centres. This involves reducing the oxygen
content of the data centre to prevent fi res
CORPORATE BUSINESS DEVELOPMENT
Central control and monitoring of business development projects was
initiated in 2011 to guarantee strategic implementation in cooperation
with operational units. The expansion of the activities in China, India
and South America, as well as the development of new composites
activities were key focal points.
The coordination of acquisitions is also controlled centrally. In addition
to acquisitions, cooperation takes place with business partners.
In mid-2012 it was announced that the strategy would be given a
sharper focus, with TenCate seeking to accelerate growth particularly in
new markets through cooperation with strong international partners.
All business development projects take place in close collaboration
with operational teams.
CORPORATE BRANDING
TenCate’s brand policy is focused on further strengthening and
expanding its image in the market with the strong TenCate corporate
brand that forms the basis for corporate communication and market
communication. The brand policy, based on the TenCate brand, is linked
to the end-user marketing strategy pursued by the various market
groups. The corporate brand is communicated in the same way in
the market groups to emphasise the mutual links between them.
TenCate also conducts an active patent policy. That applies both to
the registration of new inventions and to the protection of existing
intellectual property rights.
The existing portfolio is regularly assessed to ensure that the available
intellectual property is being used appropriately. TenCate innovates and
develops constantly. The resulting intellectual property is appropriately
registered and protected. The company also conducts an active policy of
protecting all its intellectual property. Action is taken if any infringements
are detected.
42 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Corporate information
DEVELOPMENTS IN 2012
Further work took place in 2012 on the positioning of the corporate
brand worldwide. The market groups are continuing to apply the
coordinated brand strategy in a consistent manner. It was already clear
in previous years that the strategy was also bearing fruit with regard
to brand value. The market value of the TenCate brand has risen again
relative to the previous year. The ranking of the top 50 Dutch companies
with the most valuable brands puts the value of the TenCate corporate
brand at € 250 million in 2012. In 2011 the fi gure was € 185 million
(Source: BrandFinance Dutch Top 50).
TenCate registered various new patents and thus further expanded its
existing patent portfolio in 2012. This is appropriate for an innovative
organisation that constantly develops new products. The brand portfolio
can be viewed on the website. The patent portfolio is not published,
due to competition considerations.
CORPORATE RISK MANAGEMENT
The aim of TenCate’s corporate risk management is to maintain safe
and secure production sites worldwide, thereby guaranteeing business
continuity and preventing any loss of production capacity. TenCate can
then also safeguard its position as a dependable supplier to its
customers.
Safety aspects concern in particular the risk of fi re, explosion and
natural disaster (fl oods, earthquakes, storms, hurricanes etc.). In
cooperation with the insurer FM Global, the corporate risk manager
conducts annual inspections of production sites of all market groups
worldwide. If a location complies with all FM Global guidelines for
damage prevention, the Highly Protected Risk status is attained and FM
Global presents the Highly Protected Risk Award.
Other initiatives are also deployed to maintain a high level of safety
culture within TenCate. Finally, the corporate risk manager deals with
numerous related matters that affect the liabilities of the company,
including product liabilities and other risks, as well as insurance cover.
DEVELOPMENTS IN 2012
In the autumn of 2012, the insurer FM Global granted the Highly
Protected Risk Award to three businesses. These were TenCate
Protective Fabrics in Georgia (USA), for the weaving mill at Zebulon and
the fi nishing plant at Molena, and TenCate Advanced Composites in
Morgan Hill, California (USA). That takes to six the number of TenCate
businesses which have received this distinction.
Fire safety information meetings were organised at Nijverdal again in
the spring and autumn of 2012. Evacuation and fi re drills were also held.
CORPORATE SOCIAL RESPONSIBILITY
TenCate’s sustainability policy forms an integral part of the pursuit of
continuity in the company, which has existed for over 300 years. It is
refl ected in the common denominator and the common goal of the
TenCate organisation: to protect people and their working and living
environments. It is also based on the forward-looking vision, mission
and strategy of the Executive Board.
As a multinational company, TenCate is aware the effect its actions
have on the social environment. By maintaining the company on the
basis of sustainable profi tability, TenCate aims to play a part in making
sure that the social, ecological and economic environment remains
available for future generations. TenCate is increasingly integrating
sustainability into its operating processes, products, joint ventures,
marketing and communication on the basis of corporate social
responsibility (CSR).
This creates shared awareness among both internal and external
stakeholders, which in turn opens the way to constructive initiatives
with buyers, customers, partners and institutions and stakeholders
aimed at the responsible deployment of people in production processes
and responsible use of commodities and materials.
Having regard to the worldwide trends in safety and sustainability on
which TenCate focuses, many underlying themes arise in relation to the
protection that TenCate provides. Such sustainability themes include
weight reduction, limitation of energy consumption, noise reduction,
insulation, water management, reuse, recycling, waste water and
sludge processing, wear and tear, resistance, bullet- and fragment-
proofi ng and heat and fl ame resistance.
Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW | 43
Numerous sustainability aspects arise to a greater or lesser extent in
the management of the value chain. This applies to all cornerstones of
TenCate’s business model. The technological innovation cornerstone is
the most obvious. It is only by continuing to deliver (disruptive and
sustaining) innovations in technological and technical fi elds that
TenCate will be able to guarantee its continuity as a technology group
and maintain sustainable development.
CSR is the means by which TenCate integrates sustainability into its
business operations. TenCate uses numerous management systems
particularly to make corporate social responsibility visible, measureable
and controllable. These range from environmental management systems
(ISO certifi cations for quality, the environment and corporate social
responsibility) to fi nancial and non-fi nancial accountability on the
receipt of innovation funds and the awarding of sponsorship and
donations.
In the various value chains, TenCate plays an active part as a customer,
producer, supplier and co-operation partner in delivering sustainable
innovations in numerous fi elds. Open innovation and closed open
innovation are the keywords for the ‘new competition’: sustainable
cooperation. The theme of ‘sustainable procurement’ is also of growing
importance in specifi c market groups. As market leader, TenCate aims
to be among the front runners in industry in terms of both safety and
sustainability.
The future availability of essential natural resources (biodiversity)
remains an ever-growing concern for TenCate. The company aims to
keep control of developments by focusing on individual areas such as
an integrated environmental policy, the prevailing energy policy, the
progressive policy on emission allowances, effi cient and eco-effi cient
production, recycling and developing bio-based initiatives.
This approach is in line with the industry’s sector objectives. According
to the roadmap to 2030, by that time the technical textile industry must
be able to fulfi l the needs of customers and users in a fl exible and
sustainable way. TenCate has a leading position in the pursuit of this
objective. By already working further on groundbreaking technologies
and techniques for the processing of natural, synthetic, bio-based,
biologically degradable, recyclable or secondary raw materials, TenCate
will be increasingly able to manufacture biologically, chemically or
mechanically recyclable products using cleaner and more effi cient
production techniques. TenCate’s technology road maps and product
road maps in particular chart the direction of future sustainable
innovations.
The corporate CSR team – which reports to the Executive Board –
specifi es the corporate objectives and the CSR programme each year.
The objectives and results are assessed with the management and
group managements as far as possible on a quarterly basis. If
necessary, the group managements make adjustments to the
implementation.
DEVELOPMENTS IN 2012
TenCate limited the environmental risks to the best of its ability during
the 2012 reporting year. The group managements received worldwide
support from the CSR team with initiatives and projects on corporate
social responsibility. TenCate played an active role worldwide in 2012
by means of sponsorship, donations and participation in activities in
numerous projects related to or aimed at corporate social responsibility.
Full details can be found on the annual report dynamic website (www.
tencateannualreports.com) and a list of activities appears on TenCate’s
corporate website (www.tencate.com) under CSR projects.
TenCate provided sponsorship during the reporting year for a number of
sporting events, around ten student teams by providing composites and
protective materials, dozens of organisations, including veterans’ and
fi refi ghters’ support associations, and a large number of events in local
communities – partly through volunteer work. In September 2012, with
a view to the 2014 Hockey World Cup, TenCate Grass became an offi cial
partner of the Dutch National Hockey Association (KNHB) for at least
four years.
In Europe, TenCate played an active part in around 20 innovation
projects centred on sustainability and safety during the reporting year.
A full list can be found on the TenCate website. TenCate was also
involved in numerous national and international committees during the
year, including the European Technology Platform, Euratex, Modint and
IAFI. In Europe, TenCate has been working with a number of universities
over the past decades, including Delft University of Technology, the
University of Twente and Saxion University of Applied Sciences in
Enschede, the Netherlands.
44 | Royal Ten Cate Annual Report 2012 | BUSINESS OVERVIEW
>Corporate information
All TenCate market groups in Nijverdal, the Netherlands, implemented
the CSR Performance Ladder level 3 in 2012. The fi rst three of the four
market groups were certifi ed independently for corporate social
responsibility in the second half of the year: Protective & Outdoor
Fabrics by Bureau Veritas, TenCate Advanced Composites by LRQA and
TenCate Grass by DEKRA. The TenCate Geosynthetics market group in
Nijverdal was certifi ed for CSR 2013 by DEKRA at the beginning of
2013.
The CSR Performance Ladder is built around three core components
based on the international CSR guidelines (ISO 26000). In the fi rst place
the certifi cate imposes requirements on the management system of
each market group with regard to the introduction and development
of corporate social responsibility. Stakeholder management and CSR
indicators are guaranteed by procedures and monitoring of changes.
Stakeholders’ interests are also demonstrably taken into account.
Every market group reports to them regularly on CSR matters. The most
relevant of no fewer than 33 CSR indicators (subdivided into seven core
CSR themes, the same as in ISO 26000) were also incorporated in the
CSR management system for each market group. CSR Performance
Ladder level 3 certifi cation also requires the market group to involve
indirect as well as direct stakeholders in the company’s activities. This
underlines the value chain management which the Group strives for on
the basis of the TenCate business model. The CSR certifi cation is based
on at least one of the ISO 14001 or ISO 9001 certifi cation standards.
Work was carried out in 2012 on the implementation of product
ecotools in the four market groups in Nijverdal. For TenCate Protective
& Outdoor Fabrics, TenCate Geosynthetics and TenCate Grass, the
existing industry tool for consumer textiles was adapted to technical
textiles, i.e. protective fabrics, geotextiles and synthetic turf. In the
case of composites, the adaptation has not yet been completed owing
to the specifi c nature of this material. The product ecotools are used to
determine the CO2 footprint of a growing number of TenCate products.
This had already been done for TenCate Geotube® solutions, partly to
maintain a competitive offering.
>‘A series of wearing trials and tests were conducted
before ThyssenKrupp Steel Europe switched to buying
protective clothing based on TenCate Tecapro®. TenCate
Tecapro® met the requirements in every case. The fabric
provides the right solution for personnel exposed to a
range of risks and deployed at various locations. On the
basis of TenCate Tecapro® fabric we offer our employees
multifunctional work clothing that protects them, for
example, against splashing of molten metal, sparks and
chemicals. The work clothing is also antistatic.’
- Christine Durek, safety expert,
ThyssenKrupp Duisburg
Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT | 45
Business environment 46
Stakeholders 47
Materiality matrix 48
SWOT analysis 50
Risk management 52
BUSINESS CONTEXTBusiness Context describes and explains the environment in which TenCate operates
46 | Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT
TenCate operates in growth markets which show growth over the longer
term. Temporary lags in growth may occur as most markets are based
partly on the availability of government budgets. Markets are also
subject to fl uctuation on the demand side due to the concentration
or postponement of projects. TenCate’s main market themes are based
on requirements for safety and protection and on solutions related
to environmental requirements. These themes provide market focus
for the company. They are also high on the political agenda.
GOVERNMENT BUDGETS
Dependence on government budgets has led to increased uncertainty in
recent years with regard to independent market developments and has
made it diffi cult to estimate trends in revenues. The markets in which
TenCate operates are affected by certain long-term trends. These may
be interrupted temporarily. Large projects may also be entered into
which obscure visibility on organic trends. The revenue fl uctuation
which may result from this is inherent in the markets in which TenCate
operates. TenCate endeavours to mitigate these uncertainties by means
of its own fl exible organisation and by outsourcing production.
TenCate has also given greater importance to the development
of industrial markets. Examples are those for protective clothing
(TenCate Tecasafe™ Plus) and composites (including automotive),
as well as new markets for geosynthetics (e.g. mining).
TenCate has also achieved growth in the emerging markets of Asia
and South America in recent years. New industrial partnerships were
entered into in 2012 with a view to accelerating growth and hence
reducing dependence on revenues driven by government budgets.
SUSTAINABILITY
Sustainability is an increasingly important aspect of the markets in
which TenCate operates. Not only are governments increasingly using
the expression ‘sustainable procurement’, but industrial partners too
are making ever greater demands. This is exemplifi ed by the fact that
the automotive composites market, which is new to TenCate, is
increasingly being driven by the need to bring a sustainable mobility
concept to the market. This also makes demands in terms of sustainable
production processes, recycling, sustainable energy consumption and
the CO2 footprint. TenCate has deliberately embraced this trend, since it
will impose higher standards (more sustainability) on the required
materials. New developments will be necessary in the years ahead both
on the demand side and in production processes to address this trend.
However, the development process will be a gradual one requiring a
worldwide approach in all sections of the company. TenCate is keeping
this subject high on the agenda.
Business environment
TenCate welcomes political heavyweights
TenCate welcomed two heavyweights from the Dutch
political scene in July 2012. On Monday 2 July the
outgoing fi nance minister Jan Kees de Jager visited
TenCate Advanced Composites. A week later he was
followed by Diederik Samsom (picture, left),
parliamentary party chairman and political leader of
the Dutch Labour Party. He visited TenCate Advanced
Composites and TenCate Grass. Both showed
particular interest in the production process and the
applications for the materials. The subjects discussed
also included innovation, market developments and
competition with China. Judging by the positive
reactions from Jan Kees de Jager and Diederik
Samsom, the working visits were successful, leading
to greater mutual understanding and knowledge.
Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT | 47
Within TenCate the stakeholder management supports the organisation
in achieving its strategic goals. By informing and infl uencing both
external and internal stakeholders, TenCate aims to initiate a dialogue
and create and maintain constructive relationships. The company does
this by effi ciently managing the expectations and experiences of the
stakeholders involved.
DIALOGUE
TenCate again maintained intensive contacts with stakeholders of the
company in 2012. In the United States, contacts with the US
government were concentrated on the ministries of infrastructure and
defence, with the Cohen Group assisting TenCate’s lobbying offi ce in
Washington. In Europe and the United States, presentations were given
at roadshows for fi nancial stakeholders, such as investors, analysts and
banks. The annual general meeting of shareholders was held last
year in the business club of Heracles Almelo. In Asia the business
development department was particularly active in strengthening
relations with both business partners and local authorities. In the
Middle East, the Cohen Group assisted TenCate in pursuing the same
objectives. In the Netherlands in particular, regular contact was
maintained with trade unions and the central works council. TenCate
served on many committees in 2012 aimed at establishing open
innovation and partnerships and enabling them to fl ourish, with
technical innovations once again having a central role. Intensive
contacts were maintained with suppliers and customers in the value
chains of the market groups. Fundamental work was carried out on
image and reputation management by means of end-user marketing
and an active media policy.
Overview of stakeholders
Key stakeholders of TenCate
Employees
and representatives
Universities
and institutes
SuppliersPartnersCustomers
Governments
and departments
Shareholders and
fi nancial relations
Media, policymakers and
industry organizations
48 | Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT
Materiality matrix
Important for TenCate
Impo
rtan
t for
sta
keho
lder
s
+ ++
+++
■ Innovation (management)
■
aandeelhouders
■ Critical mass and leading positions in worldwide niche markets
■ Competition advantages
■
■
■
■
■
Financial management
Profit growth
Profit margin
Debt ratio
Working capital
Debtor policy
■Cost control
■Economies of scale
■Risk management
■Brand awareness / image
■Sustainable investments
■Relation management
■ Lobbying
■Governance
■
■Management developmentTalent development
■Well-being and safety personnel
– Sustainability policy
Quantitative data
Code of conduct
Stakeholder dialogue
Sharing of knowledge
Training and education
Production efficiency
■
■
■
■
■
■Sponsoring
■Cooperation with local environment
■ Value chain management
■ Spread distribution / revenu
■ Balanced product portfolio
■ Customer satisfaction
■ Customer intimacy
■ Knowledge positions and intellectual property
■
Value creation for shareholders
■
■
Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT | 49
The materiality matrix comprises material (relevant) factors which
affect the performance of the TenCate organisation. It establishes a
connection between TenCate’s strategic goals, value proposition and
governance model and their infl uence on both the business environment
and business operation. The greater the effect the subject has on both
society and business operation, the greater the materiality.
The materiality matrix is produced by plotting internal perceptions
against the external fi ndings of stakeholders.
Material factors are plotted on the horizontal axis in respect of their
importance to the TenCate organisation itself, such as sustainability
policy and innovation management. These factors are plotted on the
vertical axis in respect of their importance to stakeholders, such as
customers, shareholders, suppliers and employees. By associating
a relative value with these factors, it is possible to see which
materialities are most relevant and where TenCate is working to
improve performance and intensify the dialogue with stakeholders.
The matrix is used as a management mechanism in relation to the
chosen critical key performance indicators referred to on page 19.
This approach helps in determining the most relevant focal points for
sustainable business operation.
50 | Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT
The SWOT analysis is a permanent part of the strategic planning of
each market group. The SWOT analysis included in the annual report is
a translation of this analysis at group level. The risk policy of each
market group is concentrated primarily on combinations of
organisational weaknesses and external threats (risk box). The Group’s
strengths are concentrated primarily on the unique characteristics
whereby the company can successfully implement its Vision, Mission
and Strategy. These characteristics are summarised below under
‘Strength of TenCate’ and fl ow directly from the key value drivers (see
page 25). The improvement points stated here are a summary of the
observed internal weaker points of the organisation.
THE STRENGTH OF TENCATE
■ Innovation: the ability to use internal synergy by combining
knowledge and skills on an extremely broad technological basis.
TenCate is also well positioned to enter into cooperation with
external partners (co-creation), in order to offer new solutions and
accelerate time to market.
■ Cost leadership: TenCate has leading market positions and is able to
control costs through economies of scale. TenCate also has a fl exible
organisation and increasingly considers the outsourcing of all or part
of production.
■ Product differentiation: TenCate has a strong brand position in
professional markets. Products meet the highest functional
standards. Attractive business cases are used to demonstrate that
TenCate materials genuinely make the difference.
■ End-user marketing: TenCate is one of the few players in the
technical textile industry to cover the entire global market. TenCate
can respond to a wide range of functional requirements of user
groups in local niche markets.
IMPROVEMENT POINTS
■ Strengthening of the marketing and sales organisation, with
a greater focus on markets which can generate new revenues in
the relatively short term.
■ Constant attention to be paid to strengthening the local organisation
in emerging markets.
■ Overall performance of TenCate Grass: increased effectiveness of
marketing and sales, and streamlining of the product offering with
a focus on system characteristics rather than the characteristics of
individual components.
■ Focus on revenues and results at Xennia Technology through the
creation of a sustainable business model.
OPPORTUNITIES
■ Business development is more embedded in the whole organisation.
This leads to the systematic development of new markets, such as
the market for automotive composites, the interior market
(composites) for aircraft, tooling composites, the development of a
business model for the TenCate ABDS™ active blast countermeasure
system and the Water & Environment market (TenCate
Geosynthetics).
■ As a result of the extensive damage caused to local infrastructure
by natural disasters, there is a growing awareness of the need for
better protection, even though the projects may prove costly to
society. There is growing demand for control of safety risks.
■ Emerging markets still lag behind in terms of standards and
specifi cations in some fi elds. However, these markets are largely
prepared to use modern technologies, enabling them to make up
any lost ground.
■ An increasing focus on environmentally friendly solutions offers
opportunities for a number of system solutions and materials,
including lightweight products, supplied by TenCate.
THREATS
■ Continuing tightness of government budgets.
■ The decrease in the operating result in 2012, partly due to
underutilisation of production capacity, has temporarily put pressure
on the debt ratio. TenCate aims to keep its debt ratio well below 2.5.
The debt ratio at the end of 2012 was 2.55.
■ Although the threat from new producers of synthetic turf fi bres has
diminished, partly as a result of the current market conditions, the
current market as a whole is threatened by the readiness of local
authorities to concede on quality in favour of low prices for synthetic
turf systems. The sports market has consequently taken on the
characteristics of an outdoor carpet market. In many cases the
specifi c sporting performance and associated sustainability
requirements are being overlooked.
■ The decrease in the number of projects, combined with low prices in
the project market, is putting the entire synthetic turf sector under
fi nancial pressure. This may lead to a considerable contraction of
the sector.
SWOT analysis
Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT | 51
RISK BOX
On the basis of the above SWOT analysis, the risk policy on a strategic
level can be summarised as follows:
■ Government expenditure in existing markets is expected to remain
under pressure in 2013. TenCate will strengthen its organisation in
marketing and sales and shift the focus to new product-market-
technology combinations to prevent further pressure on revenues
and results.
■ Product differentiation is aimed partly at cost advantages for
end-users, as a result of which advantages will arise elsewhere
which will lead to cost savings. These advantages are included in
the overall value proposition.
■ Acquisitions must make an immediate contribution to the result.
■ Tight control of working capital combined with logistics
improvements, in order to maintain and/or increase delivery
reliability.
■ Prudent credit control policy having regard to the fi nancial
weakening of the market.
Prepregs for James Webb
High-quality composites from TenCate Advanced
Composites in Fairfi eld (California, United States) are
being used in the construction of the solar shield of
the James Webb space telescope, the world’s largest
astrophysical observatory.
The high-quality composites used for the tubes or
masts of the solar shield are more than twice as rigid
as advanced composites for commercial aircraft.
TenCate Advanced Composites USA is the leading
supplier of composite prepregs to the North American
satellite industry. TenCate composites are used in
almost all Western satellite programmes.
The materials are non-conductive, light, rigid and
resist extreme temperature differences.
52 | Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT
Risk management
TenCate operates worldwide in different markets and therefore has to
contend with a variety of risks. TenCate aims to identify and control
these risks as early as possible. Risk control models have therefore
been developed, which are regularly updated by and discussed with
the group management. The main risks and the applicable risk control
models are described briefl y below.
A full description of the risk management can be found on the
TenCate website (www.tencate.com/nl/corporate-governance).
STRATEGIC RISKS
In order to assess the strategic risks, TenCate uses its own business
model based on four cornerstones. This enables TenCate to clearly
understand the strategic position of a business and adjust its course on
that basis. A second model used is the SWOT analysis. This analysis is
used as a basis for agreements with the management on measures to
reduce risks and identify opportunities in the markets.
MARKET RISKS
The major risk factor in demand for TenCate products is government
expenditure. By building fl exibility into cost structures, it is possible
to a certain extent to offset the consequences of any drop in demand.
In 2012 the degree of fall-off in defence orders, particularly in the
United States of America, was such that it could not be offset to a
suffi cient extent to maintain profi tability.
OPERATIONAL RISKS
TenCate’s organisation strategy is based on a decentralised model.
The managements of market groups and operating companies are
controlled on the basis of a regular planning and control cycle.
Each operating company has its own systems for control and
transaction processing in the main operating processes. Information
security and back-up procedures are followed to minimise the risk of
disruption to these systems.
ENVIRONMENTAL RISKS
TenCate’s environmental policy is based on limiting any impact on
the environment as far as possible. Both the holding company and the
managements of operating companies carry out regular audits and take
measures to avoid environmental risks. Work also started in 2012 on
quantifying the use of fossil raw materials, energy and waste in a
context of corporate social responsibility.
LEGAL AND TAX RISKS
TenCate is involved in various legal proceedings resulting from normal
business operations. The progress of these proceedings is monitored
continuously. A summary is discussed in the fi nance committee of the
Supervisory Board twice a year.
FINANCIAL RISKS
The fi nancing of the company is for the most part centralised through
corporate treasury. The main fi nancing source is the € 450 million
syndicated loan arranged in December 2010. The main covenant
concerns the debt / EBITDA ratio. In view of the specifi c seasonal
pattern in TenCate’s fi nancing requirement, quarterly debt / EBITDA
ratios have been agreed. That substantially reduces the risk of a breach
of covenant.
By actively managing its working capital and cash fl ow, TenCate was
suffi ciently able to absorb a sharp fall in EBITDA in 2012 compared to
2011. The debt / EBITDA ratio over the entire year consequently
remained well above the covenants.
Since a substantial part of TenCate’s assets are intangible (principally
goodwill), an impairment test is carried out on these assets at the time
of the fi rst-half report and at the year-end. This is shared with the
Supervisory Board and the external auditor. The values of the intangible
assets are estimated on this basis. This did not result in any impairment
charge in 2012.
The risk of an interest rate rise in the subsequent years is hedged in
principle to various percentages, taking account of expected interest
rate trends. The effect of changes in the value of fi nancial instruments
on the company’s result is mitigated as far as possible by the use of
hedge accounting.
With regard to currencies, TenCate draws a distinction between
competition, transaction and translation risk. The basic principle is that
competition risk is hedged over the subsequent six months by means of
options. The foreign currency transaction risk is hedged by means of
futures or options. The translation risk on the results of subsidiaries
outside the eurozone is offset where possible internally by
euro-denominated revenues of subsidiaries outside the eurozone.
The principles are regularly assessed and amended where necessary.
Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT | 53
TenCate has placed the pension provision for Dutch employees with
Stichting Pensioenfonds Koninklijke Ten Cate nv. The pension fund has
taken measures to reduce the risk profi le as part of its investment
policy. For the valuation of pension liabilities TenCate uses the OCI
method, which provides a clearer view of changes in pension liabilities.
The decrease in the discount rate in 2012 compared to 2011 resulted in
a reduction of € 18 million in TenCate’s shareholders’ equity under the
OCI method.
RISK MANAGEMENT AND CONTROL SYSTEMS
A whistleblowers scheme and a complaint scheme enable employees to
inform the company management of any undesirable situations.
It is important to maintain direct contact between the Executive Board,
group managements and directors of operating companies. Extensive
monthly reports are fi led and the performance, results, outlook and
certain risk management aspects are discussed each quarter. The risk
management also forms part of the consultations with the fi nancial
committee of the Supervisory Board.
All managers and controllers sign a letter of representation twice a year
declaring their compliance with fi nancial reporting / internal control
requirements.
EVALUATION OF RISK MANAGEMENT
AND CONTROL SYSTEMS
The Executive Board is of the opinion that:
■ the risk management and control systems provide reasonable
assurance that the fi nancial reporting is free of material
misstatements
■ the risk management and control systems have operated correctly in
the reporting year
■ there are no indications that the risk management and control
systems will not operate correctly during the current year
However well designed the internal risk management and control
systems are, they can never provide absolute certainty that objectives
in the fi eld of strategy, operation, reporting and compliance with laws
and regulations will always be achieved. When taking decisions,
TenCate is mindful that:
■ human errors of judgement may arise
■ cost-benefi t assessments must constantly be made when assuming
risks and taking control measures
■ human failings and even simple errors or mistakes can have major
consequences
■ conspiracies by offi cials can lead to circumvention of internal control
measures
■ the management of parts of the company can permanently or
temporarily negate agreements made with the Executive Board
Risk
Strategic risks ■ TenCate business model ■ SWOT analyses
Market risks ■ Flexible cost structures
Operational risks ■ Decentralised organisation
(network structure) ■ Planning and control cycles
Environmental risks ■ Regular audits and measures ■ Critical key performance
indicators
Legal and tax risks
■ Legal quality control ■ External advice or support
(including trade mark agency, patent agency)
Financial risks ■ Periodic monitoring and
adjustment based on forecasts
General / other risks
■ Whistleblowers scheme ■ Employee complaint scheme ■ Management compliance
statement
Risk management TenCate
Identifi cation and control
54 | Royal Ten Cate Annual Report 2012 | BUSINESS CONTEXT
>Risk management
This statement should not be interpreted as being a statement in
accordance with the requirements of section 404 of the Sarbanes Oxley
Act in the United States of America, which does not apply to Royal Ten
Cate.
Energy conservation in Dubai
Energy management and environmental protection are
receiving increasing attention in the Middle East and
particularly the United Arab Emirates. It is clear that
the current production capacity for energy and water
will not be suffi cient to meet future needs. With this in
mind, TenCate Grass in Dubai has launched a range of
green initiatives to make greater use of natural energy
sources, save on electricity and further limit the impact
on the environment. For example, the installation of a
solar panel system to preheat process water provides
a very reliable, free source of green energy. That
means a saving of over $150,000 per year and
eliminates around 150,000 kg of CO2 emissions.
Royal Ten Cate Annual Report 2012 | GOVERNANCE | 55
Executive Board
Supervisory Board
Report of the Supervisory Board
Corporate governance
56
57
58
60
GOVERNANCEIn Governance the company sets out the management and supervision arrangements within TenCate
56 | Royal Ten Cate Annual Report 2012 | GOVERNANCE
Information as at 1 January 2013
L. de Vries (1951), President and Chief Executive Offi cer
Mr De Vries has been a member of the Executive Board since
October 1998 and Chairman of the Executive Board since August 2000.
Previous employers:
■ Wilma Nederland
■ Wilma Vastgoed
■ Holec Nederland
Other activities:
■ Member of the Strategy Board of Innovation Platform Twente,
the Netherlands
B.J.H. Cornelese (1964), Chief Financial Offi cer
Mr Cornelese has been a member of the Executive Board since
April 2011.
Previous employers:
■ Price Waterhouse Nederland
■ Vitatron nv
■ Beiersdorf nv
■ Smiths Food Group bv
■ PepsiCo International
■ Biomet Inc.
Executive Board
Royal Ten Cate Annual Report 2012 | GOVERNANCE | 57
Information as at 1 January 2013
Supervisory Board
J.C.M. Hovers (1943) Chairman 1) 2)
Commenced in offi ce 2008
End of current term 2016
Chairman of the Supervisory Board of Plieger NV
Chairman of the Supervisory Board of Smeva B.V.
Non-executive board member of Teleconnect Inc
Member of the Supervisory Board of Randstad Groep Nederland bv
Former Chief Executive Offi cer of Stork NV and OCE NV
P.P.A.I. Deiters (1943) Deputy Chairman 2) *
Commenced in offi ce 1998
End of current term 2014
Member of the Supervisory Board of HVEG-Fashion Linq B.V. Amersfoort
Member of the Supervisory Board of Tootal B.V.
Consultant to the European Bank for Reconstruction and Development (EBRD)
Former director of Berghaus International Fashion
E. ten Cate (1945) 1) *
Commenced in offi ce 2004
End of current term 2016
Director of Bank ten Cate & Cie N.V.
Chairman of the Supervisory Board of Hydratec Industries N.V.
Chairman of the Supervisory Board of Rijksmuseum Twenthe
Member of the Supervisory Board of Medisch Spectrum Twente
R. van Gelder BA (1945) 1) 2)
Commenced in offi ce 2010
End of current term 2014
Chairman of the Supervisory Board of Atlas Services Group NV
Vice-Chairman of the Supervisory Board of SBM Offshore N.V.
Member of the Supervisory Board of Heijmans N.V.
Member of the Advisory Board of Value Enhancement Partners (VEP)
Chairman of the Association of Securities-Issuing Companies
Former Chief Executive Offi cer of Koninklijke Boskalis Westminster N.V.
and Heijmans N.V.
All members of the Supervisory Board are of Dutch nationality.
1) Member of the Financial Committee.2) Member of the combined Remuneration, Selection and Appointments
Committee.* Chairman.
From left to right E. ten Cate, J.C.M. Hovers, P.P.A.I. Deiters and R. van Gelder
58 | Royal Ten Cate Annual Report 2012 | GOVERNANCE
ANNUAL REPORT
We hereby present the 2012 annual report as prepared by the Executive
Board, incorporating the fi nancial statements. The fi nancial statements
have been audited by KPMG Accountants NV and were discussed with
the Executive Board on 28 February 2013, in the presence of the auditor.
The unqualifi ed auditor’s report is included in this report in ‘Other
information’.
We are of the opinion that the annual report fulfi ls the transparency
requirements and forms a good basis on which the Supervisory Board
can account for its supervision.
We propose that you adopt the fi nancial statements, approve the
dividend proposal and grant discharge to the Executive Board in respect
of its policy and to the Supervisory Board in respect of its supervision.
COMPOSITION
At the latest annual general meeting of shareholders held in April 2012,
Mr Van Vught retired as a member of the Supervisory Board and
received expressions of sincere gratitude. His successor will be
proposed at the annual general meeting of shareholders of April 2013.
SUPERVISION
The Supervisory Board held plenary meetings with the Executive Board
on seven occasions in 2012. It also met independently on two occasions.
The meetings discussed the composition and performance of both the
Executive Board and the individual directors. This assessment took
place on the basis of a written survey completed by the individual
supervisory directors and discussed by the full Supervisory Board.
The Supervisory Board also assessed its own performance, as well
as that of the committees and the individual supervisory directors.
Particular attention was devoted to subjects such as the method of
compliance with the Corporate Governance Code, risk management,
remuneration policy, integrity and transparency. Mr Van Gelder was
unable to attend two meetings due to illness.
During the joint meetings, the Supervisory Board dealt with subjects
such as the strategy of the sectors within TenCate, the SWOT analyses,
risk management, the valuation of TenCate’s balance sheet and the
developments in the recent acquisitions. TenCate’s fi nancial results
were discussed each quarter. The fi rst-half fi gures for 2012 were
discussed in the presence of the external auditor, KPMG. Particular
attention was devoted each quarter to TenCate’s debt, investments
and working capital. Other subjects included the budgets for 2013 and
developments in government and defence budgets in the United States
of America and developments in the Grass group and at Xennia
Technology.
Supervisory Board representatives also attended all consultative
meetings of the central works council. They participated in the
discussions and took note of the activities and events within the
company.
CORPORATE GOVERNANCE
The Supervisory Board and the Executive Board endorse the principles
of the Corporate Governance Code. The company applies this code
almost in full. The only variations from the code within Royal Ten Cate
concern primarily the size and nature of the company. These variations
and the associated interpretations better refl ect TenCate’s operating
methods. The variations applied by TenCate can be viewed on the
company’s website.
INDEPENDENCE
All members of the Supervisory Board, with the exception of Mr Deiters,
are independent within the meaning of the best-practice provisions
of the Corporate Governance Code. Mr Deiters is deemed to be
non-independent within the meaning of the Corporate Governance
Code, on account of a supervisory directorship which he holds in a
subsidiary.
No TenCate shares or options are held by the members of the
Supervisory Board.
COMMITTEES
The Supervisory Board has two committees: the fi nancial committee
chaired by Mr E. ten Cate and the combined Remuneration, Selection
and Appointments Committee chaired by Mr P. Deiters. Their task is
to analyse subjects within their specifi c focal areas and to prepare
decisions to be taken in the plenary meetings of the Supervisory Board.
In 2012 Mr F. van Vught was succeeded as chairman of the combined
Remuneration Committee by Mr P. Deiters.
Financial Committee
The Financial Committee met in plenary sessions on four occasions in
2012 with the CEO and the CFO of TenCate. As preparation for the
regular meetings of the full Supervisory Board, these meetings
discussed in detail the 2011 annual fi gures, the 2012 fi rst-quarter
fi gures, the 2012 half-yearly fi gures, the 2012 third-quarter fi gures
and the budget for 2013.
Report of the Supervisory Board
Royal Ten Cate Annual Report 2012 | GOVERNANCE | 59
Consideration was also given to a number of specifi c subjects during
the meetings. Particular attention was devoted to the risk management
system and risk control, the impairment test calculations and
conclusions, the IT strategy, trends in working capital and debt, the tax
position particularly in the Netherlands, the policy with regard to the
audit service, the management letter from the external auditor and the
follow-up to his recommendations.
Combined remuneration, selection and appointments committee
The Remuneration Committee met on three occasions in 2012,
considering matters such as the assessment of the current
remuneration policy. The aim was to bring the current remuneration
policy for the Executive Board more into line with the remuneration
market for companies of a similar type and size. In the view of the
Supervisory Board, this would take proper account of the quality of
the performance rendered. On this basis it was decided to leave the
Executive Board’s remuneration policy unchanged for the time being.
CORPORATE SOCIAL RESPONSIBILITY
The Supervisory Board is delighted at the energetic way in which the
Executive Board has developed policy on corporate social responsibility,
as evidenced in this annual report.
REMUNERATION POLICY
PRINCIPLES OF THE REMUNERATION POLICY
The Supervisory Board of Royal Ten Cate applies a remuneration policy
in respect of the company’s management, based on the following
principles:
■ The remuneration of the Executive Board must enable the company
to attract and retain senior managers
■ The remuneration policy must conform to the company´s corporate
governance policy
■ The remuneration must refl ect the strategic and fi nancial objectives
and be to a large extent performance-oriented, with a good balance
between short and long-term results and objectives
■ The remuneration must not include any incentives which give rise to
behaviour directed towards personal interests that confl icts with the
company’s interests
■ A scenario analysis is drawn up each year with regard to the
possible outcomes of the remuneration policy
REMUNERATION REPORT
The 2012 remuneration report, including the plan to draw up a new
remuneration policy, has been posted on the company’s website under
Corporate Governance Documents.
The posts of CEO and CFO of Royal Ten Cate were based on Hay levels
in 2012. In the case of the CEO, Hay level 30 is applied. The variable
remuneration component payable for target-level performance is 50%
of the fi xed salary. This is also the maximum level. In 2012, Mr de Vries
received a variable salary component in respect of 2011 amounting to
50% of his fi xed salary. He was also granted 60,000 options with an
exercise price of € 24.67. The fi xed income received by Mr de Vries
remained unchanged in 2012.
For the CFO, the fi xed annual salary is set at Hay level 26. The variable
remuneration component payable for target-level performance is
40% of the fi xed salary. This is also the maximum level. In 2012,
Mr Cornelese received a variable salary component of 34% in respect
of 2011 (pro rata from April 2011). He was also granted 30,000 options
with an exercise price of € 24.67.
Mr J. Lock, the former CFO, was granted 10,000 options with an
exercise price of € 24.67 in 2012.
The remuneration of the Executive Board is stated in note 55.2 on
page 132 of this report.
COMPOSITION OF THE EXECUTIVE BOARD
The composition of the Executive Board remained unchanged in 2012.
The Supervisory Board would like to express its sincere gratitude to
the board and the employees of TenCate for their commitment and
performance during the particularly challenging 2012 fi nancial year.
Almelo, 28 February 2013
Supervisory Board
J.C.M. Hovers, Chairman
P.P.A.I. Deiters, Vice-Chairman
E. ten Cate
R. van Gelder
60 | Royal Ten Cate Annual Report 2012 | GOVERNANCE
The Supervisory Board and the Executive Board endorse the corporate
governance principles, in the form currently applicable to Dutch listed
companies operating internationally.
The corporate governance structure is based on the voluntary
application of the two-tier board structure. The main elements of this
are:
■ The fi nancial statements are adopted by the general meeting of
shareholders
■ Supervisory directors are appointed by the general meeting of
Shareholders on the basis of nominations by the Supervisory Board.
The profi le of the members of the Supervisory Board is fi rst
discussed at the general meeting of shareholders at the time of
adoption and on each subsequent modifi cation
■ The general meeting of shareholders and the works council can
recommend persons to the Supervisory Board for nomination as
supervisory directors
■ With an outright majority of votes, the general meeting of
shareholders representing at least one-third of the issued share
capital may reject the nomination by the Supervisory Board
■ The members of the Executive Board are appointed by the general
meeting of shareholders on the basis of a binding nomination by
the Supervisory Board
Full corporate governance documentation can be found on the TenCate
website, the report of the Supervisory Board appearing on page 58 and
the 2012 remuneration report, which can also be found on the TenCate
website.
ACT ON MANAGEMENT AND SUPERVISION
The Act on Management and Supervision came into force on 1 January
2013. The Act includes a provision on the balanced allocation of seats
among men and women on executive and supervisory boards.
The company’s allocation of seats does not comply with this provision.
The company will assess whether it is possible to achieve a more
balanced allocation in the future.
Corporate governance
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 61
Report of the Executive Board 62
Advanced Textiles & Composites Sector 66
Geosynthetics & Grass Sector 75
Other Activities Sector 82
PERFORMANCEIn Performance the company gives an account of the results achieved during the reporting year
62 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
FINANCIAL PERFORMANCE
Analysis of 2012 results by sector 2011 2012 Difference Organic
Of which
currency
Acquisition /
divestment
in millions of euros
Net revenues
Advanced Textiles & Composites 538.4 460.6 – 14% – 21% 4% 3%
Geosynthetics & Grass 525.9 518.7 – 1% – 8% 5% 2%
Other Activities 74.5 69.7 – 6% – 11% 5% 0%
1,138.8 1,049.0 – 8% – 15% 5% 2%
Operating result before amortisation (EBITA)
Advanced Textiles & Composites 70.3 23.5 – 67% – 70% 2% 1%
Geosynthetics & Grass 26.3 31.5 20% 10% 8% 2%
Other Activities 5.9 – 3.0 – 151% – 148% – 3% 0%
102.5 52.0 – 49% – 53% 3% 1%
Amortisation – 12.9 – 14.5
Operating result (EBIT) 89.6 37.5 – 58%
Net fi nancial expenses – 11.3 – 12.1
Pre-tax result 78.3 25.4 – 68%
Profi t tax – 18.7 – 8.7
Result from ordinary operations after tax 59.6 16.7 – 72%
Net result from associated companies – 1.3 – 0.3
Non-controlling interests 0.4 5.9
Net result 58.7 22.3 – 62%
Report of the Executive Board
EBITA margins 2011 2012
Advanced Textiles & Composites 13.1% 5.1%
Geosynthetics & Grass 5.0% 6.1%
Consolidated 9.0% 5.0%
Revenues declined by 8% to € 1,049 million in 2012. In organic terms,
the decline amounted to 15%. The decline in revenues was
concentrated particularly in the American defence markets.
Guidance had been given at an early stage that revenues from TenCate
Defender™ M products in the fi rst half of 2012 would not be comparable
to those of the previous year, due to the exceptional revenue growth in
the same period of 2011. The anticipated decline in revenues relating
to the US Army proved to be unexpectedly sharp in the second quarter,
making it impossible to meet the initial revenue forecasts, which were
based partly on indications from the US Army purchasing organisation.
This trend continued over the year. It emerged during the year that the
inventories held by the US defence sector were of such a level that
revenues later in the year also remained low.
Revenues from the American vehicle armour market for defence
projects also fell sharply, due to the postponement or cancellation
of new vehicle programmes. The consequences of the above
developments were particularly evident in the Advanced Textiles
& Composites sector.
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 63
The market for composites, mainly for aerospace-related applications,
continued to develop. TenCate Advanced Composites is increasingly
developing new markets, such as the automotive market. These offer
excellent prospects for TenCate, particularly due to the technology
positions the company has secured in both thermoset and thermoplastic
composites (TenCate Cetex®). These market positions have been
developed partly through acquisitions, an example being the acquisition
of PMC Baycomp in 2012.
The geosynthetics market group presented a positive picture in the fi rst
half of the year. The positive trend weakened during the year, however,
mainly as a result of political and economic uncertainties in the United
States of America. Severe restraint in government budgets gradually
put pressure on this market. As a result, this market group was less
able to offset sales decreases elsewhere in the company in the second
half of the year.
Revenues in the synthetic turf market showed a mixed picture. On the
one hand, growth was achieved in the company’s own downstream
activities as a result of increased market shares for market operators
related to TenCate. On the other hand, sales of synthetic turf fi bres
(upstream) fell in organic terms, partly due to a sharp contraction of
the synthetic turf market in southern Europe.
In the Other Activities sector, Xennia Technology recorded a
disappointing performance. A number of developments turned out not
to be suffi ciently technologically feasible on an industrial scale. Priority
was given to creating an earnings model providing an economic
foundation. The market focus was rationalised during the year, with
a total of € 2.7 million of non-recurring expenses being recognised.
The technological innovation in textile fi nishing remains a major focal
point. TenCate is expected to begin production using inkjet technology
in mid-2013. This offers new opportunities for the production of
high-grade technical textiles.
TenCate Enbi showed a stable trend, with growth being achieved
particularly in Asia.
NET RESULT
The net result decreased to € 22.3 million in 2012 (2011: € 58.7 million).
The decrease in the net result was due particularly to the unexpectedly
strong fall in defence orders in the United States of America for both
protective fabrics and armour composites, the intended discontinuation
of production in Thailand, reorganisation expenses in 2012 and the
loss-making activities of Xennia Technology.
COMPOSITION OF THE COMPANY
The following companies were acquired in 2012:
■ The interest in ABDS ApS was increased from 51% to 100% in
January 2012
■ PMC Baycomp, a company in thermoplastic composites, was
acquired in May 2012
REVENUES
Net revenues decreased by 8% in 2012. The decrease in organic terms
amounted to 15%. The increase in the strength of the US dollar against
the euro resulted in a positive currency effect of 5%.
The aforementioned acquisitions in 2012 and those completed in 2011
led to an acquisition effect of 2% on revenues.
Revenues in the Advanced Textiles & Composites sector declined by
14%. The decrease in organic terms amounted to 21%. The currency
effect and the effect of acquisitions/divestments amounted to +4% and
+3% respectively. The following activities contributed to this rise:
■ In the United States of America there was an unexpectedly sharp
fall of around US$130 million in defence orders
■ In aerospace the organic growth was 9%, driven by a rise in
revenues in aerospace in the United States of America.
The acquisition of PMC Baycomp contributed 8% to the total growth
of aerospace composites
64 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Report of the Executive Board
The revenues of the Geosynthetics & Grass sector declined by 1%
to € 519 million. The decrease in organic terms amounted to 8%.
The currency effect and the effect of acquisitions/divestments
amounted to +5% and +2% respectively.
■ The revenues of TenCate Geosynthetics declined in organic terms.
TenCate Geosynthetics USA in particular experienced the weakening
of demand in the second half of 2012
■ The Grass group recorded an organic decrease in revenues, driven
particularly by pressure on prices of yarns in a competitive market.
Downstream revenues in organic terms were comparable to those
of 2011
In the Other Activities sector (revenue decrease of 6%, with an organic
decrease of 11%), TenCate Enbi recorded almost unchanged revenues
compared to 2011. Xennia Technology recorded a decline in revenues
due to the partial fall-off of orders for the Chinese Market.
OPERATING RESULT BEFORE AMORTISATION
The operating result before amortisation (EBITA) declined by 49% to
€ 52.0 million. After adjustment for non-recurring items (€ 8 million),
EBITA declined by 41% to € 60.0 million. The non-recurring items
related to the intended discontinuation of production in Thailand
(– € 3.0 million), a writedown of TenCate Defender™ M inventory
(– € 3.0 million) and adjustments at Xennia Technology (– € 2.7 million).
Reorganisation provisions were also recognised for a total of
€ 2.6 million. The adjustment to the pension scheme had a one-off
positive effect of € 3.3 million.
In the Advanced Textiles & Composites sector, EBITA declined by 67%,
with a 70% organic decrease and a +2% rise due to currency effects.
There was also a small acquisition effect (+1%).
■ TenCate Protective Fabrics USA experienced a sharp decline in profi t
due to the large fall in orders for TenCate Defender™ M and the
one-off writedown of excessively high inventories of TenCate
Defender™ M built up in previous years
■ At TenCate Protective Fabrics Asia (joint venture), measures were
taken in anticipation of the closure of the company in the fi rst
quarter of 2013
■ In Space & Aerospace and Advanced Armour in Europe, the result
was comparable to that of 2011 on unchanged revenues
■ Space & Aerospace and Advanced Armour in the United States
recorded a lower result in 2012 than in 2011, as a result of the loss
of revenues from armour composites
In the Geosynthetics & Grass sector the result increased by 20%,
including a 10% organic rise and an 8% rise due to currency effects.
The acquisition effect was 2%. TenCate Geosynthetics and the Grass
group improved their results.
■ At TenCate Geosynthetics the operating result (EBITA) increased in
2012 despite an organic decrease in revenues. Margin improvement
and cost control contributed to an improvement in the result,
particularly in Europe and Asia
■ TenCate Geosynthetics in the United States of America recorded a
decrease in its result
■ At TenCate Geosynthetics in Europe and Asia, margin improvement
and cost control led to a substantial improvement in the result.
Emas Kiara, which was acquired in the fi rst quarter of 2011, has
been fully integrated into the existing TenCate Asia organisation
■ The result of the Grass group improved, mainly as a result of cost
control in the downstream activities
The Other Activities sector recorded a negative result of € 3.0 million.
The decrease in EBITA was due particularly to the loss-making activities
of Xennia Technology, including the recognition of € 2.7 million of
non-recurring expenses.
PERSONNEL COSTS
Personnel costs in 2012 declined slightly in organic terms compared to
2011. The currency effect on personnel costs represented a rise of 5%;
the acquisition effect represented a rise of 1%.
A personnel reorganisation was begun in May 2012 with the aim of
reducing the number of employees by approximately 450 (both in-house
and external employees). By the end of 2012, the number of employees
had been reduced by approximately 350. Further reductions are
expected in 2013.
TAXES
The tax charge rose from 24% to 34%. The increase in this rate was
due in particular to losses in countries where no deferred tax assets
are formed. After correction for the aforementioned one-off effects
(€ 8 million) on the result, the tax rate is 28%.
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 65
WORKING CAPITAL
The working capital decreased in 2012 compared to 2011 as a result of
the decline in inventories and debtors. The number of days of inventory
decreased by 11, while debtors in days remained unchanged on lower
revenues. This positive trend was partly offset by a lower level of
short-term liabilities.
in millions of euros 2011 days 2012 days
Balance at end of
previous year 223.9 80* 277.1 99*
Acquisitions/divestments 2.6 0.4
Organic increase/
decrease 42.1 – 39.3
Exchange rate
differences 8.5 – 0.8
Balance at end of year 277.1 99* 237.4 93
* Adjusted for comparison purposes.
INVESTMENTS
Investments were again restrained in 2012.
in millions of euros 2011 2012
Tangible fi xed assets 21.3 12.0
Development costs and other intangible assets 4.4 4.6
25.7 16.6
The corresponding depreciation amounted to € 37.1 million
(2011: € 35.0 million) and amortisation amounted to € 14.5 million
(2011: – € 12.9 million).
The main investment projects in 2012 were:
■ Development costs of TenCate Advanced Armor USA:
TenCate ABDS™ active blast countermeasure system
■ TenCate Geosynthetics Zhuhai: extruding machine
■ TenCate Protective Fabrics Nederland: digital fi nishing machine
■ TenCate Geosynthetics Asia: upgrade of non-woven line
CASH FLOWS AND FINANCING
In millions of euros 2011 2012
Result after profi t tax and associated companies 58.3 16.4
Depreciation 35.0 37.1
Amortisation 12.9 14.5
Other items 22.2 12.3
Cash fl ow before increase / decrease in
working capital 128.4 80.3
Increase / decrease in working capital – 46.4 38.3
Interest / taxes paid – 32.7 – 16.8
Cash fl ow from operating activities 49.3 101.8
Investments – 25.7 – 16.6
Divestments 3.4 0.3
Acquisitions / participating interests – 34.8 – 15.7
Other items – 0.7 – 1.4
Cash fl ow from operating
and investing activities – 8.5 68.4
Despite lower results in 2012 compared to 2011, the company’s cash
fl ow improved substantially. This was due particularly to a signifi cant
decrease in the working capital and a lower investment level than in
2011.
66 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
Market groups and market themes
Advanced Textiles & Composites Sector
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 67
KEY FIGURES ADVANCED TEXTILES & COMPOSITES
in millions of euros unless stated otherwise 2008 2009 2010 2011 2012
Revenues 481.0 397.3 448.4 538.4 460.6
Operating result before amortisation (EBITA 61.5 31.7 43.8 70.3 23.5
EBITA margin (%) 12.8 8.0 9.8 13.1 5.1
Operating result (EBIT) 52.9 27.0 38.6 64.7 18.5
Investments 11.7 4.2 4.5 8.3 9.4
Depreciation and amortisation 17.6 14.2 15.2 15.3 15.7
Net capital employed (year-end) 286.4 234.0 281.7 314.3 286.5
Number of staff years (year-end) 1,651 1,340 1,519 1,582 1,697
EBITA as percentage of net average capital employed 22.9 12.0 16.7 23.6 7.5
REVENUES AND RESULTS OF THE ADVANCED TEXTILES
& COMPOSITES SECTOR
The Advanced Textiles & Composites sector recorded a 14% decline in
revenues in 2012 to € 460.6 million (2011: € 538.4 million).
The decline in revenues was due in particular to the sharply lower sales
in the US defence market. This was refl ected in a steep fall in revenues
from protective fabrics (TenCate Defender™ M) and armour materials.
The anticipated decline in revenues related to the US Army proved
to be unexpectedly sharp over the year. There was also a reduction in
inventories held by the USA purchasing organisation.
The armour composites market in the United States of America and
Europe was sluggish, with a slowdown in project orders in the defence
markets. In the American market in particular, there was a substantial
decline in revenues. TenCate has concentrated on the development of
activities in vehicle armour in the past few years. TenCate’s systems are
increasingly integrated in vehicles (‘survivability systems’). The project-
linked nature of revenues is an inherent feature of these markets.
Overall, there were positive developments outside the defence market.
TenCate once again gained market share with products based on fi bre
blends. An optimum functional performance is achieved by combining
fi bres with different characteristics. There was a further increase in
revenues from safety fabrics (TenCate Tecasafe™ Plus) in the industrial
market (particularly oil and gas extraction) and the emergency response
market (fi refi ghting).
The combined revenues of the Space & Aerospace Composites and
Industrial Composites business units in the TenCate Advanced
Composites market group increased, partly through the acquisition of
PMC Baycomp and the continuing growth in aerospace composites.
The operating result of the Advanced Textiles & Composites sector
fell sharply as a result of low revenues in the US defence markets.
The operating result before amortisation of intangible fi xed assets
fell by 67% to € 23.5 million (2011: € 70.3 million). The EBITA margin
decreased to 5.1% (2011: 13.1%).
INDICATIVE BREAKDOWN OF REVENUES IN THE ADVANCED TEXTILES & COMPOSITES SECTOR
18%
17%
61%2011 201267%
15% 22%ProtectiveFabricsArmourCompositesSpace / Aerospace Composites
68 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Advanced Textiles & Composites Sector
PERFORMANCE OF TENCATE PROTECTIVE FABRICS IN 2012
Spending by the American defence market was very constrained during
the reporting year. The budget discussions (Budget Control Act) and the
presidential elections resulted in lower defence spending and
destocking effects in 2012. Sales of TenCate Defender™ M consequently
remain low. After the excellent revenue growth particularly in the fi rst
half of 2011, guidance had been given at an early stage that the
performance in the fi rst half of 2012 would not be comparable to that of
2011. The downward trend remained unexpectedly strong during 2012.
A positive factor was the increase in the number of applications for the
portfolio of TenCate Defender™ M products among various units of the
US Army. The geographic spread of revenues is also gradually
expanding. More countries started specifying TenCate Defender™ M for
heat- and fl ame-resistant protection of army units and elite troops in
2012. Revenues from TenCate Defender™ M outside the United States
of America consequently group positively. The countries which have
placed orders for TenCate Defender™ M now include Australia, Canada,
India, Italy, Sweden, Norway, the United Kingdom, Poland, the Czech
Republic and Brazil. With increased provision of fl ame-resistant
protection for armies in many countries around the world, this trend is
likely to continue. The international market potential is therefore strong.
Decision-making processes on the acquisition of new materiel in
defence markets depend on the adoption of fi nal specifi cations and are
bound up with government budgets. Nevertheless, the United States
of America will remain by far the most important market in the near
future, despite the expected budget cuts.
The same trend towards increased protection and/or wearing comfort
is being seen in police and fi re brigades. Revenues from TenCate
Defender™ M outside the defence market also increased as a result
of applications of the product for police and fi re brigades.
PROTECTIVE & OUTDOOR FABRICS
REVENUES BY GEOGRAPHIC REGION
Asia Pacific
EMEA
Americas
5%
30%
65%
REVENUES BY CUSTOMER GROUP (INDICATIVE)
Governmental
Non-governmental43%
57%
REVENUES BY MARKET THEME (INDICATIVE)
Defence
Personal protection
67%
Sports & leisure
28%
5%
>‘The best proof of a good performance is always a
satisfi ed customer. At Amsterdam-Amstelland, one of
the world’s best fi re brigades, teamwork was the key to
success. In order to develop a fi refi ghters suit which best
meets the requirements, the product developers at Lion
worked closely with our partner TenCate. TenCate’s
expertise and laboratory capacity in Nijverdal enabled us to
carry out a number of additional tests in a short period and
then to offer the best possible solution. We are delighted
to be the joint partner of Amsterdam-Amstelland Fire
Brigade over the next eight years’
- Timo Czech, Managing Director, Lion Apparel
Deutschland
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 69
The fi refi ghting market in the US, which is very important for TenCate,
remained sluggish in 2012 as a result of budget cuts among local
authorities. TenCate is nevertheless ideally positioned to respond to
changing market demand, due to the increasing need for cheaper and
better solutions, such as the use of TenCate Defender™ M in protective
clothing. This product has patented, inherently heat- and fl ame-resistant
characteristics which will not wash out or wear off. It is ideal for use as
a thermal lining for fi refi ghters’ protective clothing.
The fi refi ghting market offers new opportunities for TenCate outside the
United States of America, and major successes have been achieved. In
the fi rst quarter of 2012, TenCate received a large order from the UK
producer FlamePro, for the supply of inherently heat- and fl ame-
resistant materials for fi refi ghters’ uniforms for the Shropshire Fire &
Rescue Service in the United Kingdom. The seven-year contract is for a
new lightweight system, TenCate Tecasystem™ Millenia 450, for use in
over 1,200 fi refi ghting suits. The fi rst 300 suits were delivered in
mid-2012.
At the end of October 2012, TenCate also received a substantial order
in the Netherlands for TenCate Tecashield®, in partnership with Lion
Apparel, to supply inherently heat- and fl ame-resistant materials for
the fi refi ghter uniforms of the Amsterdam-Amstelland Fire Brigade.
TenCate’s material essentially comprises the lightweight outer fabric,
thermal protection lining and reinforcements.
In the industrial sector too, TenCate is able to respond effectively to the
combination of wearing comfort, sustainability and safety. The demand
for TenCate Tecasafe® Plus products continued to grow favourably in
2012, with the oil and gas industry representing an important potential
market. Orders have now been received from leading operators such
as Shell, BP, Gazprom and Total. TenCate has expanded the European
product portfolio with new products which are also attracting a high
level of interest.
TenCate Tecasafe™ Plus has built up such brand awareness that it now
occupies a leading position in the global market for industrial safety
fabrics.
TenCate Outdoor Fabrics, which focuses on the leisure market,
experienced a stable revenue trend in 2012. It consequently retains its
leading position in a mature market for outdoor fabrics, including new
fl ame-resistant fabrics.
SUSTAINABILITY
The TenCate Protective Fabrics market group in the Netherlands was
certifi ed for corporate social responsibility in 2012. A number of
stakeholders in the value chain were involved in the implementation of
the CSR Performance Ladder at level 3 and regular dialogue is
conducted on good working practice. The Plan-Do-Check-Act cycle is
being implemented for all 33 CSR indicators over the next three years.
These indicators are classifi ed under one of the 7 core CSR themes from
the ISO 26000 guideline. This market group has drawn up a code of
conduct to be signed by the relevant suppliers in the value chain, aimed
at combating child labour, infringements of human rights and corruption
and to promote legal compliance with local laws and regulations.
This is fully in line with the ILO conventions and UN declarations.
Steel giant in multi-safe work clothing
Several thousand employees of the German steel
company ThyssenKrupp Steel Europe wear protective
work clothing based on TenCate Tecapro® fabrics.
It is suitable for many different departments and
workplaces. The wearing comfort and sustainability of
the clothing have been greatly improved with TenCate
Tecapro® fabric. That has made the degree of
acceptance of this clothing even higher. A high degree
of acceptance is essential. ThyssenKrupp Steel Europe
often has to issue three or four sets of work clothing to
each person. The quantities involved are therefore high
and substantial sums have to be invested.
70 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Advanced Textiles & Composites Sector
TenCate Protective Fabrics also installed new gas washers in Nijverdal
to further reduce odorous substances and organic components. Specifi c
departments have been trained in the handling of chemicals. The water
treatment system was optimised and the biogas installation was made
suitable for power generation during the reporting year. With the aid of
the product ecotool, work started on determining and lowering the
carbon footprint of protection products. This is part of the multi-year
CSR policy, under which many objectives have been formulated with
measurable KPIs. Finally, the PSA policy has been intensifi ed with a
focus on the internal code of conduct and the whistleblowers scheme
for employees.
Internal CSR campaigns for employees are being organised in this
market group at Nijverdal in 2013. The test setup for the ‘factory of the
future’ sustainable innovation project for digital fi nishing of protective
fabrics is moving into the next phase. In early 2013, a fi refi ghting
seminar will be organised as part of the end-user marketing in the
Netherlands, including workshops on optimum protection and correct
maintenance of protective clothing.
The joint production sites at Nijverdal-Noord have held the Authorised
Economic Operator (AEO) status granted by the Dutch customs authority
since 2012 due to their international trading. New training courses are
planned in 2013 for in-house emergency personnel in all market groups
at Nijverdal. Wearing trials will also be conducted in all market groups,
in anticipation of the replacement of the work clothing. A four-yearly
health examination (PAGO) will also take place among the employees at
Nijverdal.
INDICATIVE BREAKDOWN OF REVENUES OF TENCATE PROTECTIVE FABRICS USA
56%
37%
32%
2011 201226%
17%
1%
25%6%
Industrial
DefenseEmergency responseOther
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 71
PERFORMANCE OF TENCATE ADVANCED COMPOSITES
IN 2012
The TenCate Space & Aerospace Composites and Industrial Composites
market groups recorded revenue growth of 25% in 2012, partly as a
result of the acquisition of PMC Baycomp. Following on from 2011,
the production volume for the long-term Airbus A380, Airbus A350
and Boeing 787 programmes increased.
Relations with other aircraft manufacturers also developed positively.
The fi rst successful steps were taken towards a positioning in the
automotive sector. TenCate focuses mainly on aircraft components with
critical features, including with regard to safety.
TenCate Advanced Composites completed the acquisition of PMC
Baycomp in the second quarter of 2012. This acquisition offers TenCate
Advanced Composites a position in the growing industrial composites
markets. In addition to applications in the automotive market, these
could include medical and paramedical applications, the electronics
market, technical components and the sports market. PMC Baycomp has
innovative technologies in thermoplastic (unidirectional) composites.
The activities in the industrial composites market constitute a separate
organisational unit and will be further expanded.
PMC Baycomp and TenCate have complementary market positions in
thermoplastic composites. In addition to thermoplastics, TenCate has
an extensive portfolio of thermoset composites. This production is
currently concentrated in the United States of America. TenCate is thus
occupying a unique position.
In mid-2012, TenCate began market development of composites in
China. This is a large market, and the aerospace composites segment
that is of interest to TenCate is developing strongly.
Demand is growing for lightweight structures in hybrid and electric cars
for everyday use. This gradual process will take place by means of joint
development with partners who are suppliers to the automotive
industry, in close cooperation with the OEMs.
At the end of 2012, TenCate Advanced Composites successfully
qualifi ed carbon fi bre reinforced thermoplastic composites for a world-
leading automobile manufacturer. TenCate’s strategic focus in the fi rst
instance is on structural parts and other components which are crucial
for the integrity and safety of the vehicle.
SPACE & AEROSPACE COMPOSITES AND INDUSTRIAL COMPOSITES
INDICATIVE BREAKDOWN OF REVENUES OF TENCATE ADVANCED COMPOSITES
47%
56%
44%
2011 201253% Armour
CompositesStructuralComposites
REVENUES BY GEOGRAPHIC REGION
Asia Pacific
EMEA
Americas
7%
25%
68%
REVENUES BY CUSTOMER GROUP(INDICATIVE)
Governmental
Non-governmental32%
68%
REVENUES BY MARKET THEME (INDICATIVE)
Defence
Mobility
2%
98%
72 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Advanced Textiles & Composites Sector
PARTNERSHIPS
The European Thermoplastic Automotive Composites (eTAC) consortium
was offi cially launched in October 2012. eTAC is an initiative of DTC
Dutch Thermoplastic Components, KVE Composites, NLR Nationaal
Luchtvaart Laboratorium, VIRO and TenCate Advanced Composites.
These companies each have leading positions in their own fi elds in the
production and processing of fi bre-reinforced thermoplastic composites.
The aim is to promote the use of these advanced materials in the
automotive sector. The partners in eTAC have built up a successful track
record over the past decades in the aviation industry and aim to initiate
demand-driven projects in the automotive market.
During the reporting year, TenCate Advanced Composites North America
expanded the cooperation with 3M which had begun in 2010.
This cooperation has already considerably strengthened the partners’
positions, particularly in composites for the aerospace market. This
expansion provides an impetus for new applications for composites in
areas such as the aircraft and tooling markets (dies).
TenCate Advanced Composites and the German chemical company
BASF also entered a strategic alliance in 2012 to collaborate on the
development, production and marketing of thermoplastic composites
suitable for mass production of vehicles. The aim of this partnership is
to offer auto manufacturers tailor-made solutions for high-performance
composites structures, enabling this industry to further reduce the
weight and CO2 emissions of vehicles. The growing demand from the
automotive industry for composites for mass production requires the
rapid development of materials and production processes.
TenCate Advanced Composites joined the National Composites Centre
in Bristol (United Kingdom) in 2012. TenCate aims to cooperate with
major centres of expertise on research into an application of advanced
thermoplastic and thermoset composites.
AWARDS
TenCate is a progressive developer and producer of composites. Its
customers are leading operators in the aerospace market, which attach
great importance to the innovative capability and delivery reliability of
their suppliers.
CCS Composites in Fairfi eld (California, USA) – part of TenCate
Advanced Composites – received the Boeing Performance Excellence
Award 2011 at the beginning of 2012. Boeing presents this award
annually to suppliers who have delivered a superior performance.
This is particularly signifi cant due to the substantial investments which
TenCate made in production capacity in 2011. CCS Composites develops
and produces pressed components for the Boeing V-22 Osprey
programme and the F-18 programmes. TenCate also supplies low
dielectric composites for radomes in the Boeing 787 and the EA-18
Growler programme and TenCate Cetex® thermoplastic composites for
various Boeing aircraft.
At the beginning of 2012, TenCate Advanced Composites in the United
States of America received a Supplier Excellence Award from General
Atomics Aeronautical Systems. This is in recognition of the excellent
quality and delivery reliability of TenCate’s composite prepreg materials.
Since the formation of General Atomics Aeronautical Systems, TenCate
has supplied composite prepregs for this company’s unmanned vehicle
system programmes.
In the fi rst quarter, Northrop Grumman Aerospace Systems and its Astro
Aerospace business unit commissioned TenCate Advanced Composites
to supply pre-impregnated high-grade composites for use in the
construction of the solar shield of NASA’s James Webb space
telescope. This is the world’s largest astrophysical observatory, which
can look back 13.5 billion years in time. The telescope is scheduled to
enter service in 2018.
The commercial aerospace sector (including communication and
navigation satellites) in the United States of America and Europe
continued to show steady growth for composites. Unmanned aerial
vehicles (UAVs) for army use and the satellite industry remain an
important growth market for TenCate. These market positions were
further strengthened in 2012.
>‘We want to work for innovative businesses and for the
champion among those businesses. That is why we chose
TenCate.’
- Theo Wigger, General Manager, VIRO
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 73
TenCate prepregs go to Mars
Curiosity, an unmanned rover vehicle, is driving around
the surface of Mars. The fact that Curiosity landed
unscathed was partly due to the Lockheed Martin
aeroshell. An aeroshell protects a space vehicle
against pressure, heat and friction when entering the
atmosphere. The structure of the aeroshell includes
thermoset composites from TenCate. Thermoset
composites are exceptionally strong, light and durable.
They resist extreme temperatures and friction. TenCate
is one of the main suppliers of thermoset composites
to Lockheed Martin. TenCate Advanced Composites
has already supplied thermoset composites for the
Spirit, Opportunity and Phoenix Mars reconnaissance
missions in earlier years.
PERFORMANCE OF TENCATE ADVANCED ARMOUR IN 2012
The armour composites market in both the United States of America
and Europe remained sluggish in 2012. There was also a slowdown in
project orders. A promising prospect is the fact that the US Army,
despite major cost-cutting, is expected to begin a major modernisation
programme for its vehicle fl eet in the years ahead.
Since TenCate expects strong growth in the Asia-Pacifi c (APAC) region,
TenCate Advanced Armour opened a sales offi ce for the region in
Singapore at the beginning of 2012. This will become the centre for a
number of local production sites in countries in this region. A major
feature of the worldwide growth strategy is that TenCate produces
specifi c programmes for each individual country. The current production
for the region will take place in Europe or the USA, but can also be
carried out through local partners. An international presence is
essential. In Asia, TenCate is established in Singapore and India.
A sales offi ce for TenCate Advanced Armour was also opened in the
Middle East at the end of 2012. It is the next step in the long-term
strategy of offering state-of-the-art armour technologies in the United
Arab Emirates and the Middle East in a way which not only improves
the defence and security objectives of the country but also ensures
continuing industrial development.
In mid-2012, TenCate Advanced Armour was selected by QinetiQ
to supply the armour for the Foxhound LPPV, a military 4x4 vehicle.
The initial production of 200 vehicles will be followed by an order
for 100 vehicles, which General Dynamics European Land Systems,
Force Protection Europe, will supply to the UK Ministry of Defence.
The Foxhound was designed to give a vehicle of such dimensions an
unprecedented level of protection.
ADVANCED ARMOUR
REVENUES BY GEOGRAPHIC REGION
Asia Pacific
EMEA
Americas
2%
62%36%
REVENUES BY CUSTOMER GROUP (INDICATIVE)
Non-governmental
Governmental
2%
98%
REVENUES BY MARKET THEME (INDICATIVE)
Personal protection
Defence
26%
74%
74 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Advanced Textiles & Composites Sector
SYSTEM INTEGRATION
In Europe, TenCate positions itself as a system integrator for vehicle
armour. This market is moving increasingly in the direction of new
system programmes. These systems are fully integrated into vehicles
(survivability systems) and the programmes usually have a lead time of
several years.
In this connection, following approval by the Danish authorities, the
acquisition of ABDS ApS was completed in early 2012. The company
has been integrated as Ten Cate Active Protection ApS. This acquisition
followed successful testing and simulations with the TenCate ABDS™
active blast countermeasure system. The market implementation of the
system is expected to take place in 2013. The good results achieved so
far with the testing and simulations provide clear evidence of strong
market interest in various vehicle programmes. Innovative integration
concepts have also been designed for a series of combat and tactical
military vehicles. TenCate Advanced Armor North America is
endeavouring to shorten the market development and support both the
government and OEMs in accessing the technology of the TenCate
ABDS™ active blast countermeasure system. In Goleta (California, USA)
a new TenCate team has been created to supervise this project with the
necessary degree of professionalism.
SUSTAINABILITY
In 2012 the TenCate Advanced Composites market group in the
Netherlands was certifi ed to level 3 of the CSR Performance Ladder.
Stakeholders in the value chain were involved in the introduction of this
CSR management system and regular consultation is taking place on
good working practice. This market group will also implement the
Plan-Do-Check-Act cycle for all 33 CSR indicators in the next three
years. TenCate Advanced Composites further reduced the number of
chemical resin systems in 2012. This also had the effect of reducing the
waste fl ow from this market group. As part of the introduction of LEAN
manufacturing four maximum value realisation for customers with the
lowest possible waste, the 5S approach was implemented. This
involves the complete separation, sorting, standardisation,
systematisation and cleaning of production. Clean rooms were also
installed for laminate production. An additional effect is that the air
quality in this production unit has been further improved.
In 2013 even greater attention will be devoted to the recycling of
thermoplastic composites. The cooperation with knowledge institutions
both in the Netherlands and in the UK will also be intensifi ed. Alongside
universities, this will involve in particular the TPRC innovation centre in
Twente. Within the production process, more of the process cooling
water in Nijverdal will be recycled, in order to save energy. Finally, a 15%
increase will be pursued in regional purchasing of specifi c services and
products.
>‘Foxhound is a great example of what can be achieved
through the Ministry of Defence and industry working
closely together. I want to maximise the extent to which
industry uses an open systems approach both domestically
and in the global market, enabling us to buy off-the-shelf
as far as possible. (…) That will deliver a fl eet of state-of-
the-art, high-tech and easily deployable fi ghting vehicles.’
- Peter Luff, Minister for Defence Equipment, Support and
Technology, United Kingdom
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 75
Market groups and market themes
Geosynthetics & Grass Sector
76 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Sector Geosynthetics & Grass
KEY FIGURES GEOSYNTHETICS & GRASS
in millions of euros unless stated otherwise 2008 2009 2010 2011 2012
Revenues 497.8 392.1 469.3 525.9 518.7
Operating result before amortisation (EBITA) 37.8 16.8 31.4 26.3 31.5
EBITA margin (%) 7.6 4.3 6.7 5.0 6.1%
Operating result (EBIT) 34.8 13.8 27.7 20.8 25.1
Investments 29.0 9.0 9.9 12.2 5.3
Depreciation and amortisation 23.0 25.3 26.2 28.9 30.7
Net capital employed (year-end) 427.4 332.7 380.8 429.5 399.7
Number of staff years (year-end) 2,129 1,795 2,128 2,160 2,102
EBITA as percentage of net average capital employed 8.8 4.1 8.2 6.2 7.3
REVENUES AND RESULTS OF THE GEOSYNTHETICS
& GRASS SECTOR
The Geosynthetics & Grass sector recorded a 1% decline in revenues
to € 518.7 million (2011: € 525.9 million).
The revenues of TenCate Geosynthetics decreased slightly, while those
of TenCate Grass remained almost unchanged, although there was a
shift in revenues within the Grass group towards downstream activities.
The operating result before amortisation of intangible fi xed assets rose
by 20% to € 31.5 million (2011: € 26.3 million).
The positive trend in EBITA was affected particularly by strict margin
and cost management, despite a slight decrease in revenues.
The initially strong performance in geosynthetics tailed off during
the year due to a partial decline in demand in the American market.
The EBITA for the grass activities improved compared to 2011
as a result of cost control.
The EBITA margin of this sector rose to 6.1% (2011: 5.0%). The margin
remained below the required level (minimum 10%).
INDICATIVE BREAKDOWN OF REVENUES OF THE GEOSYNTHETICS & GRASS SECTOR
25% 25%
17% 18%
57%
2011 201258% Geosynthetics
Grass upstreamGrassdownstream
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 77
PERFORMANCE OF TENCATE GEOSYNTHETICS IN 2012
At TenCate Geosynthetics the initially positive trend in revenues came
to a halt in the second half of the year, particularly in the United States
of America. This was partly the result of the economic circumstances
and a restrained investment policy on the part of the government.
A similar trend was discernible in Europe, although the fi nancial effects
remained limited. Revenues in Asia continued to grow, partly through
the acquisition of Emas Kiara.
The second half of the year proved somewhat disappointing in the
United States of America after an initially positive trend. At the
beginning of 2012, TenCate Geosynthetics Americas was chosen by
Parsons Engineering in New York as the sole producer to supply
TenCate Geotube® containers for the Onondaga Lake dredging project in
New York State. This project is the largest geotextile container project
in the United States and North America. It began in the spring of 2012
and is scheduled to run for four years. After completion of the dredging
and dewatering works, the TenCate Geotube® containers will be stored
permanently in the covered cell.
New initiatives were taken in 2012 to further develop the South
American market. No strong growth was seen in the European market.
In terms of production effi ciency and logistics, important steps were
taken to contend with the challenging market conditions.
TenCate Geosynthetics is also increasingly working with specialist
partners. A consortium of innovative Dutch businesses, led by
Witteveen+Bos and TenCate Geosynthetics, developed the Smart
Tailings concept on the basis of constructive cooperation. This concept
is focused on managing residues from pulverised stone resulting from
the extraction of metal, oil or coal. This waste causes one of the
biggest environmental problems in the world. The consortium combines
high-level expertise in the fi eld of restoration design and risk
evaluation. TenCate Geosynthetics and Witteveen+Bos provide
the consortium with complementary measurement and monitoring
technologies. These companies exchange know-how and provide
an insight into the effi cient management of mining waste.
Positive revenue growth was recorded in Asia. This was partly due
to the acquisition of Emas Kiara Industries (Malaysia) in 2011, which
strengthened TenCate’s position in the Asian markets. Emas Kiara
Industries is a producer and supplier of a wide range of geosynthetic
products and solutions. Activities are increasing in the major
infrastructure project market (civil engineering) and the environmental
market.
In China, TenCate Geosynthetics and AGT International signed a letter
of intent for cooperation on the installation of TenCate GeoDetect®
technology in dike bodies on the Yellow River in Dayulan (Zhengzhou)
in Henan province.
GEOSYNTHETICS
>‘Parsons Engineering is particularly pleased to have
TenCate as a partner in the implementation of the
Onondaga Lake Remediation Project. The experience,
technical knowledge and speed with which TenCate
Geosynthetics has responded to this assignment are a
perfect complement for their high-quality TenCate
Geotube® product.’
- Tom Drachenberg, Project Engineer, Parsons Engineering
REVENUES BY GEOGRAPHIC REGION
Asia Pacific
EMEA
Americas22%
38%
40%
REVENUES BY CUSTOMER GROUP (INDICATIVE)
Governmental
Non-governmental
54%
46%
REVENUES BY MARKET THEME (INDICATIVE)
Water management
Infrastructure
6%
90%
4%
Sports & leisure
78 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Sector Geosynthetics & Grass
The proactive exchange of products and system solutions between the
various geographic regions leads to TenCate Geosynthetics being
involved in highly attractive projects worldwide. These are frequently
covered in media reports. An important trend is the provision of
environmental solutions.
The market is devoting increasing attention to the positive
environmental aspects of geosynthetics. Alternatives to TenCate
geosynthetics are usually traditional materials such as concrete, stone
and steel, which often have to be transported over long distances. In
the case of geosynthetics, by contrast, locally available materials (sand,
sludge) are used. This is a worldwide trend.
SUSTAINABILITY
During the reporting year the TenCate Geosynthetics market group in
the Netherlands laid the basis for the certifi cation in early 2013 of the
new management system for corporate social responsibility. Positive
experiences were also gained with the product ecotool for TenCate
Geotube® solutions. This determines the CO2 footprint of this innovative
solution for water management. Comparisons can also be made with
competing, traditional alternatives, such as the use of boulders or
spraying vast quantities of sand.
On the basis of the 5S approach, the internal audits relating to process
safety, order and tidiness were tightened in 2012. Preparations were
also made for the 2013 risk inventory and evaluation. Fork-lift truck
drivers were given further training. The collection of synthetic yarns
from the production process was intensifi ed in order to increase their
reuse. The permanent transfer of the shearing department from Almelo
to Nijverdal has cut the number of internal transport movements to
a minimum.
The in-house emergency plan for this market group in the Netherlands
is being updated in 2013. As part of an age-aware personnel policy,
the shift roster is being made more fl exible. Preparations are being
made for ISO 14001 certifi cation for the other TenCate Geosynthetics
production sites in Europe. To increase the sustainability of the product
portfolio, tests will be conducted in 2013 with biodegradable TenCate
Geotube® containers for specifi c applications. By analysing existing,
external transport movements and placing them with a single carrier,
savings can be made in terms of costs and CO2 emissions. Closer
cooperation will take place with suppliers and customers in order to
reduce the volume of waste.
TenCate GeoDetect® for dike monitoring
on the Yellow River
TenCate is partnering with AGT in China in a pilot
programme for the installation of a system to manage
dikes along the Yellow River in Dayulan. TenCate is
supplying the geotextiles and sensors for the system
and the installation. TenCate GeoDetect® is a
monitoring system based on geotextiles with
interwoven optical fi bres to record changes in slopes
and dikes. TenCate Geosynthetics has been involved in
projects with intelligent dike monitoring with TenCate
GeoDetect® for a number of years, including the
IJkdijk. TenCate GeoDetect® has been tested in dike
bodies and has already been used in the building of
roads and railways and the construction of retaining
walls, bridge heads and underground structures.
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 79
PERFORMANCE OF TENCATE GRASS IN 2012
The revenues of the Grass group declined in the reporting year
compared to 2011. This was partly due to a decrease in sales in the
European sports market. The southern European market in particular fell
sharply as a result of the economic problems. Spending cuts prompted
local authorities to pursue a restrained policy. In the United States of
America there was a tentative improvement, while Asia showed a
stable trend. Australia and New Zealand saw a slight decrease in the
market.
The weak market conditions meant that there was no improvement in
the underutilisation of production capacity for synthetic turf yarns. In
order to respond to market conditions and wider developments, the
policy remained focused on effi cient production and integration of
marketing and sales costs, and on sustainable synthetic turf systems.
The integrated approach in close cooperation with the marketing
organisation had the positive result that the market share of the
downstream activities increased.
A positive factor is that the market is increasingly distinguishing and
appreciating quality differences. TenCate’s strong and reliable
distribution channel is an important factor for success. As a quality
brand, TenCate pursues continuous improvement in the quality and
sustainability of synthetic turf pitches. This is partly achieved through
partners in the value chain. GreenFields positions itself as an innovative
market player with responsibility for large proportion of FIFA-related
projects around the world.
An illustration of the policy in 2012 was the incorporation of standard
heat-refl ecting (HR) properties in the TenCate XP Blade™ product
portfolio for the American market. Since 2004, TenCate XP Blade™ has
become the most durable fi bre in the market. Thanks to innovation, the
system delivers even better performance as a result of heat reduction
on warm, sunny days. Tests showed temperature reduction of 8°C.
TenCate XP Blade™ has been installed on more than 3,500 synthetic turf
pitches around the world. The production capacity for this most durable
synthetic turf product had already been increased strongly in the United
States of America in 2011. As a result, TenCate can now meet the
worldwide structural growth in demand for these wear-resistant
synthetic turf fi bres. The heat refl ection is now incorporated as standard
in TenCate XP Blade™ fi bres.
Since the 2012-2013 season, the Dutch Premier league clubs Heracles
Almelo and PEC Zwolle have played their home matches on an
innovative TenCate synthetic turf pitch based on a patented 3D weaving
technology. This incorporates a number of new developments, allowing
optimum ball and playing performance. The use this system for
top-fl ight matches enhances the image of the product nationally and
internationally.
In mid-2012 it was announced that GreenFields would be able to supply
the fi rst IRB- and FIFA-approved dual-use pitch. Maidenhead Rugby
Union Football Club became the fi rst club to use the One Turf pitch.
This is the new, global specifi cation for dual-use pitches, which has
been approved by both the International Rugby Board and FIFA and
which offers an optimum playing surface for rugby and football.
GreenFields is supplying this fi rst pitch in the world as a selected
partner in the framework agreement between the Rugby Football Union,
the FA and the FF under the management of Robinson Lage Francis.
GRASS
REVENUES BY GEOGRAPHIC REGION
Asia Pacific
EMEA
Americas
17%
55%
28%
REVENUES BY CUSTOMER GROUP (INDICATIVE)
Non-governmental
Governmental
71%
29%
REVENUES BY MARKET THEME (INDICATIVE)
Infrastructure
Sports & leisure
7%
93%
80 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
>Sector Geosynthetics & Grass
At the end of 2012, Royal Ten Cate became the offi cial partner of the
Dutch National Hockey Association (KNHB). The cooperation between
TenCate Grass, GreenFields and the KNHB is focused among other
things on the Men’s and Women’s Hockey World Cup due to be held in
and around The Hague in 2014. TenCate is supplying state-of-the-art
synthetic turf systems for this event. The Men’s and Women’s World
Cup in and around the Hague is the next important international hockey
event after the Olympic Games in London. The partnership with the
KNHB will run initially to 31 August 2016.
Although the overall market situation in most countries in Europe and
elsewhere remains sluggish, the market is developing apace. It is
expected that the synthetic turf industry will consolidate further with
a growing emphasis on quality and durability, as the level of knowledge
among end-users is rising. Further penetration of the synthetic turf
market is expected, partly having regard to the considerably lower
maintenance costs compared to natural grass. The landscaping market
is also growing steadily. Water scarcity and ease of maintenance are
key drivers in this market.
SUSTAINABILITY
The TenCate Grass market group achieved CSR Performance Ladder
certifi cation to level 3 in the Netherlands during the reporting year.
The stakeholder dialogue included the drafting and signing of a code
of conduct aimed at eliminating child labour, infringements of human
rights and corruption. At the same time, a global mobility policy was
drawn up under which TenCate Grass customers are supplied from the
geographically closest location.
An extensive internal campaign was also conducted in 2012 to further
increase CSR awareness. During the themed months on quality, safety
and welfare, all disciplines within this market group worked closely
together, from HR to quality management and from production to offi ce
departments. The results of all the efforts were measured by conducting
surveys among employees.
Preparations were also made to replace the industrial clothing at
TenCate Grass in Nijverdal. The occupational health and safety plan
was also updated. This is closely aligned with the positive effects of
the 5S approach in fi bre production in Nijverdal. The aim is to achieve
an optimally organised and clearly arranged production site. This will
also further increase occupational safety. The 5S methodology was
introduced in 2012 for the backing production site. It is due to be
completed in the forthcoming reporting year.
With the inception of production using the innovative weaving
technology, work was carried out during the reporting year to further
increase the sustainability of the production portfolio. The fully
recyclable synthetic turf systems have been well received in the market.
At the same time, the regranulation of synthetic production waste and
its return to the extrusion process has been increased. On the basis of
the new product eco-tool, work is being carried out to determine the
carbon footprint of the synthetic turf products. TenCate is conducting
the Skin-comfort innovation project with Radboud University in
Nijmegen, the Netherlands, with the aim of further increasing the
sliding friendliness of synthetic turf. Finally, preparations are underway
for the next generation of synthetic turf systems, aimed at an ultimate
balance between properties and costs.
Innovative synthetic turf pitch for Dutch
Premier League sides
Since the 2012-2013 season, Heracles Almelo and
PEC Zwolle have played their home matches on an
innovative TenCate synthetic turf pitch based on a
patented 3D weaving technology. The interwoven
elastic fi bres remain resilient even after long-term
stress. These fi bres also take over part of the function
of the infi ll. That means less infi ll is required to
achieve the desired playing characteristics. The
weaving technology results in no streakiness and
makes it easier to use only raw materials of the same
type. That means the pitch can be entirely recycled.
The Heracles Almelo pitch is the fi rst offi cial pitch to
be approved by FIFA in accordance with the FIFA Two
Star standard for synthetic turf football pitches.
Royal Ten Cate Annual Report 2012 | PERFORMANCE | 81
The wearing trial of the new work clothing at Nijverdal is taking place
in 2013. The in-house emergency organisation is being given further
training and associated disaster drills will be organised. Many projects
on energy-saving are planned.
With regard to the diversity of the workforce, TenCate Grass is aiming
for a 1% increase in the percentage of women in management positions
in 2013.
The ‘noise-resistant synthetic turf’ innovation project will be completed
in readiness for the market launch. Finally, increased recyclability of
synthetic turf systems will be high on the agenda in the forthcoming year.
82 | Royal Ten Cate Annual Report 2012 | PERFORMANCE
Entities and market themes
KEY FIGURES OTHER ACTIVITIES
in millions of euros unless stated otherwise 2008 2009 2010 2011 2012
Revenues 53.8 52.7 66.8 74.5 69.7
Operating result before amortisation (EBITA) -3.9 -7.0 9.8 5.9 – 3.0
Operating result (EBIT) - 3.9 -8.1 8.3 4.1 – 6.1
Investments 7.3 4.1 6.9 5.2 1.9
Depreciation and amortisation 1.7 3.2 3.5 3.7 5.2
Number of staff years (year-end) 657 670 624 611 655
REVENUES AND RESULTS OF OTHER ACTIVITIES
The revenues of the Other Activities sector (Xennia Technology,
TenCate Enbi and Holding & Services) amounted to € 69.7 million
(2011: € 74.5 million). EBITA amounted to – € 3.0 million (2011: € 5.9
million). The decrease in EBITA was due particularly to the loss-making
activities of Xennia Technology, including the recognition of € 2.7
million of non-recurring expenses.
PERFORMANCE OF XENNIA TECHNOLOGY IN 2012
In 2012 Xennia Technology began a process of cutting development
costs and terminating developments with a long lead time and/or
uncertain end-results. The focus was placed on revenues and results
achievable in the short term. Developments in the fi eld of digital textile
fi nishing were concentrated around applications which offer particular
prospects for TenCate, and around ink sales that could be achieved in
the textile market in the short term. Once the business model has
delivered results for the short-term, the focus can be shifted back to
the long term.
Many of Xennia’s business cases are in the start-up phase and have yet
to prove themselves. The ceramic printing market was one of the major
areas of application of inkjet technology in 2012. Xennia is now also
actively engaged in projects in the fi eld of product decoration (fl ooring
market, wall decoration).
PERFORMANCE OF TENCATE ENBI IN 2012
The printer and copier market, an important market in which TenCate
Enbi operates, remained reasonably stable overall. TenCate Enbi
generated an increase in revenues, primarily through growth in Asia.
The site in China (Zhuhai) received a growing number of qualifi cations
for components for Asian printer and copier manufacturers.
Other Activities Sector
REVENUES BY GEOGRAPHIC REGION
Americas
Asia Pacific
EMEA50%
32%
18%
REVENUES BY CUSTOMER GROUP (INDICATIVE)
Non-governmental
100%
Royal Ten Cate Annual Report 2012 | OUTLOOK | 83
Outlook for 2013 84
Action plans for 2013 86
Corporate initiatives 87
OUTLOOKIn Outlook the company provides further information on the outlook and action plans for 2013 and subsequent years
84 | Royal Ten Cate Annual Report 2012 | OUTLOOK
There is uncertainty with regard to the precise details of budgetary
measures to be taken by the government in the United States of
America. The outcome of this process will also be of signifi cance for the
trend in TenCate’s revenues. European governments too are expected to
maintain a restrained stance towards government spending in the
short term. The market themes on which TenCate focuses and which
are mainly related to the safety of persons, protection of their living
environment and sustainability nevertheless remain on the agenda.
This offers opportunities for TenCate.
A change will take place in the marketing of safety fabrics in Asia in
2013. As part of the change, TenCate will establish a strong position for
the successful TenCate Tecasafe™ Plus portfolio in the industrial market
to boost sales in Asia. As a result, the joint venture in Thailand will be
closed.
A sharpening of the strategic focus was announced in mid-2012.
TenCate has focused intensively on the development of industrial
markets, such as safety clothing for industrial applications, the
automotive sector (weight reduction) and further geographic
diversifi cation (BRIC countries). TenCate aims to enter partnerships with
third parties to accelerate growth in this area. The fi rst results of this
were evident in 2012 (3M, BASF, automotive industry qualifi cations).
This policy will be continued in 2013.
For the main growth products, such as TenCate Cetex® (aerospace
composites), TenCate Tecasafe™ Plus and TenCate Geotube®
(geocontainers for water management systems), above-average growth
is expected. The international revenue growth of TenCate Defender™ M
will increasingly compensate for a possible further decline in American
revenues. The decline in revenues which occurred in this fi eld in 2012 is
not expected to continue in 2013.
OUTLOOK FOR EACH MARKET GROUP
TENCATE PROTECTIVE FABRICS
In view of the project-based nature of the government-related markets,
both in Europe and the United States of America, and the uncertainties
surrounding US government spending, the market outlook is uncertain.
Nevertheless, the focus in the United States of America on possible
foreign confl ict zones and terrorism, and on personal protection,
remains strong. The same applies to other army units. TenCate will
continue to devote full attention to new markets and geographic areas
in which the company has yet to build up any substantial positions.
TenCate has an excellent basis for this. Continuing market and product
development is expected to deliver long-term growth in protective
fabrics worldwide.
TENCATE ADVANCED COMPOSITES
AND TENCATE ADVANCED ARMOUR
The longer-term market outlook remains consistently positive. Annual
sales of armour products depend greatly on individual projects, for
which governments make budgets available. The armour systems
activities for aerospace are expected to make a growing contribution
to revenues.
The armour projects usually form part of programmes to upgrade and
modernise army vehicles, in order to counter new threats and achieve
a greater degree of mobility. The US Army is expected to begin a major
modernisation programme for its vehicle fl eets at some stage. This will
include a new infantry Ground Combat Vehicle (GCV), an armoured
replacement for the vulnerable M-113 and the Joint Light Tactical
Vehicle (JLTV). One of the main objectives in modernisation programmes
is an increase in the survivability of the occupants. The GCV and JLTV
vehicles will offer a higher level of protection against future ballistic
threats. The TenCate ABDS™ active blast countermeasure system is
well-positioned to contribute to a higher level of protection in such
vehicles.
Outlook for 2013
Royal Ten Cate Annual Report 2012 | OUTLOOK | 85
The trend in the structural demand for TenCate composites in the civil
aviation industry also remains positive. Revenues from the automotive
industry are expected to develop positively. This is partly due to the
qualifi cations which TenCate has obtained. During the current year,
TenCate expects to continue to benefi t from long-term contracts with
large international aircraft manufacturers and from the fi rst orders in
the automotive industry. The outlook for the military aviation market
and satellite programmes remains positive
TENCATE GEOSYNTHETICS
TenCate Geosynthetics expects to see growth in its activities in 2013.
To do so it will also enter new markets, including the oil and gas sector.
Cautious growth is expected in infrastructure projects on all continents
and as a result of new products and applications for water management
and the environmental market. In particular, there are high expectations
for the South American and Asian markets, but also for the protection
of the east coast of North America. Further cooperation is also being
sought with international and large regional engineering fi rms and
construction companies.
TENCATE GRASS
Volumes in the global market for synthetic turf are not expected to
show any signifi cant rise in 2013, particularly as a result of tight
government budgets. Regional differences, wide in some cases, will
nevertheless remain. TenCate’s presence across the entire world market
is an advantage. The increasing acceptance of synthetic turf as a
genuine alternative to natural grass in both landscaping and sports,
with football as the main growth market, will result in a growth trend.
XENNIA TECHNOLOGY
TenCate is providing increasing support for Xennia Technology’s market
development, partly by acting as a launch customer in the technical
textile sector.
TENCATE ENBI
TenCate Enbi has already provided information on the growth
opportunities in the Asian market. Relationships with producers are
developed on the basis of product qualifi cations. These qualifi cation
processes may be lengthy. The initial results of this are now becoming
evident, and attractive opportunities are emerging in the Asian market.
By contrast, developments relating to end-of-life products will cause
the respective revenues to decrease or come to an end. TenCate Enbi
is factoring in a further reduction in revenues from one of its major
US relationships. The main growth is expected to be achieved at the
Chinese site.
86 | Royal Ten Cate Annual Report 2012 | OUTLOOK
INCREASE IN IMPORTANCE OF MARKETING
■ To enhance TenCate’s positioning in new and existing markets,
greater importance will be attributed to the correct market
positioning and distinctive capability (the value proposition) of
TenCate’s products. This will be achieved in part by investing more
in strengthening the marketing and sales organisation.
■ More direct control of local markets and local customer relations.
This will strengthen operational fl exibility and increase the
readiness to respond to market opportunities.
■ Further development of the website, which was overhauled in 2012,
and exploitation of new media.
FOCUS ON SUCCESSFUL MARKET NICHES WITH PROVEN
PRODUCTS
■ TenCate operates in market niches with successful products which
have been developed in past years but have not yet generated the
desired sales volumes. Examples are TenCate Tecasafe™ Plus,
TenCate Geotube® and the TenCate matrix-woven synthetic turf
system. Efforts will be made to accelerate growth by means
of a greater focus on these products and customer groups.
■ A less fragmented product portfolio also has a positive impact
on the effi ciency and overall cost structure.
■ Partnerships with market participants.
CONTINUING PROFIT RECOVERY IN THE GRASS GROUP
■ Further development of access to end-markets is necessary in order
to increase capacity utilisation in synthetic turf yarn production.
This is being achieved in the fi rst place through high-quality systems
which can be marketed through reliable partners. Sustainability
and low total cost of ownership have the utmost priority.
■ Continued development of weaving technology, with a considerably
higher quality level being achieved which fi ts in well with the
requirements for the recycling of raw materials.
■ Continued development of systems incorporating multiple functions,
allowing considerable savings on installation costs.
CONSTANT FOCUS ON SUSTAINABLE COST SAVINGS
■ Markets are expected to show barely any recovery in 2013. Cost
savings, which are a permanent cornerstone of the TenCate business
model, therefore continue to have strategic priority.
MARKET DEVELOPMENT IN EMERGING GEOGRAPHIC
MARKETS
■ Markets in the BRIC countries are increasingly important to TenCate.
Priority is being given to achieving above-average growth in these
geographic areas, partly through cooperation with partners.
The development of new geographic markets is a gradual process,
because standards are often lacking and materials fi rst have to be
certifi ed or qualifi ed. TenCate is closely involved in these processes.
FURTHER STRENGTHENING OF REVENUE GROWTH IN
COMPOSITES
■ Integration of acquired companies.
■ Market development in the tooling and automotive segments
and applications in oil and gas extraction.
START OF PRODUCTION BASED ON INKJET TECHNOLOGY
AT TENCATE PROTECTIVE FABRICS
Action plans for 2013
Royal Ten Cate Annual Report 2012 | OUTLOOK | 87
Corporate initiatives in 2013
CORPORATE SOCIAL RESPONSIBILITY
■ Green electricity. With effect from 1 January 2013 all market groups
in Nijverdal have switched entirely to green electricity. The TenCate
offi ces in Almelo have already been supplied with green electricity
and heating for some years.
■ Ultraviolet curing. Digital fi nishing enables UV curing. This is a
photochemical process in which high-intensity ultraviolet light is
used for the fast and direct drying of inks and coatings. This
increases production speed, reduces waste and promotes greater
attachment to the substrate. UV curing therefore offers a cleaner
process for ecologically aware fi nishing and coating of technical
textiles.
■ Digital inkjet technology. The fi rst digital fi nishing machines for the
production of technical textiles at TenCate Protective & Outdoor
Fabrics are scheduled to enter service in April 2013. This will lead
among other things to a sharp reduction in the consumption of
water and energy, and of wet chemicals. Environmentally friendly
water-based inks are used for the digital processing of textiles.
This innovative production method also contributes to a safe and
healthy working environment.
■ CSR Performance Ladder. The certifi cation of TenCate Geosynthetics
in the Netherlands was achieved at the beginning of 2013.
This certifi cation of corporate social responsibility will be promoted
in 2013 among TenCate’s other production sites worldwide. TenCate
Geosynthetics will also have the production sites at Bezons (France)
and Linz (Austria) certifi ed in accordance with ISO 14001 in 2013.
Preparations are also being made for CSR certifi cation for these two
sites in 2014.
■ Product ecotool. More CO2 footprints of products and systems are
expected in 2013. Further work will also take place to complete
the ecotool for TenCate Advanced Composites.
■ Process ecotool. On the basis of the results for 2012, the existing
critical performance indicators with regard to CSR will be
reassessed in terms of applicability and completeness. Work
will also be carried out on a further increase in the validation
percentage.
■ CO2 footprint. As well as carrying out a comprehensive assessment
and determination of the CO2 footprint of the overall TenCate
organisation, further work will take place in 2013 on reducing
the most comprehensive ecological footprint possible.
■ Sponsorship. In 2013 TenCate marks 10 years as the synthetic turf
sponsor of the Cruyff Foundation and 10 years as the main sponsor
of the Heracles Almelo professional football club. This Dutch
Premier League club fulfi ls an important social and community role
in the Almelo region. TenCate also wishes to give its name to the
planned new stadium of Heracles Almelo. In 2013 it will become
clear whether this sustainable stadium is to be built, with the
incorporation of TenCate materials and the next-generation synthetic
turf system that is currently under development. TenCate Grass is
also making preparations in 2013 for the 2014 Hockey World Cup in
the context of the partnership between TenCate and the Dutch
National Hockey Association.
CORPORATE RISK MANAGEMENT
During the current calendar year, the corporate risk management
department in both North America and the EMEA region will promote
recognition through the new Highly Protected Risk Awards. This will
be done jointly with the insurer FM Global and the local companies.
By way of preparation, the management of the production sites
concerned will implement the required organisational and process
changes relating to the relevant safety aspects.
88 | Royal Ten Cate Annual Report 2012 | OUTLOOK
As the Executive Board of Royal Ten Cate, we have prepared the annual
report and the fi nancial statements for 2012.
We declare that to the best of our knowledge:
■ The fi nancial statements give a true and fair view of the assets,
liabilities and the fi nancial position of the company and its
consolidated businesses
■ The annual report gives a true and fair view of the position on the
balance sheet date and the state of affairs of the company and its
associated companies during the year and that the principal risks
have been stated in the annual report
Almelo, 28 February 2013
Executive Board
L. de Vries, President and CEO
B.J.H. Cornelese, CFO
Statement by the Executive Board
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 89
2012 fi nancial statements 90
Other information 142
Ten-year summary 144
FINANCIAL STATEMENTSFinancial Statements contains the fi nancial statements of TenCate and the accompanying notes
90 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Consolidated profit and loss account 92
Consolidated statement of comprehensive income 93
Consolidated balance sheet 94
Consolidated cash flow statement 96
Consolidated statement of changes in group equity 98
Notes to the consolidated financial statements 99
1 General information on Koninklijke Ten Cate nv 99
2 General principles for fi nancial reporting 99
3 Principles for the preparation of the fi nancial
statements 99
4 Consolidation principles 99
5 Foreign currencies 100
6 Derivatives 101
7 Hedge accounting 101
8 Segment reporting 101
9 Revenues 101
10 Government subsidies 102
11 Raw materials and manufacturing supplies 102
12 Lease payments 102
13 Financial income and expenses 102
14 Profi t tax 102
15 Earnings per share 103
16 New standards and interpretations
not yet applied 103
17 Principles for the preparation
of the cash fl ow statement 103
18 Intangible assets 104
19 Tangible fi xed assets 104
20 Inventories 105
21 Trade debtors and other receivables 105
22 Cash and cash equivalents 105
23 Impairment 105
24 Share capital 106
25 Pension liabilities 106
26 Share-based payments 107
27 Provisions 107
28 Long-term debts 108
29 Trade creditors 108
30 Determination of fair value 108
Notes to the profi t and loss account 109
31 Operating segments 109
32 Acquisitions and sale of participating interests 111
33 Personnel costs 111
34 General management costs 111
35 Net fi nancial expenses 112
36 Profi t tax 112
Notes to the consolidated balance sheet 114
37 Intangible assets 114
38 Tangible fi xed assets 116
39 Investments in associated companies
and fi nancial fi xed assets 117
40 Deferred profi t tax assets and liabilities 118
41 Inventories 119
42 Trade debtors 119
43 Other receivables 119
44 Cash and cash equivalents 120
45 Total shareholders’ equity 120
46 Earnings per share 121
47 Long-term debts 122
48 Pension liabilities 123
49 Provisions 125
Royal Ten Cate
Financial statements 2012
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 91
Other information 126
50 Financial instruments 126
51 Liabilities not shown in the balance sheet 131
52 Investment liabilities 131
53 Contingent liabilities 131
54 Post balance sheet events 132
55 Related parties 132
56 Estimates and judgments
made by the management 133
Company fi nancial statements 134
57 Company profi t and loss account 134
58 Company balance sheet
(before appropriation of the result) 134
Notes to the company fi nancial statements 135
59 Financial fi xed assets 135
60 Equity 135
61 Called and paid-up capital 135
62 Ordinary shares 136
63 Share premium reserve 136
64 Legal reserves 136
65 Other reserves 136
66 Option plan 137
67 Provisions 140
68 Long-term liabilities 140
69 Short-term liabilities 140
70 Auditor’s fees 141
71 Liabilities not shown in the balance sheet 141
92 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
For the financial year ending on 31 December, in millions of euros note 2011 2012
REVENUES 1,138.8 1,049.0
Cost of sales* 894.1 842.3
Gross margin* 244.7 206.7
Selling costs* 62.8 67.3
R&D costs* 19.4 23.2
General management costs* 34 72.9 78.7
OPERATING RESULT (EBIT) 89.6 37.5
Financial income 35 0.2 0.4
Financial expenses 35 – 11.5 – 12.5
NET FINANCIAL EXPENSES – 11.3 – 12.1
RESULT BEFORE PROFIT TAX 78.3 25.4
Profi t tax 36 – 18.7 – 8.7
Result after profi t tax 59.6 16.7
Net result from associated companies – 1.3 – 0.3
Result after profi t tax and associated companies 58.3 16.4
Result attributable to:
Non-controlling interest – 0.4 – 5.9
SHAREHOLDERS OF ROYAL TEN CATE (NET RESULT) 58.7 22.3
Weighted average number of shares (x 1,000) 46 25,452 25,895
Weighted average number of shares after dilution (x 1,000) 46 25,736 26,040
Net earnings per share (euro) 46 2.31 0.86
Diluted net earnings per share (euro) 46 2.28 0.86
* Adjusted for comparison purposes.
The notes in sections 1 to 71 form an integral part of these fi nancial statements.
Consolidated profi t and loss account
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 93
Consolidated statement of comprehensive income
For the financial year ending on 31 December, in millions of euros note 2011 2012
Result after profi t tax and associated companies 58.3 16.4
Other comprehensive income (after profit tax)
Foreign currency translation differences for foreign activities 45 3.8 – 3.8
Effective portion of changes in hedging reserve (hedge accounting) 45 – 0.9 0.6
Actuarial gains and losses of pensions – 14.1 – 18.0
Other comprehensive income after profi t tax – 11.2 – 21.2
Comprehensive income after profi t tax 47.1 – 4.8
Comprehensive income attributable to:
Non-controlling interest – 0.3 – 5.9
Shareholders of Royal Ten Cate 47.4 1.1
The notes in sections 1 to 71 form an integral part of these fi nancial statements.
94 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
in millions of euros note 31 December 2011 31 December 2012
NON-CURRENT ASSETS
Goodwill 37 212.0 214.5
Other intangible assets 37 61.0 54.9
Tangible fi xed assets 38 221.9 196.7
Investments in associated companies 39 4.6 4.1
Financial fi xed assets 39 11.1 12.9
Deferred profi t tax assets 40 21.1 30.0
Total non-current assets 531.7 513.1
CURRENT ASSETS
Inventories 41 267.9 226.4
Receivables
Trade receivables 42 152.4 140.0
Profi t tax receivables 6.5 3.8
Other receivables 43 22.2 15.9
Cash and cash equivalents 44 22.7 26.7
Total current assets 471.7 412.8
TOTAL ASSETS 1,003.4 925.9
Consolidated balance sheet
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 95
in millions of euros note 31 December 2011 31 December 2012
GROUP EQUITY 45
Share capital 64.8 66.2
Share premium reserve 44.8 43.4
Translation reserve 7.0 3.1
Hedging reserve – 4.5 – 3.9
Reserve for own shares – 15.6 – 15.1
Other reserves and undistributed result 369.3 363.5
Total shareholders’ equity 465.8 457.2
Non-controlling interest 3.7 – 1.9
Group equity 469.5 455.3
NON-CURRENT LIABILITIES
Long-term debts 47 275.1 220.3
Pension liabilities 48 22.6 42.3
Provisions 49 15.0 11.4
Deferred profi t tax liabilities 40 8.0 8.8
Total non-current liabilities 320.7 282.8
CURRENT LIABILITIES
Cash loans, overdrafts 44 35.4 35.4
Repayment of long-term debts 47 0.9 0.9
Trade creditors and other payables 169.1 142.4
Provisions 49 5.0 2.8
Profi t tax liabilities 2.8 6.3
Total short-term debts 213.2 187.8
Total liabilities 533.9 470.6
TOTAL GROUP EQUITY AND LIABILITIES 1,003.4 925.9
The notes in sections 1 to 71 form an integral part of these fi nancial statements.
96 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Consolidated cash fl ow statement
For the financial year ending on 31 December, in millions of euros note 2011 2012
CASH FLOW FROM OPERATING ACTIVITIES
Result after profi t tax 58.3 16.4
Adjustments for:
Depreciation 38 35.0 37.1
Amortisation 37 12.9 14.5
Net fi nancial expenses before exchange rate differences 35 11.1 12.2
Profi t tax 36 18.7 8.7
Net result from associated companies 1.3 0.3
Result from sale of tangible fi xed assets 34 – 0.9 –
Costs of option scheme 1.9 2.0
Other items – 2.1 –
Change in provisions and pension liabilities – 7.8 – 10.9
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGE IN WORKING CAPITAL 128.4 80.3
MOVEMENTS IN WORKING CAPITAL:
Inventories – 37.9 42.3
Receivables 9.9 18.7
Current liabilities – 18.4 – 22.7
– 46.4 38.3
CASH FLOW FROM OPERATING ACTIVITIES 82.0 118.6
Interest paid – 11.2 – 12.3
Profi t tax paid – 21.5 – 4.5
NET CASH FLOW FROM OPERATING ACTIVITIES 49.3 101.8
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 97
in millions of euros note 2011 2012
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of tangible fi xed assets 34 3.4 0.3
Interest received – 0.1
Acquisition of subsidiaries less cash acquired 32 – 29.3 – 15.7
Investments in intangible assets 37 – 4.4 – 4.6
Investments in tangible fi xed assets 38 – 21.3 – 12.0
Investments in associated companies 39 – 5.5 –
Increase in long-term receivables – 0.7 – 1.5
NET CASH FLOW FROM INVESTING ACTIVITIES – 57.8 – 33.4
NET CASH FLOW FROM OPERATING
AND INVESTING ACTIVITIES – 8.5 68.4
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from exercise of share options 2.4 0.5
Payments in respect of repurchase of own shares – 7.6 –
Repayment of long-term debts – 15.0 – 51.5
Drawing of long-term debts 69.5 –
Dividend paid to shareholders – 6.3 – 12.2
NET CASH FLOW FROM FINANCING ACTIVITIES 43.0 – 63.2
CHANGE IN CASH AND CASH EQUIVALENTS 34.5 5.2
Cash and cash equivalents on 1 January 44 – 44.1 – 12.7
Exchange rate and translation differences in cash and cash equivalents – 3.1 – 1.2
CASH AND CASH EQUIVALENTS ON 31 DECEMBER 44 – 12.7 – 8.7
The notes in sections 1 to 71 form an integral part of these fi nancial statements.
98 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
in millions of euros Share
capital
Share
premium
Reserve for
translation
differences
Hedging
reserve
Reserve
for own
shares
Other
reserves
and un-
distributed
income Total
Non-
controlling
interests
Group
equity
BALANCE AS AT 1 JANUARY 2011 63.8 45.8 3.3 – 3.6 – 10.4 339.6 438.5 3.8 442.3
COMPREHENSIVE INCOME
Result after profi t tax 58.7 58.7 – 0.4 58.3
Actuarial gains and losses on
defi ned-benefi t pension schemes – 14.1 – 14.1 – 14.1
Currency translation differences 3.7 3.7 0.1 3.8
Hedging result after profi t tax – 0.9 – 0.9 – 0.9
Total – – 3.7 – 0.9 – 44.6 47.4 – 0.3 47.1
TRANSACTIONS WITH SHAREHOLDERS
Dividend to shareholders 1.0 – 1.0 – 6.3 – 6.3 – 6.3
Share-based payment transactions 1.9 1.9 1.9
Repurchase of own shares – 7.6 – 7.6 – 7.6
Issue of repurchased shares 2.4 2.4 2.4
Acquisition of non-controlling interest – – 1.0 – 1.0
Acquisition of non-controlling interest
not leading to change of control – 10.5 – 10.5 1.2 – 9.3
Total 1.0 – 1.0 – – – 5.2 – 14.9 – 20.1 0.2 – 19.9
BALANCE AS AT 31 DECEMBER 2011 /
1 JANUARY 2012 64.8 44.8 7.0 – 4.5 – 15.6 369.3 465.8 3.7 469.5
COMPREHENSIVE INCOME
Result after profi t tax 22.3 22.3 – 5.9 16.4
Actuarial gains and losses on
defi ned-benefi t pension schemes – 17.9 – 17.9 – 0.1 – 18.0
Currency translation differences – 3.9 – 3.9 0.1 – 3.8
Hedging result after profi t tax 0.6 0.6 0.6
Total – – – 3.9 0.6 – 4.4 1.1 – 5.9 – 4.8
TRANSACTIONS WITH SHAREHOLDERS
Dividend to shareholders 1.4 – 1.4 – 12.2 – 12.2 – 12.2
Share-based payment transactions 2.0 2.0 2.0
Issue of repurchased shares 0.5 0.5 0.5
Changes in non-controlling interest – 0.3 0.3
Total 1.4 – 1.4 – – 0.5 – 10.2 – 9.7 0.3 – 9.4
BALANCE AS AT 31 DECEMBER 2012 66.2 43.4 3.1 – 3.9 – 15.1 363.5 457.2 – 1.9 455.3
The notes in sections 1 to 71 form an integral part of these fi nancial statements.
Consolidated statement of changes in group equity
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 99
ACCOUNTING STANDARDS
1 GENERAL INFORMATION ON KONINKLIJKE TEN CATE NV
Koninklijke Ten Cate nv (Royal Ten Cate) (the Company) is established
in Almelo, the Netherlands. The consolidated fi nancial statements of
the Company comprise the fi nancial statements of the Company and its
subsidiaries (referred to collectively as the 'Group') and the Group's
interests in other (non-consolidated) participating interests, associated
companies and proportionally consolidated joint ventures. The fi nancial
statements have been prepared by the Executive Board.
The 2012 annual report and accounts were discussed at the meeting of
the Supervisory Board on 28 February 2013. They were released for
publication on 1 March 2013. They will be presented to the general
meeting of shareholders for adoption on 18 April 2013.
The parent company fi nancial statements form part of Royal Ten Cate's
2012 fi nancial statements. Royal Ten Cate has made use of the
exemption pursuant to article 2:402 of Book 2 of the Netherlands Civil
Code with regard to the parent company fi nancial statements.
The original fi nancial statements were drafted in Dutch. This document
is an English translation of the original. In the case of any discrepancies
between the English and the Dutch text, the latter will prevail.
2 GENERAL PRINCIPLES FOR FINANCIAL REPORTING
The consolidated fi nancial statements have been prepared in
accordance with International Financial Reporting Standards, as
adopted within the EU (hereinafter EU-IFRS) and with Part 9 of Book 2
of the Netherlands Civil Code.
Changes to the principles for financial reporting
With effect from 2012, the profi t and loss account has been prepared
on the basis of the functional classifi cation instead of the category
classifi cation. The functional classifi cation is in line with the
information provision for the internal control of the company with
effect from 2012. The change has been adopted retrospectively from 1
January 2011. The change of system has no material effect on the
results and assets in 2011 and 2012.
The allocation of costs to the functional cost accounts can be analysed
as follows:
■ Cost of sales: comprises all production costs (including raw
material and energy costs) related to the recognised revenues.
■ Selling costs: comprises the costs of marketing and sales of the
products, including costs associated with sales but not related to
production (e.g. outgoing freight costs).
■ Research and development costs: comprises research costs with
the aim of acquiring new technological knowledge and
development costs associated with the development of new
products or processes for the start of commercial production.
■ General management costs: comprises the strategic and
management costs. The costs of support departments which do
not relate directly to the other cost accounts are also included
under general management costs.
3 PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL
STATEMENTS
The fi nancial statements are presented in millions of euros (the euro
being the Company's functional currency) unless stated otherwise. The
fi nancial statements have been prepared on the basis of historical cost,
except for the following material balance sheet items, which are
carried at fair value: derivatives and fi nancial instruments held for
trading purposes.
In preparing the fi nancial statements, the Executive Board has used
estimates and assumptions which affect the application of accounting
standards and reported amounts stated in the consolidated fi nancial
statements (see note 56). The actual results may differ from such
estimates. The estimates and underlying assumptions are continuously
assessed. Revised estimates are stated in the period in which the
estimates are revised and in future periods in which the revision has
consequences.
The accounting principles set out below have been applied consistently
by the Group's subsidiaries and joint ventures for the periods presented
in these consolidated fi nancial statements. Certain comparative
information has been adjusted for the sake of comparability.
4 CONSOLIDATION PRINCIPLES
4.1 Business combinations
Business combinations are accounted for by the acquisition method as
at the acquisition date, i.e. the date on which control passes to the
Group. Control means the Group is able to determine an entity's
fi nancial and operational policy in order to obtain benefi ts from the
entity's activities. In assessing control, the Group takes account of
potential voting rights which can be exercised at that time.
The Group determines the goodwill on the basis of the fair value of the
consideration paid, the carrying amount of any non-controlling interest
in the acquired undertaking and, if applicable, the fair value of the prior
interest in the acquiree. The net amount of the identifi ed assets
acquired and the accepted liabilities is then deducted. If the difference
is negative, a book profi t from an advantageous purchase is stated
directly in the profi t and loss account. Any non-controlling interests are
Notes to the consolidated fi nancial statements
100 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated fi nancial statements
Other participating interests over which no signifi cant infl uence is
exercised are carried at fair value and the dividend is stated in the
profi t and loss account when it is made payable. If no fair value is
available and other methods do not result in a reasonable estimate, the
investment is carried at cost less impairment.
4.5 Elimination of transactions on consolidation
Intragroup balances and transactions between the subsidiaries in the
Group and unrealised gains and losses on such transactions are
eliminated in the preparation of the consolidated fi nancial statements.
Unrealised gains on Group transactions with proportionally
consolidated joint ventures and investments stated in accordance with
the equity method are eliminated in proportion to the Group's interest
in the investment. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no indication of
impairment.
5 FOREIGN CURRENCIES
5.1 Transactions in foreign currencies
Receivables and liabilities denominated in foreign currencies are
converted into euros at the rate prevailing on the reporting date.
Transactions in foreign currencies are converted into euros at the
exchange rate applying on the transaction date. Currency translation
differences are stated in the profi t and loss account.
Non-monetary assets and liabilities which are denominated in foreign
currencies and valued on the basis of historical cost are converted at
the exchange rate on the transaction date.
5.2 Subsidiaries and joint ventures outside the eurozone
The revenues and expenses of subsidiaries outside the eurozone are
converted into euros at the exchange rate on the transaction date.
Assets and liabilities including goodwill and fair value adjustments in
respect of acquisitions are converted at the rate on the reporting date.
The resulting translation differences are carried in other comprehensive
income in equity. The proportionate share of the currency translation
difference is allocated to any non-controlling interests. If an activity
outside the eurozone is fully or partly divested, the accumulated
exchange rate difference is transferred from equity to the profi t and
loss account as part of the result of the sale.
carried at their proportionate share of the carrying amount of
identifi able assets of the acquired undertaking on the acquisition date.
The paid consideration includes no amount for the settlement of
existing relationships. Any such amount is stated in the profi t and loss
account.
Transaction costs other than those related to the issue of loans or
equity instruments allocated to the Group as a result of acquisitions
are charged to the result when they arise.
4.2 Acquisition of non-controlling interests
Acquired non-controlling interests are stated as transactions with
shareholders (directly as a charge to equity) and no goodwill is
therefore included.
4.3 Subsidiaries
Subsidiaries are undertakings in which the Company directly and/or
indirectly has a controlling interest. The fi nancial statements of
subsidiaries are included in the consolidated fi nancial statements from
the fi rst date on which control is exercised to the date on which such
control ends. Non-controlling interests in the Group's result and equity
are stated separately. Losses in connection with non-controlling
interests are allocated to the non-controlling interests, even if a defi cit
arises for the non-controlling interests in question.
4.4 Associated companies, joint ventures and other participating
interests
Associated companies are entities in which the Group has signifi cant
infl uence on the fi nancial and operational policy, but in which it has no
controlling interest. Signifi cant infl uence is assumed to exist if the
Group holds between 20% and 50% of the voting rights in another
entity. Associated companies are accounted for using the equity
method and are stated at cost including transaction costs on fi rst-time
inclusion. If the Group's share in losses exceeds the carrying value of
the associated company, the carrying value is stated at zero and further
losses are no longer stated, unless the Group has entered into a
liability or has made payments on behalf of the associated company.
Joint ventures are companies over which the Group has joint control
and in which such control has been set forth in an agreement and in
which strategic decisions on the fi nancial and operational policy are
taken on the basis of unanimity. Joint ventures are proportionally
consolidated.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 101
asset or liability. If no hedge accounting is applied, profi ts or losses on
the derivative fi nancial instrument are stated directly in the profi t and
loss account.
8 SEGMENT REPORTING
An operating segment is a part of the Group conducting business
activities which can result in revenues and expenses, including
revenues and expenses associated with transactions with other parts
of the Group. The Group determines and presents operating segments
on the basis of the information reported internally to the Chief
Operating Decision Maker (CODM) committees, which take the
important operating decisions in the segment.
The operating results of an operating segment are assessed
periodically by the CODM committees in order to decide on the
allocation of resources to the segment and for performance
assessment.
The investment expenses of a segment concern the total expenses
incurred during the reporting period for the acquisition of tangible fi xed
assets and intangible assets with the exception of goodwill.
The assets and liabilities of the segment concern items which are or
may reasonably be allocated directly.
Unallocated assets comprise profi t tax receivables and cash and cash
equivalents. The unallocated liabilities comprise interest-bearing loans
and profi t tax liabilities.
9 REVENUES
Revenues comprise the revenues from goods and services supplied to
third parties. These are stated at the fair value of the consideration
received or to be received, less taxes and any volume, trade or payment
discounts due.
Revenues from sales of goods are recognised in the profi t and loss
account when the main risks and benefi ts of ownership have been
transferred to the purchaser.
Revenues from services supplied are recognised in the profi t and loss
account in proportion to the extent of performance of the work applying
on the reporting date.
The rates of the main currencies against the euro are as follows:
Closing rate Average rate
2011 2012 2011 2012
US dollar 1.30 1.32 1.39 1.29
British pound 0.84 0.81 0.87 0.81
Danish krone 7.43 7.46 7.45 7.44
UAE dirham 4.77 4.86 5.11 4.73
Malaysian ringgit 4.11 4.04 4.25 3.98
Singapore dollar 1.68 1.61 1.75 1.61
Chinese yuan 8.16 8.22 8.99 8.12
Australian dollar 1.27 1.27 1.35 1.25
6 DERIVATIVES
The Group uses derivatives in order to hedge exchange rate and
interest rate risks resulting from operating, fi nancing and investing
activities. Examples are currency options and forward contracts as well
as interest rate caps and swaps. In accordance with its treasury policy,
the Group does not use derivatives for trading purposes. Nor does it
issue such derivatives.
Derivatives are valued at fair value on fi rst-time inclusion. The resulting
income or expense is stated directly in the profi t and loss account
unless hedge accounting is applied (see section 7).
The fair value of derivatives is the estimated amount which the Group
would receive or would have to pay in order to terminate the derivative
on the reporting date, taking into account the current exchange rates
and the current interest rate.
7 HEDGE ACCOUNTING
Where specifi c conditions are met, hedge accounting can be applied.
Under these specifi c conditions, there must be a demonstrable
relationship between the variability of the future cash fl ows or balance
sheet positions (of the hedged item) and the hedging instrument, the
relationship must be documented and the hedge must be suffi ciently
effective. The Group applies cash fl ow hedge accounting to interest
rate derivatives. In this situation, the effective portion of the changes
in the fair value of the derivative fi nancial instrument is stated directly
in other comprehensive income of the hedging reserve in equity. The
ineffective portion of the changes in the fair value of the derivative
fi nancial instrument is stated directly in the profi t and loss account. If
the hedged future transactions are stated in the profi t and loss account,
the transfer takes place from equity to the profi t and loss account or is
stated in the cost price on the fi rst-time inclusion of the non-fi nancial
102 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated fi nancial statements
13 FINANCIAL INCOME AND EXPENSES
Financial income and expenses include the interest income and
expenses on invested and borrowed monies, interest charges on
fi nancial lease payments, foreign exchange rate differences, dividends
from other participating interests and results of derivatives for which
no hedge accounting is used and the realised and ineffective portion of
the change in the fair value of derivatives for which hedge accounting
is used. Interest income and expenses are stated in the profi t and loss
account as they accrue on the basis of the effective interest method.
Material fi nancial expenses in the construction period which are
directly attributable to the acquisition, construction or production of an
eligible asset (which will require a considerable period before it is
ready for use or sale) are capitalised as part of the costs of that asset.
Dividend income from other participating interests is stated in the
profi t and loss account at the time at which the Group's right to
payment is established.
14 PROFIT TAX
The tax on profi t for the fi nancial year includes the profi t tax that is
payable, available for set-off and deferred in respect of the reporting
period. The profi t tax is stated in the profi t and loss account, except
where it relates to items which are included directly in equity or in
other comprehensive income. Profi t tax that is payable and available
for set-off in respect of the reporting period is the profi t tax which is
expected to be payable on the taxable result, calculated on the basis of
tax rates which have been set on the reporting date, or on which a fi rm
decision has been taken by the reporting date, and any corrections to
profi t tax payable in respect of previous years. Additional taxes on
profi t from dividend payments are stated at the same time as the
liability to pay the respective dividend.
No revenues are recognised if the extent of the revenues cannot be
reliably determined and if signifi cant uncertainties remain with regard
to the collection of the remuneration due, the associated costs or the
possible return of goods, and also if there is a protracted management
involvement with such goods.
The Group also carries out projects to manufacture assets under
contracts with third parties. The costs relating to a project are
recognised when they are incurred. As soon as the result of a project in
progress can be reliably estimated, revenues from that project are
recognised in proportion to its degree of completion. Expected losses
on projects are stated immediately in the profi t and loss account.
10 GOVERNMENT SUBSIDIES
Subsidies granted as compensation for expenses incurred by the Group
are systematically stated as income in the profi t and loss account in
the same period as that in which the subsidisable expenses are
incurred and as soon as there is a reasonable certainty that they will
be received and that the Group will fulfi l the attached conditions.
Subsidies granted to compensate the Group for the cost of an asset are
systematically stated as cost of sales in the profi t and loss account
during the useful life of the asset.
11 RAW MATERIALS AND MANUFACTURING SUPPLIES
The consumption of raw materials and manufacturing supplies is
calculated on the basis of historical cost.
12 LEASE PAYMENTS
Lease payments in respect of operational leasing are stated in the
profi t and loss account on a straight-line basis over the lease term.
Remuneration received as an incentive to effect leases is stated as an
integral part of the total lease costs in the profi t and loss account over
the lease term.
Financial lease payments are stated partly as fi nancial expenses and
partly as a repayment of the outstanding liability. The fi nancing costs
are allocated to each period of the total lease term in such a way that
this results in a constant periodic interest rate on the residual balance
of the liability.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 103
16 NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED
A number of new standards, amendments to standards and
interpretations were not yet in force in 2012 and have therefore not
been applied to these consolidated fi nancial statements:
■ IAS 19 revised – Employee Benefi ts, which becomes compulsory
in 2013. The main effects are that actuarial gains and losses are
credited or charged directly to group equity and the corridor
method is no longer permitted. In addition, the expected return on
fund investments must be equalised with the discount rate.
TenCate already credits or charges actuarial gains and losses
directly to group equity. Annual pension expenses are also
expected to increase by approximately € 2 million since the
expected return on fund investments is equal to the discount rate.
■ IFRS 11 – Joint arrangements, which becomes compulsory in 2013
and may give rise to changes in the treatment of joint ventures
and similar agreements. As a result of this standard, interests in
joint ventures will no longer be proportionally consolidated from
2013. The expected impact is limited.
The other new or amended standards are not expected to have any
material effect on the Group's consolidated fi nancial statements.
17 PRINCIPLES FOR THE PREPARATION
OF THE CASH FLOW STATEMENT
Cash fl ows from operating activities are presented on the basis of the
indirect method. Cash fl ows in foreign currencies are converted at the
exchange rate on the date of the cash fl ow or on the basis of averages.
Changes which have not resulted in cash fl ows, such as exchange rate
differences, acquisitions, fi nancial lease liabilities, changes in fair
value, recognised share-related transactions and similar transactions
are eliminated in this statement. Dividends paid to shareholders are
included in the cash fl ow from fi nancing activities. Dividends received
are stated in the cash fl ow from investing activities, and interest paid
is stated in the cash fl ow from operating activities. Overdrafts which
are immediately repayable and form part of the Group's cash
management are included in the balance of cash and bank current
accounts as part of the consolidated cash fl ow statement.
A receivable / provision is recognised for deferred tax differences
using the balance sheet liability method for temporary differences
between the carrying value of assets and liabilities for the fi nancial
reporting and the fi scal carrying value of the items concerned. No
provision is formed in respect of two temporary differences: non-tax-
deductible goodwill and the difference between the economic and
fi scal value of subsidiaries, associated companies, joint ventures and
other participating interests. The amount of the provision for deferred
profi t tax liabilities is based on the method by which the carrying value
of the assets and liabilities is expected to be realised or settled, using
tax rates which, on the reporting date, have been specifi ed by law or in
material terms.
Deferred profi t tax assets and liabilities are offset if there is a legally
enforceable right to offset the profi t tax assets and liabilities and such
assets and liabilities relate to profi t tax imposed by the same tax
authority on the same taxable entity, or on different taxable entities
which intend to offset the profi t tax assets and liabilities or whose
profi t tax assets and liabilities are realised simultaneously.
A deferred profi t tax asset is only recognised in respect of unused tax
losses, tax income and deductible temporary differences to the extent
that it is likely that future taxable profi ts will be available which can be
applied for the realisation of the timing difference. Deferred profi t tax
assets are reviewed on each reporting date and reduced if it is no
longer likely that the associated tax benefi t will be realised.
15 EARNINGS PER SHARE
The Group presents ordinary and diluted earnings per share for the
ordinary share capital. The earnings per ordinary share are calculated
on the basis of the net result attributable to shareholders of the Group
divided by the weighted average number of ordinary shares in issue
during the reporting period (corrected to take account of own shares).
In the calculation of the diluted earnings, the weighted average number
of ordinary shares in issue during the reporting period is corrected to
take account of the potential dilutive effect on the ordinary shares
arising from the share options granted to employees.
104 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated fi nancial statements
18.3 Expenses after first-time inclusion
Expenses after the fi rst-time inclusion of capitalised intangible assets
are capitalised only if they lead to an increase in the future economic
benefi ts embodied in the particular asset to which they relate. All other
expenses are charged to the profi t and loss account when they are
incurred.
18.4 Amortisation
Amortisation is calculated on the cost of the asset, less the residual
value.
Amortisation costs are charged on a straight-line basis to the profi t and
loss account in accordance with the estimated useful life of intangible
assets. Goodwill is tested each year on the reporting date to assess
whether any impairment has arisen. The amortisation of other
intangible assets begins as soon as the assets are available for use.
The estimated economic life is as follows:
■ Development costs 5 years
■ Other intangible assets 3 – 14 years
The amortisation method, economic life and residual value are
assessed periodically and adjusted if necessary.
19 TANGIBLE FIXED ASSETS
19.1 Owned assets
Tangible fi xed assets are valued at cost less accumulated depreciation
(see 19.4) and accumulated impairments (see note 23).
The cost of self-manufactured assets comprises material costs, direct
labour costs and any other costs attributable directly to the preparation
of the asset for use, any costs of dismantling and removing the asset,
the costs of restoring the location in which the asset is held and
capitalised fi nancing costs.
Where tangible fi xed assets consist of components with differing
useful lives, these are stated as separate items under tangible fi xed
assets.
The profi t or loss on the sale of a tangible fi xed asset is determined by
comparing the sales proceeds with the carrying value of the tangible
fi xed asset. The net difference is stated under general management
costs in the profi t and loss account.
18 INTANGIBLE ASSETS
18.1 Goodwill
Details of the valuation of goodwill on fi rst-time inclusion can be found
in note 4.1. Goodwill is valued at cost less accumulated impairments.
The carrying value of the goodwill on investments in associated
companies is included in the carrying value of the respective
investment. An impairment loss on an associated company is allocated
to the carrying value of the associated company investment. Goodwill
is allocated to cash generating units and is tested each year on the
reporting date to assess whether there is any indication of impairment.
18.2 Other intangible assets
The other intangible assets consist of:
Research and development
Expenses for research activities carried out with a view to acquiring
new scientifi c or technical knowledge and insights are stated as an
expense in the profi t and loss account when they are incurred.
Expenses for development activities, in which research results are used
for a plan or design for the production of new or substantially improved
products and processes, are capitalised if the development costs can
be reliably determined, the product or process is technically and
commercially feasible and the Group has suffi cient resources to
complete the development and use or sell the asset. The capitalised
expenses include material costs, direct labour costs, fi nancing costs
and an appropriate portion of directly attributable overheads. Other
development costs are stated as an expense in the profi t and loss
account when they are incurred. The capitalised development costs are
valued at cost less accumulated amortisation and accumulated
impairments (see note 23).
Other intangible assets
Other intangible assets acquired by the Group relate to customer
relationships, trademark rights, patents, software and similar rights.
These intangible assets are valued at cost less accumulated
amortisation and accumulated impairments (see note 23). Costs of
internally generated goodwill and trademarks are stated as an expense
in the profi t and loss account when they are incurred.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 105
21 TRADE DEBTORS AND OTHER RECEIVABLES
Trade debtors and other receivables with a term of less than one year
are stated at amortised cost less impairments.
Projects in progress commissioned by third parties concern the gross
amount yet to be charged that is expected to be collected from
customers for the contract work carried out up to the reporting date.
This item is carried at cost plus the profi t recognised up to that time
less invoiced instalments in proportion to the progress of the project
and recognised losses. The cost includes all expenditure directly
related to specifi c projects and an allocation of the fi xed and variable
indirect costs incurred.
Projects in progress commissioned by third parties under contracts in
which the amount of costs incurred plus the recognised profi t is higher
than the invoiced instalments are stated in the balance sheet under
other receivables. If the amount of invoiced instalments is higher than
the costs incurred plus recognised profi t, the difference is stated in the
balance sheet under trade creditors and other payables.
22 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and immediately
claimable credit balances with an original term of three months or less.
Overdrafts at banks which are immediately claimable and form an
integral part of the Group's cash management are included as part of
the cash and cash equivalents for the purposes of the cash fl ow
statement.
23 IMPAIRMENT
The carrying value of the Group's assets, except that of inventories
(see note 20) and deferred profi t tax assets (see note 14) is examined
at each reporting date in order to determine whether there are
indications of impairment.
If there are such indications, an estimate is made of the realisable
value of the asset. In the case of goodwill and intangible assets which
are not yet available for use, the realisable value is estimated at each
reporting date. This also applies if there is an indication of impairment.
An impairment is recognised when the carrying value of an asset or the
cash generating unit thereof is higher than the estimated realisable
value. It is fi rst charged to any allocated goodwill and then deducted
proportionately from the carrying value of the other assets.
19.2 Leased assets
Leases in which the Group actually assumes all the risks and benefi ts
of ownership are classifi ed as fi nancial leases. Tangible fi xed assets
which are acquired by means of fi nancial leases are valued on fi rst-
time inclusion at the lower of fair value and the present value of the
minimum lease payments at the inception of the lease, less
accumulated depreciation (see note 19.4) and impairments (see note
23). Lease payments are stated as described in note 12.
19.3 Expenses after first-time inclusion
Expenses incurred for the replacement of a component of a tangible
fi xed asset are capitalised provided the future economic benefi ts
resulting from the asset accrue to the Group and the cost of such
replacement expenses can be reliably determined. All other expenses
are charged to the profi t and loss account when they are incurred.
19.4 Depreciation
Depreciation is calculated on the cost of an asset less the residual
value. Depreciation is charged to the profi t and loss account on the
basis of the straight-line method over the estimated economic life of
each component of a tangible fi xed asset. Land is not depreciated.
The estimated economic life is as follows:
■ buildings 33 years
■ fi xtures and installations in buildings 10 years
■ plant and equipment 7 – 10 years
■ inventory 5 years
■ computers and offi ce equipment 3 – 5 years
The depreciation method, economic life and residual value are
assessed periodically and adjusted if necessary.
20 INVENTORIES
Inventories are stated at the lower of cost or net realisable value. The
cost of inventories is based on the FIFO (fi rst in, fi rst out) principle and
includes the costs incurred for the acquisition of the inventories, their
production or conversion and bringing them to the existing location and
condition. In the case of inventories of fi nished products and work in
progress, the cost includes in addition to the direct costs an appropriate
portion of the indirect costs based on the normal production capacity.
The net realisable value is the estimated sale price in ordinary
operations, less the estimated costs of completion and the sale costs.
106 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated fi nancial statements
24 SHARE CAPITAL
24.1 Share capital
The share capital is classifi ed as equity.
24.2 Repurchase of own shares
On the repurchase of share capital which is stated in the balance sheet
as equity, the amount of the paid consideration, including directly
attributable costs, is stated as a change in equity. Repurchased shares
are classifi ed in the reserve for own shares and presented as
a deduction from total equity.
24.3 Dividend
Dividend is stated as a liability in the period in which it is declared.
25 PENSION LIABILITIES
25.1 Defined contribution schemes
Liabilities relating to contributions to defi ned contribution pension
schemes are charged to the profi t and loss account in the period to
which they relate.
25.2 Defined benefit schemes
The Group's net liability in respect of defi ned benefi t pension schemes
is calculated separately for each scheme by estimating the amount of
the future entitlement which employees have earned in the present
and previous reporting periods in exchange for their services. This
entitlement is discounted in order to determine the present value, with
the fair value of the fund investments being deducted. The discount
rate is the yield on the reporting date of bonds which have an AA credit
rating and a period to maturity which approximates the term of the
Group's liabilities and are denominated in the currency in which the
entitlements arise. The calculation is performed by an authorised
actuary on the basis of the projected unit credit method. If the
entitlements under a pension scheme are increased, the proportion of
the higher entitlement which relates to employees' past service is
stated as an expense in the profi t and loss account on a straight-line
basis over the average period up to the vesting of the rights. If the
rights are vested immediately, the expense is stated immediately in the
profi t and loss account.
For the testing of impairments, assets which cannot be tested
individually are combined into the smallest distinguishable group of
assets which, as a result of continuous use, generates cash fl ow that is
broadly independent of the incoming cash fl ows from other assets or
groups of assets (the cash generating unit). Taking into account the
maximum size of an operating segment before aggregation (the
'operating segment ceiling test'), cash generating units to which
goodwill has been allocated for the testing of goodwill with regard to
impairment are combined in such a way that the level at which such
impairment is tested refl ects the lowest level at which goodwill is
monitored in internal reporting. Goodwill acquired in a business
combination is allocated to groups of cash generating units which are
expected to benefi t from the synergy advantages of the combination.
23.1 Calculation of the realisable value
The realisable value is the higher of the recoverable amount, less costs
to sell, and the value in use. In determining the value in use, the
present value of the estimated future cash fl ows is calculated using a
discount rate before tax which refl ects both the current market
valuations of the time value of money and the specifi c risks relating to
the asset or cash generating unit. In the case of an asset which
generates no cash receipts that are largely independent of other
assets, the realisable value is determined for the cash generating unit
to which the asset belongs.
23.2 Reversal of impairments
An impairment relating to goodwill cannot be reversed. In the case of
other assets, an assessment is made on the reporting date as to
whether an impairment must be reversed if there is a change in the
estimates on which the realisable value was based.
An impairment is only reversed to the extent that the carrying value of
the asset is not higher than the carrying value which would have been
determined after the deduction of depreciation, if no impairment had
been recognised.
Goodwill which is part of the carrying value of an investment in an
associated company is not recognised separately and therefore not
tested separately for impairment. Instead, the total amount of the
investment in an associated company is tested for impairment as a
single asset if there are objective indications that the investment in an
associated company may be subject to impairment.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 107
27.1 Claims and guarantees
The provision for claims relates to damages claims and any litigation
costs. The provision for guarantees relates to goods and services
supplied and is based on historical guarantee data.
27.2 Reorganisation
Reorganisation provisions are included if the Group has formalised a
detailed plan for the reorganisation and has begun or publicly
announced the reorganisation. The reorganisation provision does not
include costs incurred in relation to future activities.
27.3 Other personnel liabilities
Long-service leave and other allowances such as anniversaries form
part of the provisions under other personnel liabilities. These provisions
are accumulated over the respective period as in the case of defi ned
benefi t pension schemes, except that actuarial gains or losses are
recognised in the profi t and loss account in the period in which they
arise.
27.4 Environment
In accordance with the Group's published environmental policy and the
applicable legal obligations, a provision for the clearance of
environmental pollution is recognised when the pollution occurs.
27.5 Onerous contracts
A provision is recognised in the balance sheet for onerous contracts if
the benefi ts which the Group expects to obtain from a contract are
lower than the unavoidable costs of fulfi lling the liabilities under the
contract. The provision is valued at the lower of the present value of
the expected costs of terminating the contract and the present value of
the expected net costs of continuing the contract.
Actuarial gains and losses in respect of a pension scheme are credited
or charged directly to group equity.
If the calculation results in a receivable for the Group, the recognised
asset item is limited to an amount not exceeding any unrecognised
back-service costs and the present value of economic benefi ts in the
form of any future repayments by the fund or, if lower, future pension
contributions.
26 SHARE-BASED PAYMENTS
The option scheme enables the Group's management to acquire shares
in Royal Ten Cate.
The fair value of the granted options is stated under personnel costs,
with a corresponding entry in equity. The fair value is determined on
the grant date and is allocated over the period up to the time at which
the management acquires an unconditional right to the options. The
amount stated as costs is adjusted annually to the number of options
which will be exercised. The fair value of the granted options is
determined on the basis of the binomial model, taking account of the
conditions under which the options have been granted. Valuation
factors include the share price on the valuation date, the exercise price
of the instrument, the expected volatility, the weighted average
expected term of the instruments (based on past experience and the
conduct of the instrument holders), the expected dividends and the
risk-free interest rate (based on government bonds).
27 PROVISIONS
A provision is recognised in the balance sheet if there is a legally
enforceable or actual obligation as a result of a past event and it is
likely that an outfl ow of resources will be required to settle such
liability and such outfl ow can be reliably estimated. If the effect of this
is material, the provisions are determined by discounting the expected
future cash fl ows using a discount rate before profi t tax which refl ects
the current market valuations of the time value of money and, if
necessary, the specifi c risks of the liability. Interest accrual is stated as
a fi nancial expense.
108 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated fi nancial statements
■ Inventories
The fair value of inventories acquired as part of a business combination
is determined on the basis of the estimated sale price in normal
business operation, less the estimated costs of completion and the
sale costs, plus a reasonable profi t margin refl ecting the completion
and sale effort.
■ Trade debtors and other receivables
The fair value of trade debtors and other receivables, excluding
projects in progress commissioned by third parties, is estimated at the
present value of the future cash fl ows, on the basis of the market
interest rate applying on the reporting date. This fair value is
determined for information purposes or if the trade debtors and other
receivables are acquired by means of a business combination.
28 LONG-TERM DEBTS
When included for the fi rst time, interest-bearing loans received are
stated at fair value less directly attributable transaction costs. After
fi rst-time inclusion, interest-bearing loans are carried at amortised
cost, with the difference between the cost and the redemption price
being stated in the profi t and loss account on the basis of the effective
interest method over the term of the loans.
29 TRADE CREDITORS
Trade creditors and other payables are carried at amortised cost.
30 DETERMINATION OF FAIR VALUE
A number of principles and the Group's information provision require
the determination of the fair value of both fi nancial and non-fi nancial
assets and liabilities. For the purposes of valuation and information
provision, the fair value is determined on the basis of the following
methods. If applicable, further information on the principles for
determining the fair value is provided in the section of these notes
applying specifi cally to the respective asset or the respective liability.
■ Tangible fixed assets
The fair value of tangible fi xed assets included as a result of a business
combination is the estimated amount for which a property could be
traded on the valuation date between a willing buyer and a willing
seller in an arm's length transaction after proper marketing in which
the parties have each acted prudently and knowledgeably. The market
value of other tangible fi xed assets and inventories is based on the
listed market prices of comparable assets and items where available,
and on replacement costs where applicable.
■ Intangible assets
The fair value of patents and trademarks acquired as part of a business
combination is determined on the basis of the discounted estimated
royalties which have been avoided as a result of ownership of the
patent or trademark. The fair value of customer relationships acquired
in a business combination is determined using the excess earnings
method over several periods, with the respective assets being valued
after deduction of a real return on all other assets which jointly
constitute the associated cash fl ows. The fair value of other intangible
assets is based on the expected present value of the cash fl ow from
the use and ultimate sale of the asset.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 109
Notes to the profi t and loss account
Limited transactions take place between the segments. The prices for
these transactions are determined on an objective business basis.
There is no segment in which the Group depends on sales to a single
customer for all its revenues.
Analysis by geographic location
The segments operate on four continents, namely Europe, North
America, Australia and Asia. In the presentation of information based
on geographic segments, the revenues of the segment are based on the
geographic location of origin. The assets of the segments are based on
the geographic location of the assets.
The following page contains an overview of each of the reporting
segments. The performance is determined on the basis of the operating
result, as stated in the internal management report to the CODM
committees.
31 OPERATING SEGMENTS
The Group consists of three segments, as described below. The
segments offer a range of products and services, are managed
separately and use various technologies. The summary below describes
the activities of the various segments of the Group:
■ Advanced Textiles & Composites
Manufacture and sale of protective and safety fabrics for professional
wear, outdoor fabrics, composites for personal and vehicle protection
and composites for industrial applications and technological
applications in aerospace.
■ Geosynthetics & Grass
Manufacture and sale of fabrics, non-wovens and grids for civil
engineering, environmental projects, recreational and industrial
applications and manufacture and sale of synthetic turf fi bres and
backing for a range of applications.
■ Other activities
Manufacture and sale of rubber and foam rollers for the offi ce
equipment industry and related products, development, production and
sale of inkjet technology and related components for industrial
applications, as well as country holding companies and service
companies.
110 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the profi t and loss account
31.1 Analysis by operating segment
Advanced Textiles
& Composites
Geosynthetics
& Grass Others
Eliminations between
sectors Consolidated
in millions of euros 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012
EXTERNAL REVENUES 538.4 460.6 525.9 518.7 74.5 69.7 – – 1,138.8 1,049.0
Revenue from transactions
between segments* – – – – – – – – – –
Depreciation and amortisation – 15.3 – 15.7 – 28.9 – 30.7 – 3.7 – 5.2 – – – 47.9 – 51.6
OPERATING INCOME 64.7 18.5 20.8 25.1 4.1 – 6.1 – – 89.6 37.5
Financial income1 0.2 0.3
Financial expenses1 – 11.3 – 12.5
Profi t tax – 18.7 – 8.7
Net result of associated
companies – – – 1.3 – 0.3 – – – – – 1.3 – 0.3
ASSETS AND LIABILITIES
Assets of segments 387.2 341.9 484.7 454.8 76.8 65.0 – – 948.7 861.7
Investments in associated
companies – – 4.6 4.1 – – – – 4.6 4.1
Unallocated assets – – – – – – – – 50.1 60.1
TOTAL ASSETS 387.2 341.9 489.3 458.9 76.8 65.0 – – 1,003.4 925.9
Liabilities of segment2 82.1 62.7 80.1 74.8 49.6 61.7 – – 211.8 199.2
Unallocated liabilities – – – – – – – – 322.1 271.4
TOTAL LIABILITIES 82.1 62.7 80.1 74.8 49.6 61.7 – – 533.9 470.6
Investment expenditure 8.3 9.4 12.2 5.3 5.2 1.9 25.7 16.6
1 Excluding € 0.1 million of exchange rate differences (2011: € 0.2 million).
2 Excluding intercompany loans.
* Adjusted for comparison purposes.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 111
33 PERSONNEL COSTS 2011 2012
Wages and salaries 149.7 154.9
Social charges 29.8 32.3
Costs of option scheme 1.9 2.0
Pension costs 4.3 4.2
Temporary personnel 14.7 14.5
Other personnel costs 4.8 5.6
205.2 213.5
The pension costs amount to € 4.2 million. This fi gure includes income
of € 0.3 million (2011: expense of € 0.7 million) in respect of defi ned
benefi t schemes (see note 48.3) and an expense of € 4.5 million (2011:
€ 3.6 million) in respect of defi ned contribution schemes. The income in
respect of defi ned benefi t schemes includes non-recurring income of
€ 3.3 million (see note 48)
The average number of employees (permanent and temporary in the
Group in 2012 was 4,941 (2011: 4,797).
34 GENERAL MANAGEMENT COSTS
The general management costs include the following other operating
expenses and income.
Government subsidies amount to € 1.7 million (2011: € 2.4 million) and
relate particularly to subsidised research and development projects.
In 2012 the book profi t on the sale of tangible assets amounted to
€ 0.3 million (2011: € 3.4 million).
In 2011, income amounting to € 2.1 million was recognised in respect
of the acquisition of control of GreenFields BV and ABDS ApS.
31.2 Analysis by geographic location
Revenues by origin Non-current assets by origin
2011 2012 2011 2012
Netherlands 232.9 209.4 65.9 59.0
Rest of Europe 197.9 192.0 103.5 97.3
North America 544.7 468.9 154.2 153.2
Asia / Australia /
Middle East 163.3 178.7 175.9 160.7
Total 1,138.8 1,049.0 499.5 470.2
* Non-current assets exclude derivative fi nancial instruments and deferred profi t
tax assets.
32 ACQUISITIONS AND SALE OF PARTICIPATING INTERESTS
32.1 Acquisitions
On 2 May 2012 the Group Acquired full control of PMC Baycomp. PMC
Baycomp has technologies in thermoplastic composites and
components for applications including the automotive industry, oil and
gas extraction and consumer electronics. For reporting purposes, this
acquisition has been included in the Advanced Textiles & Composites
sector.
These acquisitions are being accounted for in accordance with the
acquisition method (IFRS 3). The acquisition amounts have been
allocated to the identifi ed acquired assets and liabilities, based on the
fair value. The expected synergy effects for the Group result in an
amount of € 4.6 million of goodwill paid for the acquisition.
The acquisition has no material impact on the assets and liabilities.
The purchase price allocation for the aforementioned acquisition has
not yet been completed.
In 2012 an amount of € 15.7 million was paid in respect of acquisitions.
The effect of the acquisition on 2012 revenues amounts to
€ 7.6 million. The acquisition has no effect on the 2012 result after tax.
The revenues and net results would not differ materially if the
acquisition had taken place on 1 January 2012. The Group incurred
expenses of € 1.0 million in connection with the acquisitions,
comprising particularly external legal expenses and due diligence
costs.
*
112 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the profi t and loss account
35 NET FINANCIAL EXPENSES 2011 2012
Interest income 0.2 0.3
Foreign currency exchange rate differences – 0.1
Financial income 0.2 0.4
Interest expenses – 8.0 – 8.9
Realised change in fair value of derivatives for which hedge accounting is used – 2.8 – 3.4
Ineffective portion of change in fair value of derivatives for which hedge accounting is used – 0.2 – 0.1
Result of derivatives for which no hedge accounting is used – 0.3 – 0.1
Foreign currency exchange rate differences – 0.2 –
Financial expenses – 11.5 – 12.5
Net financial expenses – 11.3 – 12.1
36 PROFIT TAX 2011 2012
Profit tax payable
Current fi nancial year – 16.9 – 10.6
Recognition of previously unrecognised tax losses 0.2 0.1
Underprovision (overprovision) in previous years 0.7 –
– 16.0 – 10.5
Deferred profit tax
Origination and reversal of temporary differences – 4.2 – 1.0
Recognition of previously unrecognised tax losses 0.1 0.1
Change in unrecognised temporary differences 1.1 2.7
Change in tax rates 0.3 –
– 2.7 1.8
Total profit tax charge in profit and loss account – 18.7 – 8.7
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 113
Reconciliation with applicable profit tax rate 2011 2012
Result before profi t tax 78.3 25.4
Tax on profi t at average weighted local profi t tax rate 29.8% 23.3 30.7% 7.8
Non-tax-deductible costs 1.4% 1.1 5.1% 1.3
Tax-exempt income / deductions – 6.9% – 5.4 – 13.4% – 3.4
Prior years adjustments – 0.9% – 0.7 0.0% –
Change in tax rates – 0.4% – 0.3 0.0% –
Losses in reporting year for which no deferred tax asset has been recognised 2.4% 1.9 29.2% 7.4
Change in tax losses from previous years for which no deferred tax asset has been recognised – 0.4% – 0.3 – 0.8% – 0.2
Change in unrecognised deferred tax assets in respect of temporary valuation differences – 1.4% – 1.1 – 10.6% – 2.7
Other differences 0.3% 0.2 – 5.9% – 1.5
Tax charge in the profit and loss account 23.9% 18.7 34.3% 8.7
The rise in the weighted average tax charge from 29.8% to 30.7% was due in particular to changes in the various countries’ shares in the result
before profi t tax. In comparison with 2011, a larger share of the result was generated in countries with a relatively higher tax rate in 2012.
The rise in the effective tax rate from 23.9% to 34.3% is due particularly to the increase in losses in countries in which no full deferred tax assets
are held.
114 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Notes to the consolidated balance sheet
37 INTANGIBLE ASSETS Goodwill Change
Other intangi-
ble assets Total
in millions of euros
Cost
Balance as at 1 January 2011 195.0 10.0 77.4 282.4
Acquisitions through business combinations 14.0 – 18.2 32.2
Additions – 3.0 1.4 4.4
Exchange rate differences 5.5 0.3 2.5 8.3
Balance as at 31 December 2011 214.5 13.3 99.5 327.3
Acquisitions through business combinations 4.6 – 3.6 8.2
Additions – 4.2 0.4 4.6
Exchange rate differences – 2.1 – 0.1 – 0.4 – 2.6
Balance as at 31 December 2012 217.0 17.4 103.1 337.5
Amortisation
Balance as at 1 January 2011 2.4 1.6 35.6 39.6
Amortisation – 1.3 11.6 12.9
Exchange rate differences 0.1 0.1 1.6 1.8
Balance as at 31 December 2011 2.5 3.0 48.8 54.3
Amortisation – 2.6 11.9 14.5
Exchange rate differences – – 0.1 – 0.6 – 0.7
Balance as at 31 December 2012 2.5 5.5 60.1 68.1
Carrying value
Balance as at 1 January 2011 192.6 8.4 41.8 242.8
Balance as at 31 December 2011 212.0 10.3 50.7 273.0
Balance as at 31 December 2012 214.5 11.9 43.0 269.4
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 115
37.1 Amortisation/impairment
The Group recognised no impairment losses on intangible assets in
2012 (2011: € 0).
37.2 Impairment testing for cash generating units which include
goodwill
The following units include goodwill items:
2011 2012
TenCate Grass 120.0 118.4
TenCate Advanced Armour EU 36.0 36.0
TenCate Advanced Composites USA 20.2 24.3
TenCate Armour USA 22.6 22.2
Xennia Technology 9.2 9.4
Others 4.0 4.2
212.0 214.5
The Group tested the existing goodwill for impairment in 2012.
The realisable value has been determined on the basis of the value in
use. The value in use is based on the future cash fl ows over the
forthcoming four years, based on historical empirical data, market
expectations and strategic plans. No growth rate is applied for the
period beyond four years. The value in use in 2012 has been determined
in the same way as in 2011. On the basis of this test, no goodwill
impairment has been recognised. The changes in 2012 related to
acquisitions and exchange rate differences.
Principal assumptions made in estimating the present value of cash
flows
The principal assumptions made in calculating the realisable value
concern discount rates, revenue growth and gross margins.
Discount rate
The discount rate is a pre-tax measure based on the risk-free interest
rate in the government bond market, adjusted for the risk premium for
both the higher risk of securities investments and the Group's systemic
risk. The pre-tax discount rates used range from 9.3% to 9.6% (2011:
8.6% to 11.2%).
Revenue growth
The expected revenue growth is expressed as the compound annual
growth in the fi rst four years of the schedules used to test impairment
and is based on past experience, market expectations and strategic
plans.
Gross margin
The gross margin is the margin based on cost prices (in accordance
with the inventory valuation principles) as a percentage of expected
revenues. 2016 is the fi nal year of the cash fl ow forecast. The 2016
cash fl ow forecast is also used to calculate the perpetual cash fl ow.
Sensitivity to changes in assumptions
We have examined the sensitivity of the principal assumptions
(discount rate, revenue growth and gross margin) and concluded that in
the TenCate Grass and Xennia units an increase in the discount rate or
a decrease in the gross margin (as a percentage of revenues) of over
1% would cause the carrying value to exceed the realisable value
(2011: TenCate Grass 0.9%). With regard to the other units, it was
concluded that on a reasonable basis an adjustment to one of these
assumptions would not cause the carrying value to exceed the
realisable value.
116 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated balance sheet
38 TANGIBLE FIXED ASSETS Land and
buildings
Plant and
equipment
Other
operating
assets
Operating
assets
under
construction Total
Cost
Balance as at 1 January 2011 137.8 415.7 47.3 6.7 607.5
Acquisitions through business combinations 6.9 10.7 1.3 – 18.9
Additions 1.3 22.1 2.8 – 4.9 21.3
Disposals – 5.4 – 2.1 – 0.8 – – 8.3
Exchange rate differences 2.6 7.2 0.6 0.3 10.7
Balance as at 31 December 2011 143.2 453.6 51.2 2.1 650.1
Acquisitions through business combinations – 1.1 0.1 0.6 1.8
Additions 0.8 8.5 2.6 0.1 12.0
Disposals – 0.2 – 4.2 – 1.4 – – 5.8
Deconsolidation – – 0.8 – – – 0.8
Exchange rate differences – 0.7 – 2.5 – 0.1 – – 3.3
Balance as at 31 December 2012 143.1 455.7 52.4 2.8 654.0
Depreciation
Balance as at 1 January 2011 63.9 291.7 37.7 – 393.3
Depreciation 5.7 25.8 3.5 – 35.0
Divestments – 3.2 – 1.9 – 0.7 – – 5.8
Exchange rate differences 0.8 4.5 0.4 – 5.7
Balance as at 31 December 2011 67.2 320.1 40.9 – 428.2
Depreciation 5.8 27.7 3.6 – 37.1
Divestments – 0.2 – 4.0 – 1.3 – – 5.5
Deconsolidation – – 0.1 – – – 0.1
Exchange rate differences – 0.4 – 1.9 – 0.1 – – 2.4
Balance as at 31 December 2012 72.4 341.8 43.1 – 457.3
Carrying value
Balance as at 1 January 2011 73.9 124.0 9.6 6.7 214.2
Balance as at 1 January 2012 76.0 133.5 10.3 2.1 221.9
Balance as at 31 December 2012 70.7 113.9 9.3 2.8 196.7
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 117
Associated companies and joint ventures
The summary fi nancial data have not been adjusted in respect of the
percentage owned by the Group and can be analysed as follows as at
31 December:
2011 2012
Non-current assets 26.8 26.9
Current assets 26.8 30.7
Total assets 53.6 57.6
Current liabilities 18.7 21.4
Non-current liabilities 7.7 8.9
Total liabilities 26.4 30.3
Revenues 64.8 111.0
Costs 69.0 112.3
Profit / (Loss) – 4.2 – 1.3
The changes in the associated companies item were as follows:
2011 2012
Balance as at 1 January 5.2 4.6
Investments 5.5 –
Divestment as a result of acquiring control – 5.2 –
Result – 1.3 – 0.3
Exchange rate differences 0.4 – 0.2
Balance as at 31 December 4.6 4.1
39.2 Financial fixed assets
The fi nancial fi xed assets comprise long-term receivables and
investments.
The main long-term receivables and investments concern invested
pension assets at a number of American subsidiaries of € 9.6 million
(2011: € 8.2 million) and an advance payment in connection with long-
term lease rights in China and Malaysia amounting to € 2.1 million
(2011: € 2.2 million).
38.1 Impairment and reversal of impairment
The Group recognised no impairment of tangible fi xed assets in 2012
(2011: € 0). No impairment losses were reversed during the year.
38.2 Leased buildings, plant and equipment
The Group leases buildings, plant and equipment under a number
of fi nancial leases.
The net carrying value of these assets as at 31 December 2012 was
€ 4.2 million (31 December 2011: € 4.8 million). The leased buildings,
plant and equipment serve as collateral for the fi nancial lease liabilities
(see note 47).
38.3 Collateral
As at 31 December 2012, plant and equipment belonging to Ten Cate –
Union Protective Fabrics Asia ltd worth € 7.1 million (2011:
€ 7.0 million) was pledged as collateral for a credit facility of
€ 9.9 million (2011: € 9.8 million). € 5.6 million of this credit facility
was drawn as at the end of 2012 (2011: € 6.8 million).
39 INVESTMENTS IN ASSOCIATED COMPANIES AND FINANCIAL
FIXED ASSETS
39.1 Associated companies
The associated companies item at the end of 2012 relates to the 30%
interest in the shares of Hellas, the 25% interest in the shares
of Landscape Solutions B.V. and the 49% interest in GreenFields
(All Sports) UK ltd. The share in the net income of associated
companies amounted to – € 0.3 million (2011: – € 1.3 million). TenCate
has the option from December 2011 of increasing its interest by 7% per
year at an acquisition price dependent on the development of the
EBITDA of Hellas.
The Group received no dividend payments from associated companies
in 2012 (2011: € 0). The associated companies have a carrying value
of € 4.1 million as at 31 December 2012 (31 December 2011:
€ 4.6 million).
118 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated balance sheet
40 DEFERRED PROFIT TAX ASSETS AND LIABILITIES
The deferred profi t tax assets and liabilities recognised in the balance
sheet are attributable to the following items:
Assets Liabilities Net
2011 2012 2011 2012 2011 2012
Intangible assets – – – 9.1 – 7.9 – 9.1 – 7.9
Tangible fi xed assets – – – 13.1 – 11.4 – 13.1 – 11.4
Financial fi xed assets 0.1 – – – 0.1 –
Inventories 5.6 6.6 – – 5.6 6.6
Derivatives 1.9 1.3 – – 1.9 1.3
Other receivables 0.7 – – – 0.3 0.7 – 0.3
Pension provisions 2.2 7.5 – – 2.2 7.5
Other provisions 9.6 9.8 – – 9.6 9.8
Tax value of recognised loss carry-forwards 12.9 13.1 – – 12.9 13.1
Other items 2.3 2.5 – – 2.3 2.5
Deferred profi t tax asset / liability 35.3 40.8 – 22.2 – 19.6 13.1 21.2
Set-off of assets and liabilities – 14.2 – 10.8 14.2 10.8 – –
Net deferred profit tax asset / liabilities 21.1 30.0 – 8.0 – 8.8 13.1 21.2
The changes in the temporary differences during the fi nancial year can
be analysed as follows:
Balance as at
1 January 2011
Recognised
in profi t
and loss
Recognised
in other
comprehen-
sive income
Acquired
through
business
combinations
Balance as at
31 December
2011
Recognised
in profi t and
loss
Recognised
in other
comprehen-
sive income
Acquired
through
business
combinations
Balance as at
31 December
2012
Intangible assets – 10.1 3.6 – – 2.6 – 9.1 2.5 – – 1.3 – 7.9
Tangible fi xed assets – 5.1 – 8.0 – – – 13.1 1.3 – 0.4 – 11.4
Financial fi xed assets – 0.1 – – 0.1 – 0.1 – – –
Inventories 5.3 0.3 – – 5.6 0.8 – 0.2 6.6
Derivatives 1.3 0.3 0.3 – 1.9 – 0.4 – 0.2 – 1.3
Other receivables 1.0 – 0.3 – – 0.7 – 1.0 – – – 0.3
Pension provisions 4.2 – 4.0 2.0 – 2.2 – 1.6 6.9 – 7.5
Other provisions 4.1 5.5 – – 9.6 – 0.1 – 0.3 9.8
Tax value of recognised
loss carry-forwards 13.7 – 2.2 1.4 – 12.9 0.2 – – 13.1
Other items 0.3 2.0 – – 2.3 0.2 – – 2.5
Deferred profit tax
asset / liability 14.7 – 2.7 3.7 – 2.6 13.1 1.8 6.7 – 0.4 21.2
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 119
42 TRADE DEBTORS 2011 2012
Due from third parties 150.0 136.2
Due from associated companies 1.3 3.2
Due from joint ventures 1.1 0.6
Trade debtors 152.4 140.0
Trade and other receivables with a term of less than one year are
stated at amortised cost less impairments. Transfers to provisions for
doubtful debts are included in the profi t and loss account under cost of
sales.
As at 31 December 2012 trade debtors with a value of € 6.5 million
(2011: € 6.5 million) were encumbered as security for credit facilities
amounting to € 6.5 million (2011: € 6.5 million). € 6.5 million of this
credit facility was drawn as at the end of 2012 (2011: € 6.5 million).
43 OTHER RECEIVABLES 2011 2012
Amount receivable in respect of other taxes 3.3 4.3
Derivatives at fair value 1.0 0.3
Projects in progress 3.5 2.1
Other receivables and prepayments 14.4 9.2
Other receivables 22.2 15.9
Amounts receivable in respect of other taxes relate mainly to
reclaimable VAT.
As at 31 December 2012 the prepayments amounted to € 6.0 million
(2011: € 7.7 million).
As at 31 December 2012 the total costs and recognised profi t
associated with projects in progress, less recognised losses, amounted
to € 20.2 million (2011: € 12.4 million). Trade debtors included no
amounts deducted in respect of projects in progress commissioned by
third parties (2011: € 0.2 million).
The tax effect of the other comprehensive income in Group equity is
€ 6.7 million (2011: € 3.7 million) and relates to the actuarial results in
respect of pensions and the hedging reserve.
The realisation of the deferred profi t tax assets depends on the future
taxable profi t being higher than the profi t from the reversal of taxable
temporary differences. On the basis of a projection of the estimated
taxable profi t and the existing fi scal planning possibilities, it is
considered likely that suffi cient taxable profi t will be generated in
future to realise these deferred profi t tax assets.
Deferred profit tax assets not recognised in the balance sheet
As at 31 December 2012 there were € 89.4 million (2011: € 66.2 million)
of unused losses available for set-off. No deferred profi t tax asset has
been recognised in respect of this amount because it is currently
unlikely that future taxable profi t will be available to the Group for the
losses to be set off.
The amount of profi t tax concerned as at 31 December 2012 was
€ 22.2 million (2011: € 16.1 million).
The expiry periods of the unused losses available for set-off are shown
in the table below:
2011 2012
Within 2 to 5 years 11.4 17.5
After 5 years 24.0 27.7
Unspecifi ed period 30.8 44.2
Non-recognised losses available
for set-off 66.2 89.4
41 INVENTORIES 2011 2012
Raw materials and manufacturing supplies 90.3 60.0
Semi-manufactures 59.8 50.3
Finished products 117.8 116.1
Inventories 267.9 226.4
In 2012 the reduction in the inventory value included as an expense
amounted to a net recoverable amount of € 12.6 million (2011:
€ 4.2 million). The reversal of the reduction in the inventory value in
2012 amounted to € 0.2 million (2011: € 3.2 million). The inventory
value included as an expense and the reversal have been stated under
cost of sales.
120 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated balance sheet
45.2 Repurchased ordinary shares 2011 2012
number x 1,000
Outstanding and fully paid as at 1 January 433 620
Repurchase of own shares 309 –
Own shares for conversion of physical
securities – 3
Exercise of options – 110 – 39
Directors’ remuneration – 10 –
Issued in connection with share savings plan – 2 –
Outstanding and fully paid
as at 31 December 620 584
Ordinary shares are repurchased to prevent earnings per share being
diluted by the granting of options. No own shares were repurchased in
2012 (2011: 308,820 shares).
Repurchase of own shares
The general meeting of shareholders has granted the Executive Board
the power to acquire fully paid-up shares in the Company (or
certifi cates thereof) for the period ending on 18 October 2013. The
maximum number of shares which may thus be acquired is 10% of the
issued capital at the time of acquisition of the shares (or certifi cates
thereof).
45.3 Share premium
The share premium reserve is to be considered as paid-up capital.
45.4 Translation reserve
The translation reserve comprises all exchange rate differences which
arise due to the translation of the fi nancial statements of activities
outside the eurozone. These exchange rate differences are carried in
equity. The accumulation of the respective amount began on 1 January
2004 and is not available for distribution to shareholders.
45.5 Hedging reserve
The hedging reserve consists of the unrealised effective portion of the
accumulated change in the fair value of the derivatives used to hedge
the interest rate risk. The reserve is not available for distribution to
shareholders. A negative reserve reduces the amount freely available
for distribution from the reserves.
The balance of the hedging reserve after tax on 31 December 2012 was
– € 3.9 million (2011: – € 4.5 million).
44 CASH AND CASH EQUIVALENTS 2011 2012
Bank balances 22.6 26.6
Cash balances 0.1 0.1
Cash and cash equivalents 22.7 26.7
Cash loans, overdrafts – 35.4 – 35.4
Cash in cash flow statement – 12.7 – 8.7
All amounts were freely available at the end of 2012 and 2011.
45 TOTAL SHAREHOLDERS' EQUITY
A statement of changes in equity can be found on page 98.
45.1 Ordinary shares 2011 2012
number x 1,000
Outstanding and fully paid as at 1 January 25,502 25,929
Issued stock dividend 427 569
Outstanding and fully paid
as at 31 December 25,929 26,498
The authorised share capital amounts to € 200 million, divided into
80 million ordinary shares of a par value of € 2.50. The issued capital
as at 31 December 2012 amounts to 26,497,666 ordinary shares with a
par value of € 2.50 (as at 31 December 2011: 25,928,914 ordinary
shares of a par value of € 2.50).
The holders of ordinary shares are entitled to dividend as approved
periodically by the General Meeting of Shareholders. They are also
entitled to cast one vote per share at meetings of the Company.
Issue of shares and limitation of pre-emptive right
The general meeting of shareholders has granted the Executive Board
the power to issue shares and to exclude or restrict the pre-emptive
right for the period ending on 18 October 2013. The power to issue
shares concerns 10% of the issued share capital plus a further issue up
to a maximum of 10% of the issued share capital in the event that the
issue takes place in the context of a merger or acquisition. The same
applies to the power of the Executive Board, with the approval of the
Supervisory Board, to restrict or exclude the pre-emptive right.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 121
number of outstanding ordinary shares during the 2012 fi nancial year of
25,895,322 (2011: 25,452,488), calculated as follows:
2011 2012
Net profit for financial year attributable
to holders of ordinary shares 58.7 22.3
Weighted average number of ordinary shares
2011 2012
number x 1,000
Outstanding ordinary shares on 1 January 25,502 25,929
Effect of ordinary shares held (including
repurchased shares) – 433 – 620
Effect of shares issued in connection
with stock dividend 427 569
Effect of repurchase of own shares – 133 –
Effect of shares issued as result
of exercised option rights 79 17
Effect of director’s remuneration 9 –
Effect of shares issued as result of share
savings plan 1 –
Weighted average number of ordinary
shares as at 31 December 25,452 25,895
46.2 Diluted earnings per share
The calculation of the diluted earnings per share as at 31 December
2012 is based on the net income of € 22.3 million (2011: € 58.7 million)
attributable to holders of ordinary shares and the weighted average
number of outstanding ordinary shares during the 2012 fi nancial year of
26,040,448 (2011: 25,735,802), calculated as follows:
2011 2012
Net profit for financial year attributable
to holders of ordinary shares 58.7 22.3
45.6 Other reserves and undistributed result
Subsequent to the reporting date the following dividend has been
proposed, which has not yet been included in the balance sheet. It is
proposed to set the dividend in respect of 2012 at € 0.50 per € 2.50 par
value share (2011: € 0.95), payable optionally in cash or as stock
dividend.
2011 2012
€ 0.50 par value share (2011: € 0.95) 24.0 13.0
45.7 Objective with regard to equity and financing
The objective with regard to equity and fi nancing, as in 2011, is to
guarantee the continuity of the Company by means of attractive returns
for shareholders and by guaranteeing benefi ts for other stakeholders.
The capital structure is adjusted if necessary in line with economic
developments and risks relating to assets.
With regard to fi nancing, the longer-term objective is a ratio of net
debt to EBITDA of a maximum of 2.5.
The calculation as at 31 December is as follows:
2011 2012
Non-current interest-bearing liabilities 275.1 220.3
Short-term portion of non-current liabilities 0.9 0.9
Cash loans, overdrafts 35.4 35.4
Total debt 311.4 256.6
Minus: cash and cash equivalents 22.7 26.7
Net debt 288.7 229.9
EBITDA* 136.0 90.3
Net debt / EBITDA 2.12 2.55
* EBITDA adjusted to take account of the effect of acquired and divested businesses,
non-recurring items and some components of the net fi nancial expenses, such as
currency translation differences: € 1.2 million (2011: – € 1.5 million).
46 EARNINGS PER SHARE
46.1 Ordinary earnings per share
The calculation of the ordinary earnings per share as at 31 December
2012 is based on the net income of € 22.3 million (2011: € 58.7 million)
attributable to holders of ordinary shares and a weighted average
122 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated balance sheet
Weighted average number of ordinary shares 2011 2012
number x 1,000
Weighted average number of ordinary shares as at 31 December 25,452 25,895
Effect of outstanding option rights 284 145
Weighted average number of ordinary shares (after dilution) as at 31 December 25,736 26,040
47 LONG-TERM DEBTS 2011 2012
Syndicated loan 267.4 215.0
Financial lease liabilities 3.2 2.2
Other loans 5.4 4.0
Total 276.0 221.2
Less: repayment of loans in forthcoming years – 0.9 – 0.9
275.1 220.3
2011
Total
2012
Total
2013
< 1 year
2014
1-2 years
2015/17
2-5 years
2018
and after
> 5 years
Syndicated loan
EUR – Variable interest 47.8 48.6 – – 48.6 –
USD – Variable interest 219.6 166.4 – – 166.4 –
Financial lease liabilities
EUR fi xed interest 8.0% 0.3 0.1 0.1 – – –
EUR variable interest 2.5 2.0 0.4 0.6 1.0 –
THB fi xed interest 3.45% – 3.65% 0.1 – – – – –
GBP variable interest 0.1 0.1 0.1 – – –
AUD variable interest 0.2 – – – –
Other loans
USD variable interest 3.1 3.0 – – – 3.0
EUR interest-free 1.3 1.0 0.3 0.2 0.5 –
EUR variable interest 1.0 – – – – –
276.0 221.2 0.9 0.8 216.5 3.0
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 123
Of the total of long-term loans, 100% had variable interest in 2012
(2011: 99%). The risk associated with this variability has been hedged
by means of interest rate swaps. Details of the hedging of the interest
rate risk borne by the Group can be found in note 50.3.
48 PENSION LIABILITIES 2011 2012
Defined-benefit pension schemes
Present value of obligations 332.5 370.2
Fair value of plan assets 321.0 340.6
11.5 29.6
Asset ceiling – 0.2
Present value of net liabilities
of defi ned-benefi t pension schemes 11.5 29.8
Others liabilities in respect of pensions 11.1 12.5
Pension liabilities 22.6 42.3
48.1 Changes in the valuation of the liability
as at the reporting date 2011 2012
Balance as at 1 January 295.8 332.5
Service costs 2.8 4.3
Members’ contributions 2.7 2.9
Interest costs 15.5 14.2
Benefi ts paid – 16.7 – 16.1
Income from change to pension scheme – – 3.3
Actuarial differences 32.4 35.7
Balance as at 31 December 332.5 370.2
48.2 Investments 2011 2012
Balance as at 1 January 316.7 321.0
Expected return 17.6 15.5
Employers’ contribution 6.7 6.4
Members’ contributions 2.7 2.9
Actuarial differences – 6.0 10.9
Benefi ts paid – 16.7 – 16.1
Balance as at 31 December 321.0 340.6
The syndicated loan of € 450.0 million (2011: € 450.0 million), which is
available for drawing in various currencies, was concluded with a
syndicate of 11 banks. € 215.0 million of this facility was drawn as at
31 December 2012 (2011: € 267.4 million). The loan is due to mature on
8 December 2015. Repayment is due in full on the maturity date. The
loan is valued at amortised cost in accordance with the effective
interest method.
The interest rate payable is linked to the net debt/EBITDA ratio, which
is calculated quarterly in respect of the preceding 12 months.
The EBITDA for acquired and divested businesses is annualised.
In accordance with the agreements entered into with the banks, the
EBITDA is also adjusted to take account of non-recurring items and a
number of components of the net fi nancial expenses, such as currency
translation differences. The interest margin above Euribor or Libor will
be between 0.70% and 1.50%. A utilisation fee of 0.20% is payable if
more than 50% of the facility is drawn. At the end of 2012 the interest
margin was 1.20% (2011: 0.95%).
The aforementioned syndicated loan is subject to a number of
covenants, the principal of which are:
■ total net debt/EBITDA less than 3.25 at the end of the fi rst quarter
of each year, less than 3.50 at the end of the second quarter of
each year and less than 3.00 at the end of the third and fourth
quarters of each year, with the once-only possibility of an increase
of 0.25 for two successive quarters following an acquisition,
but no higher than 3.50;
■ EBITDA/net interest greater than 4;
■ joint guarantee of subsidiaries with total assets of at least 60%
of the Group total.
The Group was meeting these covenants as at the reporting date.
In the event of a change of control of the Company, the syndicated
loan is immediately repayable if a two-thirds majority of the lenders
so require.
The € 2.0 million (2011: € 2.5 million) fi nancial lease liability relates
to a building in Hungary.
The USD loan with variable interest concerns a $ 4.0 million loan
(2011: $ 4.0 million) from the Development Authority of Pike County
Industrial Revenue Bonds. Repayment is due in full in 2018.
124 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the consolidated balance sheet
The board of the pension fund has applied a 2.3% reduction in pension
rights with effect from 1 April 2013. On the basis of the cover ratio as
at 31 December 2012, a further reduction of up to 7% will be made in
2014. The actual reduction in 2014 will depend on the trend in the
cover ratio in 2013. As the expected reductions are taken into account
in the indexation assumption, the effects of this have been stated in
Group equity through actuarial and gains and losses.
Agreements have been entered into with the pension fund in respect of
the contribution payable. The contribution percentage varies within an
agreed range, depending on the pension fund's cover ratio.
The current agreements cover the period up to 31 December 2014.
Other liabilities
The other liabilities in respect of pensions relate to defi ned contribution
schemes and a number of specifi c old-age provisions. The principal
defi ned contribution scheme is a 401K (savings) scheme in the United
States.
48.4 Principles for defined benefit schemes
The main actuarial assumptions as at the reporting date (in weighted
averages) are as follows:
2011 2012
Discount rate as at 31 December 4.3% 3.4%
Expected return on plan assets
as at 31 December 4.9% 3.4%
Future wage increases 2.5% 2.5%
Future pension increases
of inactive participants 0.8% 0.6%
Assumptions with regard to future mortality fi gures are based on
published statistical data and mortality probabilities. The mortality
tables used are the 2012-2062 forecast table of the Netherlands
Actuarial Association with a correction factor dependent on age and
gender. For the valuation of partner's pensions the age difference
between men and women has been set at three years. The total
expected long-term return on the investment is 3.4% (2011: 4.9%).
A 0.1% change in the discount rate would result in a change
of approximately € 0.3 million in the annual expenses (2011: 0).
A 0.1% change in the discount rate would cause the liability to rise or
fall by approximately € 6.0 million (2011: € 5.0 million).
Analysis of plan assets as at 31 December 2011 2012
Bonds 173.3 176.9
Equities 101.3 119.2
Commodities 13.9 13.0
Real estate 25.2 24.1
Cash 1.9 0.8
Other assets 5.4 6.6
Plan assets 321.0 340.6
48.3 Charges / income stated in the profit
and loss account 2011 2012
Service costs – 2.8 – 4.3
Interest on liabilities – 15.5 – 14.2
Expected return on plan assets 17.6 15.5
Income from change to pension scheme – 3.3
Pension (expenses) / income – 0.7 0.3
The actual return on fund investments amounts to € 26.4 million (2011:
€ 11.6 million).
Netherlands
The defi ned benefi t pension scheme concerns in particular the pension
rights of the Dutch employees which have been placed with Stichting
Pensioenfonds Koninklijke Ten Cate. In 2012 a change in the pension
scheme was agreed whereby the accrual percentage was reduced from
2.1% to 1.79%. As a result of the reduction in the accrual percentage,
income of € 3.3 million has been recognised as a credit to the result for
2012.
The main features of the scheme are:
■ pension accrual based on average salary;
■ accrual rate of 1.79 (2011: 2.1%).
■ conditional indexation, the target level being equivalent to 90% of
wage growth for active members (employees) and 90% of price
growth for inactive members (pensioners and members with paid-
up entitlements);
■ the employer contribution is increased by 50% if the cover ratio
falls below 110%.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 125
The provision for reorganisations relates to a number of reorganisations
which were nearly all completed during the fi nancial year.
The provision for other personnel liabilities has been formed in respect
of long-term leave and other benefi ts, such as anniversaries.
The environmental provision has been formed for expected costs of
decontamination of industrial sites, on the basis of functional
decontamination (maintenance of business use).
Historical information 2008 2009 2010 2011 2012
Present value of obligations 275.1 295.7 295.8 332.5 370.2
Fair value of plan assets 272.4 298.5 316.7 321.0 340.6
Present value of net liabilities 2.7 – 2.8 – 20.9 11.5 29.6
Experience adjustments arising on obligations of the scheme 0.8 4.4 9.4 5.3 – 8.9
Experience adjustments arising on plan assets – 42.3 11.8 8.1 – 6.0 10.9
The Group expects to contribute € 6.3 million of employer's
contributions to defi ned benefi t pension schemes in 2013 (2012:
€ 6.5 million). The pension expense in respect of 2013 is estimated at
€ 5.3 million (2012: € 3.1 million).
49 PROVISIONSGuarantee/
claims
Reorgani-
sation
provision
Other
personnel
liabilities
Environ-
mental Others Total
Balance as at 1 January 2012 10.9 0.4 5.8 2.0 0.9 20.0
Provisions made during the year 3.1 2.6 0.5 – 0.2 6.4
Released to result – 5.8 – – 0.1 – – – 5.9
Expenditure in current year – 2.9 – 2.5 – 0.6 – – 0.3 – 6.3
Balance as at 31 December 2012 5.3 0.5 5.6 2.0 0.8 14.2
Of which short-term
as at 31-12-2011 4.0 0.4 0.3 – 0.3 5.0
as at 31-12-2012 1.6 0.4 0.3 – 0.5 2.8
The amount released to the result has been included in the profi t and
loss account as follows:
2011 2012
Cost of sales 0.1 2.6
General management costs 0.7 3.3
Total 0.8 5.9
The guarantee provision relates to goods and services supplied and the
provision for claims relates to claims for damages and possible legal
costs. The release of € 5.8 million relates to the settlement of legal
proceedings and a lower-than-expected fi gure for guarantee claims.
126 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Other information
50 FINANCIAL INSTRUMENTS
As part of its normal business operations, the Group incurs liquidity,
credit, interest and currency risks.
The risk of fl uctuations, mainly in exchange rates and interest rates, is
hedged using derivatives.
50.1 Liquidity risk
The liquidity risk is the risk of the Group being unable to meet its
liabilities when they fall due. The Group's policy on control of the
liquidity risk is to guarantee to the best of its ability that suffi cient
liquidities are available to meet its liabilities on time, in both normal
and exceptional situations. € 233.6 million of the syndicated loan of
€ 450.0 million (2011: € 450.0 million) was undrawn as at 31 December
2012 (2011: € 180.4 million).
The term of the fi nancial liabilities as at 31 December 2011 was as
follows:
Carrying value
Expected
cash fl ow
(including
interest)
2012
< 1 year
2013
1-2 years
2014/16
2-5 years
2017 and
later
> 5 years
Financial liabilities (excluding derivatives)
Total long-term debts 276.0 – 299.6 – 5.7 – 8.1 – 282.7 – 3.1
Cash loans, overdrafts 35.4 – 35.4 – 35.4 – – –
Trade creditors and other payables 161.8 – 161.8 – 161.8 – – –
Derivatives
Interest rate swaps 6.9 – 7.1 – 3.4 – 2.3 – 1.3 – 0.1
Forward, FX swap contracts 0.4 – 0.4 – 0.4 – – –
Total 480.5 – 504.3 – 206.7 – 10.4 – 284.0 – 3.2
The term of the fi nancial liabilities as at 31 December 2012 was as
follows:
Carrying value
Expected
cash fl ow
(including
interest)
2013
< 1 year
2014
1-2 years
2015/17
2-5 years
2018 and
later
> 5 years
Financial liabilities (excluding derivatives)
Total long-term debts 221.2 – 233.2 – 4.1 – 4.5 – 221.6 – 3.0
Cash loans, overdrafts 35.4 – 35.4 – 35.4 – – –
Trade creditors and other payables 135.6 – 135.6 – 135.6 – – –
Derivatives
Interest rate swaps 5.8 – 5.8 – 3.2 – 1.9 – 0.7 –
Forward, FX swap contracts 1.0 – 1.0 – 1.0 – – –
Total 399.0 – 411.0 – 179.3 – 6.4 – 222.3 – 3.0
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 127
50.2 Credit risk
Credit risk is the risk of a fi nancial loss for the Group if a customer or
counterparty to a fi nancial instrument fails to meet its contractual
obligations. Credit risks result in particular from trade debtors and, to a
more limited extent, investments in securities.
The Group's exposure to credit risk is mainly determined by the specifi c
characteristics of the individual customers.
Credit risk is limited by internal research into the creditworthiness of
new and existing customers based on sources such as external reports,
annual reports and payment history or by insuring the credit risk. The
internal credit limits specifi ed on the basis of internal research are
reviewed at least once a year.
Customers for which no credit limit has been issued (internally or by
the insurer) can only do business with the Group on the basis of
guaranteed payment.
Goods are subject to reservation of ownership. In the event of non-
payment, the Group in most cases has a preferential claim to the extent
that the goods are still present. The Group does not demand collateral
for trade and other receivables.
Impairments are stated in the profi t and loss account as cost of sales.
The Group has no particular concentration risks in respect of trade
debtors.
The carrying value of the fi nancial assets refl ects the maximum
exposure to credit risk. The maximum exposure can be defi ned as
follows:
2011 2012
Trade debtors 152.4 140.0
Other (long-term) receivables 28.8 26.4
Cash and cash equivalents 22.7 26.7
Forward foreign exchange contracts
and options 0.8 0.3
Interest rate swaps 0.2 –
Total 204.9 193.4
The age of the trade debtors and the related impairments can be
analysed as follows:
2011 2012
Gross Provisions Gross Provisions
Not due – 60 days
overdue 148.6 1.5 130.5 0.4
60 – 120 days overdue 3.8 0.7 6.3 0.1
120 – 360 days overdue 3.3 1.2 4.5 1.5
Over 360 days overdue 3.7 3.6 5.1 4.4
Balance as at
31 December 159.4 7.0 146.4 6.4
The movements in the provision for trade debtors are as follows:
2011 2012
Balance as at 1 January 5.6 7.0
Acquired through acquisition 1.2 –
Formed as charge against result 1.2 1.4
Released to result – 0.6 – 0.9
Written off during the year – 0.4 – 1.1
Balance as at 31 December 7.0 6.4
The Group believes that, with the exception of the foregoing, no
provision for impairment is required in respect of trade receivables
which are not yet due or which are up to 60 days overdue.
50.3 Interest rate risk
100% of the interest-bearing debts have a variable interest rate (2011:
99%). The risk of a rise in interest rates is in principle hedged 90% for
the subsequent year and 75%, 50% and 25% respectively for the years
thereafter. Both interest rate swaps and caps can be used for this
purpose. The impact of changes in the value of these fi nancial
instruments on the Group's result is limited as far as possible by the
use of hedge accounting. The conditions applying to the interest-
bearing debt are set out in note 47.
128 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Other information
50.4 Currency risk
The Group incurs currency risks on sales and purchases denominated in
currencies other than the functional currency of the respective
subsidiary. The currencies in which risk is incurred are mainly the euro,
the US dollar and the British pound.
Transaction risk
The Group hedges orders, trade receivables and payables denominated
in foreign currencies, to the extent that these may have a material
effect on the result. It uses foreign exchange forward contracts and
currency options for this purpose. The forward contracts have a term of
less than one year after the reporting date. If necessary they are
extended. The forward contracts are carried at fair value.
The principal amounts of the loans drawn in foreign currencies are
used to hedge intercompany loans in foreign currencies to subsidiaries
which report in the respective currency.
Competition risk
The Group hedges the estimated currency risk of the expected
purchases and sales in the subsequent six months as far as possible.
Currency options are used for this purpose.
Translation risk
The translation risk on the result of subsidiaries outside the eurozone
is offset internally as far as possible against euro-denominated
revenues of subsidiaries outside the eurozone, as well as purchases in
USD from subsidiaries in the eurozone.
At the end of 2012 the net balances of outstanding interest rate
instruments were as follows:
■ interest rate swap to 31-12-2013: € 50 million, received variable,
payment 2.48% fi xed
■ interest rate swap to 31-12-2013: $ 50 million, received variable,
payment 2.03% fi xed
■ interest rate swap to 02-01-2018: $ 4 million, received variable,
payment 4.47% fi xed
■ interest rate swap to 31-12-2014: € 30 million, received variable,
payment 2.805% fi xed
(commencing 31-12-2013)
■ interest rate swap to 31-12-2014: $ 45 million, received variable,
payment 2.598% fi xed
■ interest rate swap to 31-12-2015: $ 60 million, received variable,
payment 1.195% fi xed
The Group values the interest rate swaps and interest rate caps at fair
value (see section 50.7). Of the fair value of the interest rate swaps as
at 31 December 2012, € 5.8 million has been included in trade creditors
and other payables (2011: € 0.2 million in other receivables and
€ 6.9 million in trade creditors and other payables).
The table below shows the periods in which the cash fl ows relating
to interest rate swaps that are the subject of cash fl ow hedge
accounting are expected to take place and in which they will affect the
profi t or loss.
2011Carrying
value
Expected
cash fl ow < 1 year 1-2 years 2-5 years
Interest rate
swaps
Assets – – – – –
Liabilities 5.9 – 5.9 – 2.9 – 2.1 – 0.9
2012Carrying
value
Expected
cash fl ow < 1 year 1-2 years 2-5 years
Interest rate
swaps
Assets – – – – –
Liabilities 5.2 – 5.2 – 3.1 – 1.8 – 0.3
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 129
50.5 Assets and liabilities stated in the balance sheet
Changes in the fair value of foreign exchange forward contracts and
options which are used to hedge, in an economic sense, monetary
assets and liabilities denominated in foreign currencies are stated in
the profi t and loss account. Both changes in the fair value of forward
contracts and options and the exchange rate differences relating
to monetary balance sheet items are included as exchange rate
differences in net fi nancial expenses.
Exposure
The exposure to currency risks in respect of trading transactions of
Group entities on the reporting date is as follows:
2011 2012
USD GBP EUR USD GBP EUR
Transaction risk 4.0 1.4 7.9 1.9 1.8 2.7
Competition risk – 0.6 1.3 15.0 3.4 2.2 20.6
Risk before hedging 3.4 2.7 22.9 5.3 4.0 23.3
Forward contracts – 4.2 – 1.5 – 7.7 3.3 – 1.1 – 2.2
Option contracts – 1.5 – 1.1 – 0.5 3.8 – 2.1 – 19.7
Risk after hedging – 2.3 0.1 14.7 12.4 0.8 1.4
The foreign currencies have been converted into euros at the closing
rate.
The USD risk relates mainly to the expected revenues in USD of Asian
subsidiaries and expected purchases and revenues in USD of European
subsidiaries. Due to fi nancial market restrictions, the risk relating to
Asian subsidiaries is not hedged.
The GBP risk relates mainly to trade receivables and expected revenues
of European subsidiaries.
The EUR risk relates mainly to trade receivables and expected revenues
in euros of Ten Cate Thiolon Middle East.
The Group carries options and foreign exchange forward contracts at
fair value. The fair value of options is determined on the basis of
statements supplied by banks or on the basis of the Black & Scholes
option valuation model. The fair value of foreign exchange forward
contracts with an underlying value below € 5.0 million is determined on
the basis of statements supplied by the bank; in the case of higher
amounts the Group's own calculation model is used. The fair value of
the options to hedge future transactions as at 31 December 2012
amounted to € 0.1 million (2011: € 0.1 million). This amount has been
included in other receivables. The net fair value of the forward foreign
exchange contracts was – € 0.8 million (2011: € 0.3 million).
€ 0.2 million of this amount has been included in other receivables and
€ 1.0 million in other debts (2011: € 0.7 and € 0.4 million).
130 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Other information
The effect of a general interest rate rise of one percentage point on
the pre-tax result in 2012 is estimated at – € 0.6 million (2011:
– € 1.1 million). The effect of a general interest rate rise of one
percentage point on equity is estimated at € 2.8 million before tax
(2011: € 5.0 million) due to the use of hedge accounting.
A general rise of one per cent in the value of the euro against other
currencies would not have had any downward effect on the result after
profi t tax (2011: € 0.3 million). A general rise of one per cent in the
value of the euro against other currencies would have reduced the
equity by approximately € 3.1 million (2011: € 2.4 million).
Fair value versus carrying value
The fair value and carrying value of fi nancial assets and liabilities
stated in the balance sheet are as follows:
2011 2012
Carrying value Fair value Carrying value Fair value
Assets carried at fair value
Long-term receivables and investments 8.2 8.2 9.6 9.6
Other interest rate derivatives 0.2 0.2 – –
Currency derivatives 0.8 0.8 0.3 0.3
9.2 9.2 9.9 9.9
Assets carried at amortised cost
Trade debtors and other receivables 173.0 173.0 156.8 156.8
Cash and cash equivalents 22.7 22.7 26.7 26.7
195.7 195.7 183.5 183.5
Liabilities carried at fair value
Interest rate swaps used for hedging – 5.9 – 5.9 – 5.2 – 5.2
Other interest rate derivatives – 1.0 – 1.0 – 0.6 – 0.6
Currency derivatives – 0.4 – 0.4 – 1.0 – 1.0
– 7.3 – 7.3 – 6.8 – 6.8
Liabilities carried at amortised cost
Syndicated loan – 267.4 – 267.4 – 215.0 – 215.0
Financial lease liabilities – 3.2 – 3.2 – 2.2 – 2.2
Other loans – 5.4 – 5.4 – 4.0 – 4.0
Trade creditors and other payables – 161.8 – 161.8 – 135.6 – 135.6
Cash loans and overdrafts – 35.4 – 35.4 – 35.4 – 35.4
– 473.2 – 473.2 – 392.2 – 392.2
The fair value of the syndicated loan is the same as the carrying value,
because it has a variable interest rate and a margin consistent with
market conditions.
50.6 Sensitivity analyses
In managing interest rate and currency risks, the Group's aim is to limit
the effect of short-term fl uctuations on the Group result. In the longer
term, however, sustained changes in exchange rates and interest rates
will have an effect on the consolidated result.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 131
In 2012 the Group included expenses of € 8.8 million in the profi t and
loss account in respect of operating leases (2011: € 8.5 million).
52 INVESTMENT LIABILITIES
In 2012 the Group entered into contractual liabilities for the purchase
of tangible fi xed assets. The amount of the liabilities as at
31 December 2012, after deduction of advance payments already made
during the fi nancial year, is € 0.6 million (2011: € 3.1 million).
53 CONTINGENT LIABILITIES
The Group has received claims for damages arising from the conduct of
business. With the exception of those stated below, the claims are not
deemed to be substantial and provisions have been recognised to the
extent necessary.
A claim for damages has been made against Royal Ten Cate by United
Fabrics NV, a company registered in the Netherlands Antilles (majority
shareholder in Textielgroep Twenthe NV). The claim is based on an
outsourcing and management agreement from 1998 and originally
amounted to € 56 million. The claim in respect of the outsourcing
agreement has lapsed permanently as a result of a judgement by the
Supreme Court in 2006. The plaintiff was ordered to demonstrate the
damage suffered in respect of the management agreement. TenCate is
confi dent with regard to the remainder of the proceedings.
In the spring of 2011, FieldTurf Tarkett (‘FieldTurf’) instituted legal
proceedings against TenCate. These concerned alleged defi ciencies in
products mostly supplied to FieldTurf by Mattex Leisure Industries in
Dubai, several years before TenCate acquired part of the assets and
businesses of Mattex at the beginning of 2007. TenCate denies the
existence of any legal basis for this claim and therefore rejects it.
TenCate is confi dent with regard to the outcome of the legal
proceedings and expects no material fi nancial damage. In August 2011,
TenCate fi led a counterclaim against FieldTurf relating among other
things to damage to the good name of TenCate and TenCate products,
and to breach of contract in the period prior to TenCate's termination of
the supply contract.
50.7 Estimate of fair value
Details are given below of the main methods and assumptions used in
estimating the fair value of fi nancial instruments.
The fair value of foreign exchange forward contracts is calculated by
discounting the difference between the contractual and the current
forward price, multiplied by the principal amount of the contract, for
the residual term at the market interest rate.
The fair value of interest rate swaps is calculated by discounting the
difference between the contractual and the current interest, multiplied
by the principal amount of the interest rate swap, for the residual term
at the market interest rate. The result is periodically checked against
bank statements.
The fair value of long-term debts is calculated on the basis of the
discounted value of expected future cash fl ows from repayments and
interest payments.
The fair value of fi nancial lease liabilities is estimated on the basis of
the present value of future cash fl ows, discounted at the interest rate
for similar lease agreements.
In the case of trade debtors, other receivables, trade creditors and
other short-term debts due within one year, the nominal value is
deemed to refl ect the fair value. The fi nancial instruments valued on
the basis of fair value fall into category 2 as in 2011: no quoted market
price in an active market, with the fair value being determined
indirectly.
51 LIABILITIES NOT SHOWN IN THE BALANCE SHEET
Operating lease as lessee
The expected cash fl ows under non-cancellable operating leases are as
follows:
2011 2012
Less than one year 7.8 7.4
Between one and fi ve years 20.2 17.7
More than fi ve years 18.9 25.4
Net result 46.9 50.5
The Group leases buildings, plant, vehicles and offi ce equipment under
operating leases. The leased buildings have a term of ten to fi fteen
years. Lease payments are indexed annually. None of the leases
include conditional lease payments. In principle the Group does not act
as a lessor. The term of the other leases is a maximum of fi ve years.
132 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Other information
The fi xed remuneration paid to Mr De Vries was increased by 10% with
effect from 1 April 2011. Mr De Vries has a fi nal-salary pension plan.
The pension costs for Mr De Vries in 2011 included the sum of
€ 482,000 in respect of a back-service liability (2012 and 2010: 0).
Mr De Vries' results-related pay amounts to a maximum of 50% of the
fi xed salary. In 2012 Mr De Vries received a variable salary component
in respect of 2011 amounting to 50% of the fi xed salary. The variable
component paid to Mr Cornelese is a maximum of 40% of the fi xed
salary. In 2012 Mr Cornelese received a variable salary component in
respect of 2011 of 34% of the fi xed salary.
As at 31 December 2012 Mr De Vries held 203,160 shares in the
Company (31 December 2011: 203,160 shares) and 420,000 options
(31 December 2011: 360,000 options). In 2012 Mr De Vries was granted
60,000 options (2011: 60,000) with an exercise price of € 24.67. In 2011
Mr De Vries received 10,000 shares at a price of € 26.00 in the
Company. Mr Cornelese held 751 shares in the Company as at
31 December 2012 (31 December 2011: 718 shares) and 30,000 options
(31 December 2011: no options). In 2012 Mr Cornelese was granted
54 POST BALANCE SHEET EVENTS
On 15 January 2013 TenCate acquired 100% of the shares of Amber
Composites Ltd, a British producer of thermoset composites for industry
and the automotive market. The acquisition of Amber Composites will
allow an acceleration of activities in the European market in the fi eld of
thermoset composites.
55 RELATED PARTIES
55.1 Identity of related parties
The Group's related parties are its subsidiaries, associated companies
and other participating interests, joint ventures, the TenCate pension
fund and the members of the Executive and Supervisory Boards.
55.2 Directors' remuneration
The remuneration of the members of the Executive Board was as
follows:
L. de Vries B. Cornelese1 J. Lock2
in thousands of euros 2010 2011 2012 2011 2012 2010 2011
Periodic remuneration 613 659 675 270 360 300 120
Results-related pay for the previous year 230 307 337 – 92 68 117
Pension costs 189 698 221 63 105 85 44
Early Retirement (Pre-pension and Life Course
Savings) Act 58 140 – – – – –
Jubilee payment 51 – – – – – –
Shares _ 260 – – – – –
Option costs 338 375 455 – 80 169 77
1,479 2,439 1,688 333 637 622 358
1 From 1 April 2011.
2 2011: To 21 April 2011.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 133
30,000 options with an exercise price of € 24.67. In 2012 Mr Lock was
granted 10,000 options with an exercise price of € 24.67.
On 2012 salaries above € 150,000, a once-only crisis levy (employer's
charge) of 16% is payable to the Dutch Government. The crisis levy for
the executive directors amounts to € 185,000, comprising € 139,000 for
the CEO and € 46,000 for the CFO. Damages of € 1.2 million have also
been made available to the CEO to resolve a legal dispute caused
by the company in 1995. The total amount in 2012 for the CEO is
€ 3.1 million and for the CFO € 0.7 million.
Mr De Vries and Mr Cornelese are participating in the Group's share
option plan. The costs of the options are charged to the result in three
years. Further information can be found in note 66.
The remuneration of the members of the Supervisory Board was as
follows:
2011 2012
in euro
J.C.M. Hovers – Chairman 1, 2 50,000 50,000
P.P.A.I. Deiters – Vice Chairman 2 * 35,000 35,000
F.A. van Vught 3 35,000 8,750
E. ten Cate 1 * 35,000 35,000
R. van Gelder 1 32,500 32,500
187,500 161,250
1 Member of the Financial Committee.
2 Member of the combined Remuneration, Selection and Appointments Committee.
3 2012: untill 19 April 2012.
* Chairman.
Mr Deiters received additional remuneration amounting to US$ 15,000
in 2011 and 2012 in respect of his supervisory directorship in Ten Cate
Thiolon Middle East in Dubai. The members of the Supervisory Board
held no shares or option rights of Royal Ten Cate at the end of 2012.
55.3 Transactions with associated companies, other participating
interests and joint ventures
During the 2012 fi nancial year, associated companies, other (non-
consolidated) participating interests and joint ventures purchased
goods from the Group amounting to € 17.5 million (2011: € 14.8
million). As at 31 December 2012 the outstanding trade receivables
due to the Group from associated companies amounted to € 3.4 million
(2011: € 1.5 million) and from joint ventures € 1.2 million (2011: € 2.2
million). The Group has no outstanding trade liabilities to associated
companies and joint ventures (2011: € 0.1 million).
Transactions with associated companies, other participating interests
and joint ventures take place on an objective, business basis.
55.4 Subsidiaries
A list of (signifi cant) subsidiaries and participating interests can be
found inside the back cover of this report.
56 ESTIMATES AND JUDGMENTS MADE BY THE MANAGEMENT
The Executive Board has conducted discussions with the Financial
Committee of the Supervisory Board on the critical principles for the
fi nancial reporting and estimates, as well as the application of such
principles and estimates. Information on assumptions and uncertainties
regarding estimates which entail a substantial risk of a material
adjustment in the subsequent fi nancial year is included in the following
notes:
■ With regard to the pensions, the main actuarial assumptions are
stated in note 48.
■ With regard to guarantees and claims, provisions have been
formed whenever there is an actual liability or it is likely that an
outfl ow of funds will be necessary. The result of this is stated in
note 49.
■ With regard to impairments in the case of loss-making companies,
an examination has been carried out to determine whether the
realisable value of any cash generating unit was lower than the
carrying value. This was not the case in 2012 and 2011. Future
detrimental changes in the estimate as a result of changed
assumptions may lead to the realisable value being lower than
the carrying value. See note 37.2.
■ Estimates with regard to the use of tax losses are included in
note 40.
134 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Company fi nancial statements
57 COMPANY PROFIT AND LOSS ACCOUNT
in millions of euros note 2011 2012
Result from participating interests after profi t tax 59 57.4 17.8
Other results after profi t tax 1.3 4.5
NET INCOME 58.7 22.3
58 COMPANY BALANCE SHEET (BEFORE APPROPRIATION OF THE RESULT)
For the financial year ending on 31 December, in millions of euros note
31 December
2011
31 December
2012
FINANCIAL FIXED ASSETS 59
Participating interests in subsidiaries 680.0 692.3
Loans to subsidiaries 104.6 114.7
Deferred profi t tax assets 14.4 25.7
Total non-current assets 799.0 832.7
CURRENT ASSETS
Due from subsidiaries 1.1 0.7
Other receivables 1.9 0.8
Cash and cash equivalents 1.2 1.0
Total current assets 4.2 2.5
TOTAL ASSETS 803.2 835.2
EQUITY
Share capital 61 64.8 66.2
Share premium reserve 63 44.8 43.4
Legal reserve 64 5.8 1.9
Other reserves 65 291.7 323.4
Undistributed result 58.7 22.3
465.8 457.2
PROVISIONS 67 1.1 1.1
NON-CURRENT LIABILITIES 68 273.1 219.4
CURRENT LIABILITIES 69 63.2 157.5
TOTAL EQUITY AND LIABILITIES 803.2 835.2
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 135
Notes to the company fi nancial statements
General
Accounting policies
The parent company fi nancial statements of Royal Ten Cate form an
inseparable whole with the 2012 fi nancial statements of Royal
Ten Cate and have been prepared in accordance with the statutory
requirements of Part 9 of Book 2 of the Netherlands Civil Code. In
determining the accounting policies for its parent company fi nancial
statements, Royal Ten Cate uses the option available under article
2.362 paragraph 8 of the Netherlands Civil Code. This means that the
accounting principles for the parent company fi nancial statements of
Royal Ten Cate are the same as those applying to the consolidated
fi nancial statements. Participating interests over which signifi cant
infl uence is exercised are valued in accordance with the equity method.
The consolidated fi nancial statements have been prepared in
accordance with the standards set by the International Accounting
Standards Board and adopted by the European Union. A description of
these standards can be found in the accounting policies applicable to
the consolidated fi nancial statements.
The share in the results of associated companies includes the share of
Royal Ten Cate in the results of these companies. Results from
transactions involving a transfer of assets and liabilities between
Royal Ten Cate and its participating interests and between individual
participating interests are not included to the extent that they can be
considered to be unrealised.
59 FINANCIAL FIXED ASSETSInterest in
subsidiaries
Loans to
subsidiaries
Deferred
profi t tax
assets Total
Balance as at 1 January 680.0 104.6 14.4 799.0
Investments / capital contributions 24.1 – – 24.1
Actuarial gains and losses of pensions – 24.8 – – – 24.8
Translation differences – 3.9 0.6 – – 3.3
Loans granted – 20.7 – 20.7
Repayment of loans – – 11.2 – – 11.2
Results of participating interests 17.8 – – 17.8
Dividend of participating interests – 0.9 – – – 0.9
Change in deferred tax – – 11.3 11.3
Balance as at 31 December 692.3 114.7 25.7 832.7
Royal Ten Cate is at the head of the Group and has capital interests in
the subsidiaries stated on the cover.
60 EQUITY
The equity in the parent company fi nancial statements corresponds to
the equity in the consolidated fi nancial statements. A statement of
changes in equity can be found on page 98.
61 CALLED AND PAID-UP CAPITAL 2011 2012
Authorised share capital 200.0 200.0
Of which not issued 135.2 133.8
64.8 66.2
136 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the company fi nancial statements
62 ORDINARY SHARES 2011 2012
The authorised share capital consists of:
80,000,000 ordinary shares of € 2.50 200.0 200.0
Issued share capital
Balance as at 1 january 2011 2012
Ordinary shares 25,501,907 and 25,928,914 63.8 64.8
Issued stock dividend 427,007 and 568,752 1.0 1.4
Balance as at 31 December 64.8 66.2
63 SHARE PREMIUM RESERVE 2011 2012
Balance as at 1 January 45.8 44.8
Issued stock dividend – 1.0 – 1.4
Balance as at 31 December 44.8 43.4
The share premium reserve is available for distribution to shareholders.
64 LEGAL RESERVES
64.1 Translation differences 2011 2012
Balance as at 1 January 3.3 7.0
Change 3.7 – 3.9
Balance as at 31 December 7.0 3.1
64,2 Hedging reserve 2011 2012
Balance as at 1 January – 3.6 – 4.5
Change – 0.9 0.6
Balance as at 31 December – 4.5 – 3.9
64.3 Other legal reserves 2011 2012
Balance as at 1 January 2.8 3.3
Change 0.5 – 0.6
Balance as at 31 December 3.3 2.7
The other legal reserves concern capitalised development costs,
undistributable reserves of subsidiaries and the hedging reserve.
Balance of legal reserves
as at 31 December 5.8 1.9
65 OTHER RESERVES 2011 2012
Balance as at 1 January 280.4 291.7
Actuarial gains and losses of pensions – 14.1 – 17.9
Transferred to Other legal reserves – 0.5 0.6
Added from 2011 / 2010 result 39.7 46.5
Share and option plans 1.9 2.0
Repurchase of own shares – 7.6 –
Issue of repurchased shares for share savings
plan / option plan 2.4 0.5
Acquisition of non-controlling interest – 10.5 –
Balance as at 31 December 291.7 323.4
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 137
66 OPTION PLAN
Royal Ten Cate operates a stock option plan for the management,
established by the Supervisory Board. The maximum possible account
has been taken of the recommendations of VNO-NCW and the Dutch
Investors' Association (VEB). Those eligible for options are members of
the Executive Board, the corporate and group directors and a number of
managers. The implementation of the share option plan is supervised
by the compliance offi cer.
The options are granted on a conditional basis. During the vesting
period, a performance condition must be fulfi lled. This condition is that
the earnings per share, adjusted to take account of non-recurring
items, over the past three, four or fi ve years must have increased on
average by at least a percentage equal to infl ation plus 3% per year. If
this performance condition has been fulfi lled, the options become
unconditional and may be exercised, unless restrictions have been
imposed by the Netherlands Authority for the Financial Markets.
The total term of the options is six to ten years. The exercise period is
three to fi ve years. The vesting period is three to a maximum of fi ve
years.
The option exercise price is equivalent to the average price of the
Royal Ten Cate share on Euronext Amsterdam nv on the fi ve stock
exchange trading days following publication of the annual fi gures. Each
granted option right lapses on early termination of employment.
In principle options amounting to approximately 1.5% of the total
number of shares outstanding will be granted in any one year.
The exercise of options is subject to the restrictions laid down in
the Securities Transactions Supervision Act.
66.1 Granting of options in 2013
On 28 February 2013 it was intended to grant 330,000 conditional
options at the average market price during the fi ve stock exchange
trading days following publication of the annual results on 1 March
2013. The distribution is as follows:
01-03-2013* 28-02-2012
Members of the Executive Board 100,000 100,000
Management and management support staff 230,000 209,500
330,000 309,500
* Provisional.
** Final.
**
138 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the company fi nancial statements
66.2 Statement of movements in options of the Executive Board
in 2012
L. de Vries
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2011
Exercised
in 2012
Lapsed
in 2012
Outstanding
31-12-2012
Exercisable
31-12-2012
25-02-2004 25-02-2012 40,000 10.29 40,000 – – – –
22-02-2005 22-02-2013 50,000 15.17 50,000 – – –
01-03-2006 01-03-2014 60,000 23.63 – – – 60,000 60,000
28-02-2007 28-02-2015 60,000 25.77 – – – 60,000 60,000
05-03-2008 05-03-2016 60,000 22.50 – – – 60,000 60,000
03-03-2009 03-03-2017 60,000 11.70 – – – 60,000 60,000
03-03-2010 03-03-2020 60,000 18.96 – – – 60,000 –
01-03-2011 01-03-2021 60,000 27.38 – – – 60,000 –
28-02-2012 28-02-2022 60,000 24.67 – – – 60,000 –
510,000 90,000 – – 420,000 240,000
01-03-2013 01-03-2023 60,000
B. Cornelese
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2011
Exercised
in 2012
Lapsed
in 2012
Outstanding
31-12-2012
Exercisable
31-12-2012
28-02-2012 28-02-2022 30,000 24.67 – – – 30,000 –
30,000 – – – 30,000 –
01-03-2013 01-03-2023 40,000
No options were exercised by the Executive Board in 2012 (2011:
50,000). The share price on the exercise date in 2011 was € 28.60.
In March 2013 it was intended to grant 60,000 options to Mr De Vries
and 40,000 options to Mr Cornelese. 40,000 options in the 2009 series
are reserved for outstanding performance, a decision on which will be
taken in due course. These options are not included in the above
statements.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 139
66.3 Statement of movements in options of management
and management support staff in 2012
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2011
Exercised
in 2012
Lapsed
in 2012
Outstanding
31-12-2012
Exercisable
31-12-2012
25-02-2004 25-02-2012 55,600 10.29 51,598 4,000 2 – –
22-02-2005 22-02-2013 102,400 15.17 59,000 13,000 – 30,400 30,400
01-03-2006 01-03-2014 141,200 23.63 50,400 2,000 – 88,800 88,800
28-02-2007 28-02-2015 145,000 25.77 51,500 – 1,000 92,500 92,500
05-03-2008 05-03-2016 207,000 22.50 76,500 2,000 500 128,000 128,000
03-03-2009 03-03-2017 176,250 11.70 14,750 17,750 2,000 141,750 141,750
03-03-2010 03-03-2020 226,500 18.96 11,500 – 5,000 210,000 –
01-03-2011 01-03-2021 246,000 27.38 10,000 – 6,500 229,500 –
28-02-2012 28-02-2022 219,500 24.67 – – 1,000 218,500 –
1,519,450 325,248 38,750 16,002 1,139,450 481,450
01-03-2013 01-03-2023 230,000
66.4 Complete statement of movements in options in 2012
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2011
Exercised
in 2012
Lapsed
in 2012
Outstanding
31-12-2012
Exercisable
31-12-2012
25-02-2004 25-02-2012 95,600 10.29 91,598 4,000 2 – –
22-02-2005 22-02-2013 152,400 15.17 109,000 13,000 – 30,400 30,400
01-03-2006 01-03-2014 201,200 23.63 50,400 2,000 – 148,800 148,800
28-02-2007 28-02-2015 205,000 25.77 51,500 – 1,000 152,500 152,500
05-03-2008 05-03-2016 267,000 22.50 76,500 2,000 500 188,000 188,000
03-03-2009 03-03-2017 276,250 11.70 14,750 17,750 2,000 241,750 241,750
03-03-2010 03-03-2020 286,500 18.96 11,500 – 5,000 270,000 –
01-03-2011 01-03-2021 306,000 27.38 10,000 – 6,500 289,500 –
28-02-2012 28-02-2022 309,500 24.67 – – 1,000 308,500 –
2,099,450 415,248 38,750 16,002 1,629,450 761,450
01-03-2013 01-03-2023 330,000
140 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
>Notes to the company fi nancial statements
67 PROVISIONS 2011 2012
Guarantee and claims 1.0 1.1
Other items 0.1 –
Balance as at 31 December 1.1 1.1
The term of the provisions exceeds one year.
68 LONG-TERM LIABILITIES 2011 2012
Syndicated loan 267.4 215.0
Other items 5.7 4.4
Balance as at 31 December 273.1 219.4
The conditions of the syndicated loan can be found in note 48 in the
notes to the consolidated balance sheet.
69 SHORT-TERM LIABILITIES 2011 2012
Cash loans, overdrafts 53.6 145.6
Owed to consolidated subsidiaries 2.4 4.9
Trade creditors and other payables 7.2 7.0
Balance as at 31 December 63.2 157.5
The short-term liabilities are due in less than one year.
38,750 options were exercised in 2012 (2011: 109,500). The weighted
average share price on the exercise date for share options exercised
in 2012 was € 21.02 (2011: € 28.99).
The fair value of the share-based payments on the grant date has been
determined on the basis of the following input:
2011 2012
Price on grant date (15-day average) € 27.12 € 24.96
Exercise price € 27.38 € 24.67
Expected volatility 39.3% 39.7%
Option term 8 years 8 years
Expected dividend yield 3.00% 2.35%
Risk-free interest rate 2.93% 1.80%
66.5 Share savings plan
All employees in the Netherlands had the possibility of participating
in the share savings plan up to the end of 2011.
66.6 Repurchased shares
In principle the Company will repurchase shares in order to prevent any
dilution of earnings per share caused by the granting of options.
2011 2012
number of shares
Balance as at 1 January 433,256 620,321
Repurchase of own shares 308,820 –
Own shares for conversion
of physical securities – 2,716
Exercise of options – 109,500 – 38,750
Issued in connection with share savings plan – 1,855 –
Directors’ remuneration – 10,000 –
Exchange of physical securities – 400 –
Outstanding and fully paid
as at 31 December 620,321 584,287
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 141
70 AUDITOR'S FEES
The following fees of KPMG Accountants N.V. and the other entities
affi liated to the KPMG network have been charged to the Group, in
accordance with article 382a Part 9 of Book 2 of the Netherlands Civil
Code.
Fees 2011 2012
in thousands of euros
Examination of the fi nancial statements 830 820
Other audit assignments 270 210
Other non-audit services 200 190
Total 1,300 1,220
71 LIABILITIES NOT SHOWN IN THE BALANCE SHEET
The Company has issued a declaration of liability in accordance with
article 403 of Book 2 of the Netherlands Civil Code on behalf of its
Dutch subsidiaries.
The Company forms a tax group together with the majority of the Dutch
subsidiaries for corporation and sales tax. Each of these subsidiaries is
severally liable for the tax payable by all the companies included in the
tax group.
We also refer to the notes in the section 53 concerning contingent
liabilities. Guarantees have also been issued for a number of foreign
subsidiaries.
Almelo, 28 February 2013
Executive Board
L. de Vries, Chairman
B.J.H. Cornelese
Supervisory Board
J.C.M. Hovers, Chairman
P.P.A.I. Deiters, Vice-Chairman
E. ten Cate
R. van Gelder
142 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Other information
INDEPENDENT AUDITOR'S REPORT
To the General Meeting of Shareholders of Royal Ten Cate
Report on the financial statements
We have audited the accompanying 2012 fi nancial statements of Royal
Ten Cate, Almelo, as set out on pages 90 to 141 of this report. The
fi nancial statements include the consolidated fi nancial statements and
the company fi nancial statements. The consolidated fi nancial
statements comprise the consolidated balance sheet as at
31 December 2012, the consolidated profi t and loss account, the
consolidated statement of comprehensive income, the consolidated
statement of changes in group equity and the consolidated cash fl ow
statement for the year then ended, and notes, comprising a summary of
the signifi cant accounting policies and other explanatory information.
The company fi nancial statements comprise the company balance
sheet as at 31 December 2012, the company profi t and loss account for
the year then ended and the notes, comprising a summary of the
accounting policies and other explanatory information.
Management's responsibility
Management is responsible for the preparation and fair presentation of
the fi nancial statements in accordance with International Financial
Reporting Standards as adopted by the European Union and with Part 9
of Book 2 of the Netherlands Civil Code, and for the preparation of the
management board report in accordance with Part 9 of Book 2 of the
Netherlands Civil Code. Furthermore, management is responsible for
such internal control as it determines is necessary to enable the
preparation of fi nancial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these fi nancial
statements based on our audit. We conducted our audit in accordance
with Dutch law, including the Dutch Standards on Auditing. This
requires that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the
fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fi nancial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the fi nancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the fi nancial statements in
order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and
appropriate to provide a basis for our audit opinion.
Opinion with respect to the consolidated financial statements
In our opinion, the consolidated fi nancial statements give a true and
fair view of the fi nancial position of Royal Ten Cate as at 31 December
2012 and of its result and its cash fl ows for the year then ended in
accordance with International Financial Reporting Standards as
adopted by the European Union and with Part 9 of Book 2 of the
Netherlands Civil Code.
Opinion with respect to the company financial statements
In our opinion, the company fi nancial statements give a true and fair
view of the fi nancial position of Royal Ten Cate as at 31 December
2012 and of its result for the year then ended in accordance with Part 9
of Book 2 of the Netherlands Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirements under Section 2:393 sub 5 at e and f
of the Netherlands Civil Code, we have no defi ciencies to report as a
result of our examination as to whether the management board report,
to the extent we can assess, has been prepared in accordance with
part 9 of Book 2 of this Code, and whether the information as required
under Section 2:392 sub 1 at b - h has been annexed. Further, we report
that the management board report, to the extent we can assess, is
consistent with the fi nancial statements as required by Section 2:391
sub 4 of the Netherlands Civil Code.
Amstelveen, 28 February 2013
KPMG Accountants N.V.
T. van der Heijden RA
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 143
POST BALANCE SHEET EVENTS
On 15 January 2013 TenCate acquired 100% of the shares of Amber
Composites Ltd, a British producer of thermoset composites for industry
and the automotive market. The acquisition of Amber Composites will
allow an acceleration of activities in the European market in the fi eld of
thermoset composites.
PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO
APPROPRIATION OF PROFIT
(Article 27)
General
The authorised capital is divided into ordinary shares.
Summary of the provisions of the articles of association
1. Profi t distributions may only take place to the extent that the equity
of the Company exceeds the paid and called-up part of the issued
capital plus the reserves which must be held by law.
2. With the approval of the Supervisory Board, the Executive Board is
authorised to determine the part of the profi t that will be reserved.
3. The sum remaining from the profi t after the reservation in
accordance with paragraph 2 is at the disposal of the general
meeting of shareholders.
4. Shares held by the Company in its own capital are not taken into
account in calculating the appropriation of profi t.
5. The dividend payable shall be made payable no later than 30 days
after adoption of the fi nancial statements by the general meeting
of shareholders. It shall be made payable only to the authorised
persons in whose name the shares are held. Such payments shall
discharge the Company.
6. A shareholder's claim for payment shall be time-barred after
a period of fi ve years has elapsed.
PROPOSED APPROPRIATION OF PROFIT 2011 2012
In millions of euros
Net income 58.7 22.3
Added to other reserves in accordance with article 27, paragraph 2 of the articles of association – 34.5 – 9.5
24.2 12.8
Net change in legal reserves – 0.5 0.6
23.7 13.4
Undistributed dividend balance from previous year 0.3 –
24.0 13.4
Payment of € 0.95 and € 0.50 dividend to holders of ordinary shares in accordance with article 27
paragraph 3 of the articles of association – 24.0 – 13.0
Undistributed dividend balance at year-end, which is transferred to the relevant account – 0.4
144 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
Ten-year summary
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
In millions of euros, unless stated otherwise
CONSOLIDATED PROFIT
AND LOSS ACCOUNT
Revenues 569.6 641.0 686.5 770.5 886.0 1,032.6 842.1 984.5 1,138.8 1,049.0
EBITDA 48.3 53.8 57.8 73.2 102.1 126.1 75.4 119.5 137.5 89.1
EBITA 29.8 34.9 39.2 51.1 73.0 95.4 41.5 85.0 102.5 52.0
OPERATING RESULT (EBIT) 28.7 34.6 38.5 50.1 69.4 83.8 32.7 74.6 89.6 37.5
Net fi nancial expenses – 7.0 – 6.8 – 4.6 – 8.0 – 11.3 – 13.7 – 12.7 – 10.0 – 11.3 – 12.1
Profi t tax – 5.3 – 9.2 – 11.5 – 11.4 – 11.9 – 19.1 – 5.6 – 17.9 – 18.7 – 8.7
Share in net income of
associated companies 3.9 5.1 8.1 45.4 0.3 – 8.7 – 1.3 – 1.3 – 0.3
RESULT AFTER PROFIT TAX 20.3 23.7 30.5 76.1 46.5 51.0 23.1 45.4 58.3 16.4
Non-controlling interest – – 0.1 – – 0.1 – 0.1 0.1 0.8 0.6 0.4 5.9
NET INCOME 20.3 23.6 30.5 76.0 46.4 51.1 23.9 46.0 58.7 22.3
Dividend 8.5 10.2 12.5 16.2 18.8 20.4 15.0 18.8 24.0 13.0
EBITA in % of revenues 5.2% 5.4% 5.7% 6.6% 8.2% 9.2% 4.9% 8.6% 9.0% 5.0%
Return on average net capital
employed2 11.7% 13.5% 15.3% 14.4% 13.1% 13.4% 5.7% 12.1% 13.1% 6.4%
1 Figures based on Dutch GAAP.
2 Prior to 2007, based on net capital employed at year-end.
1 1
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 145
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CONSOLIDATED
BALANCE SHEET
Intangible assets 10.6 12.1 13.8 12.4 136.8 212.1 203.8 242.8 273.0 269.4
Tangible fi xed assets 118.1 118.8 161.4 165.8 218.1 247.4 214.7 214.2 221.9 196.7
Financial fi xed assets 11.4 19.9 35.2 18.3 19.8 25.1 45.3 34.2 36.8 47.0
Total non-current assets 140.1 150.8 210.4 196.5 374.7 484.6 463.8 491.2 531.7 513.1
Inventories 110.0 138.6 157.5 157.7 176.2 211.5 155.0 216.9 267.9 226.4
Receivables 91.7 98.8 125.0 128.2 166.2 187.7 116.9 169.8 181.1 159.7
Securities and cash 5.8 2.7 4.6 6.7 4.8 5.4 12.8 11.6 22.7 26.7
Total current assets 207.5 240.1 287.1 292.6 347.2 404.6 284.7 398.3 471.7 412.8
TOTAL ASSETS 347.6 390.9 497.5 489.1 721.9 889.2 748.5 889.5 1,003.4 925.9
Equity 162.0 146.5 181.8 238.7 310.1 366.9 380.8 438.5 465.8 457.2
Non-controlling interest 0.1 0.1 – 0.2 0.3 5.1 4.1 3.8 3.7 – 1.9
Group equity 162.1 146.6 181.8 238.9 310.4 372.0 384.9 442.3 469.5 455.3
Provisions 15.6 52.1 56.1 43.8 40.8 43.5 40.5 32.0 50.6 65.3
Long-term debts 82.9 74.1 130.2 63.5 222.3 316.2 192.0 195.2 275.1 220.3
Banks and short-term loans 13.9 24.6 27.1 30.4 12.9 20.3 16.3 57.1 36.3 36.3
Other short-term debts 73.1 93.5 102.3 112.5 135.5 137.2 114.8 162.9 171.9 148.7
TOTAL LIABILITIES 347.6 390.9 497.5 489.1 721.9 889.2 748.5 889.5 1,003.4 925.9
Group equity/total equity 47% 38% 37% 49% 43% 42% 51% 50% 47% 49%
Acquisitions /(de)consolidations 0.3 29.2 40.8 – 63.0 175.1 88.1 – 3.3 24.7 34.8 15.7
Investments in tangible and
intangible fi xed assets 16 .9 12.0 26.2 43.0 62.9 48.0 17.3 21.3 25.7 16.6
Working capital 128.6 143.9 180.2 173.4 206.9 262.0 157.1 223.8 277.1 237.4
Depreciation and amortisation 19.6 19.2 19.3 23.1 32.7 42.3 42.7 44.9 47.9 51.6
Number of staff years
at year-end 3,245 3,634 3,578 3,532 4,020 4,437 3,805 4,271 4,353 4,454
Number of shares outstanding
at year-end (x1,000) 20,096 20,472 20,784 21,063 23,556 23,967 25,068 25,502 25,929 26,498
Net earnings per €2.50 share 1.03 1.17 1.48 3.66 2.04 2.18 0.97 1.84 2.31 0.86
Dividend per share in euros 0.43 0.50 0.60 0.70 0.80 0.85 0.60 0.75 0.95 0.50
Closing price in euros 9.02 13.55 21.50 23.21 21.27 16.05 18.43 28.00 21.26 19.87
1 Figures based on Dutch GAAP.
1 1
146 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
EBITDA Earnings before interest, profi t tax, net
fi nancial expenses, depreciation and
amortisation.
Fix it / exit strategy Making non-core parts of the company
healthy or profi table with a view to sale. The
proceeds are used for new acquisitions.
FM Global Award Certifi cate issued by FM Global to companies
which fulfi l all of this insurer's guidelines for
loss prevention.
Geosynthetics Woven geotextile materials, non-wovens and
grids based on polypropylene and
polyethylene.
Global Reporting
Initiative
The Global Reporting Initiative (GRI) is an
international organisation which draws up
guidelines and defi nitions for sustainability
reporting.
Joint venture Form of cooperation in which TenCate forms a
new company with one or more organisations
and develops new or existing joint activities
from that company.
Market group Clustering of subsidiaries (operating
companies) which cooperate in research and
development, production, end-user marketing
and sales.
Market window Market group with a series of related product-
market-technology combinations, in which the
basic technologies are complementary.
Market window The ideal time to launch a product on the
market. Also: possible market application.
Net capital
employed
The capital made available to the company,
comprising total equity plus loans and
provisions made available, less the balance of
cash and cash equivalents.
Glossary
Advanced composites Fibre-reinforced composites in a polymer
matrix.
Business model TenCate’s business model focuses on value
chain management based on four pillars:
■ End-user marketing
■ Technological innovation
■ Cost leadership
■ Product differentiation.
Buy & build strategy Acquisition and association of businesses and
business units with complementary product
portfolios, technologies and markets for
operational and strategic synergy resulting in
greater market opportunities and profi tability.
Composite A combination of two or more advanced
materials (e.g. based on carbon fi bre, glass
fi bre and aramid fabrics) which is stronger
than the materials in themselves.
Corporate
governance
Rules and conduct standards drawn up by the
Tabaksblat Committee, to which companies
must adhere for good governance and on
which they are accountable.
Also: good, effi cient and responsible
management of a company, on which the
company accounts to all its stakeholders.
CSR Performance
Ladder
Certifi cation standard with fi ve levels for
corporate social responsibility.
Earnings per share
(diluted)
Net result divided by the weighted average
number of diluted shares during the year.
Earnings per share
(ordinary)
Net result divided by the weighted average
number of ordinary shares during the year.
EBIT Earnings before interest, profi t tax and net
fi nancial expenses.
EBITA Earnings before interest, profi t tax, net
fi nancial expenses and amortisation.
Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS | 147
Thermoplastic
composite
Composite which becomes soft when heated
and can thus be formed into the desired
shape; a reversible and hence physical
process. All thermoplastics are in principle
recyclable.
Thermoset composite Composite which remains hard and
disintegrates when heated; a chemical and
hence irreversible process.
Weighted average
number of shares
(diluted)
The weighted average number of ordinary
shares issued, including the effect of
outstanding option rights.
Weighted average
number of shares
(ordinary)
The weighted average number of shares
issued, including the weighted average
number of exercised option rights, corrected
for the weighted average of own shares held.
Working capital The total of inventories and receivables less
trade creditors and other payables and short-
term profi t tax liabilities.
Working capital in
days
Working capital expressed in days of
revenues over the last quarter (calculated on
an annual basis).
Net debt position Long-term and short-term interest-bearing
loans and other fi nancial liabilities, less cash
and cash equivalents.
Net result Result after deduction of non-controlling
interests (result attributable to shareholders
of the company).
Prepreg Thin fi lm of a substrate (usually fabric) which
is pre-impregnated with a resin.
Process ecotool A measuring instrument used to determine
the CO2 footprint of the processes in the
TenCate market groups as fully and clearly as
possible (‘inside the gate’).
Product ecotool Using specifi c parameters to determine the
CO2 footprint of TenCate products (‘outside
the gate’).
Sector Technology cluster of business units in which
the purchasing of raw materials is
concentrated on the basis of distinctive
technologies.
Stakeholders Stakeholders of the company, including
employees, suppliers, customers, end-users,
shareholders, analysts and residents in the
surrounding area.
Subsidiary (operating
company)
Unit (operating company) which is owned
more than 50% by Royal Ten Cate.
System approach Increasing desire/ability to provide
coordinated components (e.g. fabrics) as part
of a system.
TenCate base
technologies
Fibre, weaving and fi nishing technology;
market windows are protective fabrics,
outdoor fabrics and composites for aerospace,
automotive and armour. Non-woven, grid and
extrusion technology; market windows are
geotextiles, industrial fabrics and synthetic
turf.
148 | Royal Ten Cate Annual Report 2012 | FINANCIAL STATEMENTS
TenCate would like to hear from you. Please let us know your views by
e-mailing ir@tencate.com, stating the market group or offi cer you wish
to contact. You can also contact us using the details shown below.
business development & investor relations
F.R. Spaan, director
ir@tencate.com
Royal Ten Cate
Stationsstraat 11
P.O. Box 58
7600 GD Almelo, The Netherlands
Telephone +31 (0)546 544 911
Fax +31 (0)546 814 145
www.tencate.com
Contact
Profi leSubsidiaries, associated companies and other interests
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsGroup activities of the TenCate Advanced Textiles group in the Netherlands
Ten Cate Protect bv Nijverdal, NetherlandsTen Cate Protective Fabrics USA inc Union City (Georgia), USATen Cate Protective Fabrics Canada inc Montreal (Quebec), CanadaFabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate - Union Protective Fabrics Asia ltd (50.65%) Bangkok, ThailandFabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, NetherlandsAdvanced composites for the aircraft industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USACCS Composites inc Benicia (California), USAAdvanced composites for aerospace and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaTC3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry,
oil & gas extraction and consumer electronics
TenCate Advanced Armour UK (AML) Swindon, UKDesign and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, FranceTen Cate Advanced Armour Danmark a/s Vissenbjerg, DenmarkAdvanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USAAdvanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) Vissenbjerg, DenmarkActive protection systems for army vehicles
AML India Private ltd (90%) Noida, IndiaDesign and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USATen Cate Geosynthetics Austria GmbH Linz, AustriaTen Cate Geosynthetics France sas Bezons, FranceTen Cate Geosynthetics Netherlands bv Nijverdal, NetherlandsTen Cate Geosynthetics Asia sdn bhd Kuala Lumpur, MalaysiaTenCate Industrial Zhuhai co ltd Zhuhai, ChinaGeosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, MalaysiaTen Cate Geosynthetics (Thailand) ltd Bangkok, ThailandTen Cate Geosynthetics pte ltd SingaporeTen Cate Geosynthetics Italia srl Lazzata, ItalyTen Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics sl Madrid, SpainTen Cate Geosynthetics Schweiz AG Zurich, SwitzerlandTen Cate Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Polska Spzoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Rumania Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsTen Cate Thiolon USA inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1 Dubai, UAESynthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, NetherlandsBacking for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, NetherlandsGreenFields BV Genemuiden, Netherlands(subsidiary of GreenFields Holding BV)
Xtra Grass BV * Kampen, Netherlands
ProCourt Int BV * Zederik, Netherlands
GreenFields Eastern Europe BV * Genemuiden, Netherlands
GreenFields Noo (Bresco) AS * Molde, Norway
GreenFields Swiss AG * Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) * Nicosia, Cyprus
GreenFields West Africa SARL (65%) * Cotonou, Benin
GreenFields UK Sports Surfaces Ltd * Bolton, UK
GreenFields India FZC (51%) * Sharjah, UAE GreenFields Golf & Leisure BV Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New ZealandTigerTurf Australia pty ltd (80%) Campbellfi eld, AustraliaTigerTurf (UK) ltd (80%) Hartlebury, UKTiger Sports Americas inc (80%) Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
* Subsidiary of GreenFields BV1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
The operating companies listed here are consolidated in the fi nancial 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.
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Xennia Holland bv Nijverdal, NetherlandsSpecialist inkjet technology for industrial applications
Ten Cate Enbi International bv Brunssum, NetherlandsTenCate Enbi group holding company
Ten Cate Enbi GmbH Leverkusen, GermanyTen Cate Enbi kft Rétság, HungaryTen Cate Enbi inc Shelbyville (Indiana), USATen Cate Enbi inc Rochester (New York), USATen Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, ChinaTechnical rollers and components for printers, copiers, fax machines, postal sorting
machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, NetherlandsInsurance
Ten Cate Nederland bv Almelo, NetherlandsRoyal Ten Cate USA inc Atlanta (Georgia), USATen Cate USA inc Washington D.C., USATen Cate UK ltd London, UKTen Cate France sas Paris, FranceTen Cate Deutschland GmbH Opladen, GermanyTen Cate Danmark a/s Copenhagen, DenmarkRoyal Ten Cate Pacifi c ltd Hong Kong, ChinaRoyal Ten Cate China Holding ltd Hong Kong, ChinaCountry holding companies
Ten Cate Finance AG Schaffhausen, SwitzerlandFinancing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, NetherlandsMarketing and production organisation for synthetic turf for landscaping use
Hellas Construction Inc (30%) Austin (Texas), USAProduction and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UKMarketing and installation of synthetic turf systems
as at 31 December 2012
Worldwide trends
Safety Sustainability
Market themes
Personal protection Defence Mobility Infrastructure Water managementSport and recreation
Materials for protection of persons in their working and living
environments
Materials for protection of military personnel; vehicle, vessel and
aircraft armour
Composites for vehicles, vessels, aircraft and
mobility concepts
Geotextiles for infrastructure works;
synthetic turf for landscaping
Geotextiles and systems (TenCate Geotube®) for maritime projects and
dewatering
Synthetic turf for sport; outdoor fabrics
PROTECTING PEOPLE
TenCate focuses on the growing demand for protection of people and their working and living environments. TenCate occupies a unique technology position at the interface of chemicals and textile technology, enabling the company to develop materials, modules and systems that are an optimum match for specifi c market demands, usually involving strict functional requirements.
VISION TenCate is a company specialising in materials engineering. By combining technologies it is possible to produce new materials, and these developments also generate new markets and growth for the company. TenCate increasingly offers total solutions, independently or in co-operation with partners.
MATERIAL TECHNOLOGY AND
INNOVATION
Professionals across a wide range of fi elds deserve the best protection in their specifi c working environment. New demands are also being made on protection solutions to meet sustainability requirements. TenCate constantly develops materials, modules and systems which do precisely what is required of them. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system.
MISSION One of TenCate’s main driving forces is the achievement of progress through innovative material solutions. TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of working and living environments.
TECHNICAL
TEXTILES
TenCate is the world market leader in technical textiles. These materials have specifi c characteristics which are usually defi ned and qualifi ed on the basis of functional specifi cations. TenCate maintains an active portfolio policy and with its advanced technological base – partly resulting from acquisitions – is able to offer the widest range of functionalities in materials. It does this independently or in co-operation with third parties.
TenCate’s materials are used in particular for: ■ Personal safety and protection of working
and living environments ■ Modernisation of army, fi refi ghting
and police equipment ■ Aerospace ■ Water management, infrastructure
and environmental solutions ■ Industrial applications
STRATEGY The strategy over the past decade has been based on value-chain management. The cornerstones of this policy are
■ end-user marketing ■ technological innovation ■ cost leadership and ■ product differentiation
The use of network structures with partners in the value chain adds a new dimension to this business model. The aim of this is to increase access to markets and strengthen the competitive position.
The result of the buy & build strategy is that existing market positions are strengthened and new market positions (product-market-technology combinations) are gradually built up, particularly through technology-oriented acquisitions.
The fi x it / exit strategy remains in place, although in the past most non- textile-oriented businesses were divested. TenCate maintains an active portfolio policy, as part of which it continuously assesses whether business units still fi t in with its value-chain model.
TenCate
Royal Ten Cate (TenCate) is a multinational company which combines
textile technology with chemical process technology in the development
and production of functional materials (technical textiles). The Group’s
technological base determines the high-grade applications (product-
market-technology combinations) which TenCate supplies in selected
niche markets.
Value-chain management
TenCate’s business model is based on the pursuit of optimum positioning
in the value chain by means of value-chain management. To that end,
actions and objectives are defi ned in four areas: end-user marketing,
technology-driven innovation and cost leadership combined with active
portfolio management (product differentiation).
Worldwide trends
The connecting factor within TenCate is the development and production
of materials, modules and systems which usually meet demands arising
from safety or protection requirements or positively impact environmental
requirements or standards. Such requirements are usually prescribed by
governments and enacted in legislation. Standards are often laid down at
product level which materials must fulfi l in terms of their function,
composition and/or quality characteristics.
Risks of accidents, injury, damage and environmental disasters must be
prevented to the maximum extent possible. Safety and protection of
persons and their working and living environments are worldwide growth
markets.
Market themes
TenCate operates principally within six market themes which have been
derived from the worldwide trends of safety and sustainability identifi ed
for the company. The materials developed on the basis of these themes
meet specifi c requirements that arise within these niche markets.
Organisational structure
TenCate’s organisational structure is based on the various production
technologies developed within the company. The organisation is divided
into two sectors: Advanced Textiles & Composites (spinning, weaving,
coating, fabric impregnation and laminate pressing) and Geosynthetics
& Grass (extrusion of synthetic fi bres such as PP and PE, weaving and
non-woven technology).
Main products of the Advanced Textiles
& Composites sector
■ Flame- and heat-resistant materials for army uniforms
(Ten Cate Defender™ M)
■ Safety materials for professional wear
■ Prepregs for the production of thermohardened and thermoplastic
composites
■ Composite laminates
■ Armour materials and systems for army and other vehicles
Main products of the Geosynthetics & Grass sector
■ Woven materials and non-wovens for infrastructure works,
construction and civil engineering
■ TenCate Geotube® systems for the dewatering of industrial and
other sludge, environmental projects, dyke construction and other
civil engineering works
■ Synthetic turf yarns
■ Synthetic turf systems
Royal Ten Cate
Profi leSubsidiaries, associated companies and other interests
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsGroup activities of the TenCate Advanced Textiles group in the Netherlands
Ten Cate Protect bv Nijverdal, NetherlandsTen Cate Protective Fabrics USA inc Union City (Georgia), USATen Cate Protective Fabrics Canada inc Montreal (Quebec), CanadaFabrics for professional wear and safety clothing as well as outdoor applications
Ten Cate - Union Protective Fabrics Asia ltd (50.65%) Bangkok, ThailandFabrics for protective clothing
Ten Cate Advanced Composites bv Nijverdal, NetherlandsAdvanced composites for the aircraft industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USACCS Composites inc Benicia (California), USAAdvanced composites for aerospace and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaTC3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry,
oil & gas extraction and consumer electronics
TenCate Advanced Armour UK (AML) Swindon, UKDesign and production of vehicle armour materials
Ten Cate Advanced Armour sas Primarette, FranceTen Cate Advanced Armour Danmark a/s Vissenbjerg, DenmarkAdvanced ceramics and composites for antiballistic applications
Ten Cate Advanced Armor USA inc Newark (Ohio), USAAdvanced composites for vehicle armour
Ten Cate Active Protection ApS (ABDS) Vissenbjerg, DenmarkActive protection systems for army vehicles
AML India Private ltd (90%) Noida, IndiaDesign and production of vehicle armour materials
GEOSYNTHETICS & GRASS SECTOR
Ten Cate Geosynthetics North America inc Atlanta (Georgia), USATen Cate Geosynthetics Austria GmbH Linz, AustriaTen Cate Geosynthetics France sas Bezons, FranceTen Cate Geosynthetics Netherlands bv Nijverdal, NetherlandsTen Cate Geosynthetics Asia sdn bhd Kuala Lumpur, MalaysiaTenCate Industrial Zhuhai co ltd Zhuhai, ChinaGeosynthetics and industrial fabrics
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, MalaysiaTen Cate Geosynthetics (Thailand) ltd Bangkok, ThailandTen Cate Geosynthetics pte ltd SingaporeTen Cate Geosynthetics Italia srl Lazzata, ItalyTen Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics sl Madrid, SpainTen Cate Geosynthetics Schweiz AG Zurich, SwitzerlandTen Cate Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Polska Spzoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Rumania Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsTen Cate Thiolon USA inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1 Dubai, UAESynthetic turf components and systems
Ten Cate Thiobac bv Nijverdal, NetherlandsBacking for synthetic turf systems
GreenFields Holding BV (90%) Genemuiden, NetherlandsGreenFields BV Genemuiden, Netherlands(subsidiary of GreenFields Holding BV)
Xtra Grass BV * Kampen, Netherlands
ProCourt Int BV * Zederik, Netherlands
GreenFields Eastern Europe BV * Genemuiden, Netherlands
GreenFields Noo (Bresco) AS * Molde, Norway
GreenFields Swiss AG * Schaffhausen, Switzerland
GreenFields Sports Turf Systems (ME) Ltd (80%) * Nicosia, Cyprus
GreenFields West Africa SARL (65%) * Cotonou, Benin
GreenFields UK Sports Surfaces Ltd * Bolton, UK
GreenFields India FZC (51%) * Sharjah, UAE GreenFields Golf & Leisure BV Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd (80%) Auckland, New ZealandTigerTurf Australia pty ltd (80%) Campbellfi eld, AustraliaTigerTurf (UK) ltd (80%) Hartlebury, UKTiger Sports Americas inc (80%) Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
* Subsidiary of GreenFields BV1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has
100% economic ownership.
The operating companies listed here are consolidated in the fi nancial 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.
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (78.95%) Letchworth, UK Xennia Holland bv Nijverdal, NetherlandsSpecialist inkjet technology for industrial applications
Ten Cate Enbi International bv Brunssum, NetherlandsTenCate Enbi group holding company
Ten Cate Enbi GmbH Leverkusen, GermanyTen Cate Enbi kft Rétság, HungaryTen Cate Enbi inc Shelbyville (Indiana), USATen Cate Enbi inc Rochester (New York), USATen Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, ChinaTechnical rollers and components for printers, copiers, fax machines, postal sorting
machines, ATMs, insulation and heating systems
Ten Cate Assurantiën bv Almelo, NetherlandsInsurance
Ten Cate Nederland bv Almelo, NetherlandsRoyal Ten Cate USA inc Atlanta (Georgia), USATen Cate USA inc Washington D.C., USATen Cate UK ltd London, UKTen Cate France sas Paris, FranceTen Cate Deutschland GmbH Opladen, GermanyTen Cate Danmark a/s Copenhagen, DenmarkRoyal Ten Cate Pacifi c ltd Hong Kong, ChinaRoyal Ten Cate China Holding ltd Hong Kong, ChinaCountry holding companies
Ten Cate Finance AG Schaffhausen, SwitzerlandFinancing company
NON-CONSOLIDATED COMPANIES
Landscape Solutions bv (25%) Goirle, NetherlandsMarketing and production organisation for synthetic turf for landscaping use
Hellas Construction Inc (30%) Austin (Texas), USAProduction and construction of sports pitches
GreenFields (All Sports) UK Ltd (49%) Stepps, UKMarketing and installation of synthetic turf systems
as at 31 December 2012
Worldwide trends
Safety Sustainability
Market themes
Personal protection Defence Mobility Infrastructure Water managementSport and recreation
Materials for protection of persons in their working and living
environments
Materials for protection of military personnel; vehicle, vessel and
aircraft armour
Composites for vehicles, vessels, aircraft and
mobility concepts
Geotextiles for infrastructure works;
synthetic turf for landscaping
Geotextiles and systems (TenCate Geotube®) for maritime projects and
dewatering
Synthetic turf for sport; outdoor fabrics
PROTECTING PEOPLE
TenCate focuses on the growing demand for protection of people and their working and living environments. TenCate occupies a unique technology position at the interface of chemicals and textile technology, enabling the company to develop materials, modules and systems that are an optimum match for specifi c market demands, usually involving strict functional requirements.
VISION TenCate is a company specialising in materials engineering. By combining technologies it is possible to produce new materials, and these developments also generate new markets and growth for the company. TenCate increasingly offers total solutions, independently or in co-operation with partners.
MATERIAL TECHNOLOGY AND
INNOVATION
Professionals across a wide range of fi elds deserve the best protection in their specifi c working environment. New demands are also being made on protection solutions to meet sustainability requirements. TenCate constantly develops materials, modules and systems which do precisely what is required of them. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system.
MISSION One of TenCate’s main driving forces is the achievement of progress through innovative material solutions. TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of working and living environments.
TECHNICAL
TEXTILES
TenCate is the world market leader in technical textiles. These materials have specifi c characteristics which are usually defi ned and qualifi ed on the basis of functional specifi cations. TenCate maintains an active portfolio policy and with its advanced technological base – partly resulting from acquisitions – is able to offer the widest range of functionalities in materials. It does this independently or in co-operation with third parties.
TenCate’s materials are used in particular for: ■ Personal safety and protection of working
and living environments ■ Modernisation of army, fi refi ghting
and police equipment ■ Aerospace ■ Water management, infrastructure
and environmental solutions ■ Industrial applications
STRATEGY The strategy over the past decade has been based on value-chain management. The cornerstones of this policy are
■ end-user marketing ■ technological innovation ■ cost leadership and ■ product differentiation
The use of network structures with partners in the value chain adds a new dimension to this business model. The aim of this is to increase access to markets and strengthen the competitive position.
The result of the buy & build strategy is that existing market positions are strengthened and new market positions (product-market-technology combinations) are gradually built up, particularly through technology-oriented acquisitions.
The fi x it / exit strategy remains in place, although in the past most non- textile-oriented businesses were divested. TenCate maintains an active portfolio policy, as part of which it continuously assesses whether business units still fi t in with its value-chain model.
TenCate
Royal Ten Cate (TenCate) is a multinational company which combines
textile technology with chemical process technology in the development
and production of functional materials (technical textiles). The Group’s
technological base determines the high-grade applications (product-
market-technology combinations) which TenCate supplies in selected
niche markets.
Value-chain management
TenCate’s business model is based on the pursuit of optimum positioning
in the value chain by means of value-chain management. To that end,
actions and objectives are defi ned in four areas: end-user marketing,
technology-driven innovation and cost leadership combined with active
portfolio management (product differentiation).
Worldwide trends
The connecting factor within TenCate is the development and production
of materials, modules and systems which usually meet demands arising
from safety or protection requirements or positively impact environmental
requirements or standards. Such requirements are usually prescribed by
governments and enacted in legislation. Standards are often laid down at
product level which materials must fulfi l in terms of their function,
composition and/or quality characteristics.
Risks of accidents, injury, damage and environmental disasters must be
prevented to the maximum extent possible. Safety and protection of
persons and their working and living environments are worldwide growth
markets.
Market themes
TenCate operates principally within six market themes which have been
derived from the worldwide trends of safety and sustainability identifi ed
for the company. The materials developed on the basis of these themes
meet specifi c requirements that arise within these niche markets.
Organisational structure
TenCate’s organisational structure is based on the various production
technologies developed within the company. The organisation is divided
into two sectors: Advanced Textiles & Composites (spinning, weaving,
coating, fabric impregnation and laminate pressing) and Geosynthetics
& Grass (extrusion of synthetic fi bres such as PP and PE, weaving and
non-woven technology).
Main products of the Advanced Textiles
& Composites sector
■ Flame- and heat-resistant materials for army uniforms
(Ten Cate Defender™ M)
■ Safety materials for professional wear
■ Prepregs for the production of thermohardened and thermoplastic
composites
■ Composite laminates
■ Armour materials and systems for army and other vehicles
Main products of the Geosynthetics & Grass sector
■ Woven materials and non-wovens for infrastructure works,
construction and civil engineering
■ TenCate Geotube® systems for the dewatering of industrial and
other sludge, environmental projects, dyke construction and other
civil engineering works
■ Synthetic turf yarns
■ Synthetic turf systems
Royal Ten Cate
ADVANCED
TEXTILES & COMPOSITES
SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions
for industry, services, fi refi ghting and defence
■ TenCate Protective Fabrics Americas
■ TenCate Protective Fabrics EMEA
■ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications,
such as the camping and sun awning market
■ 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
GEOSYNTHETICS
& GRASS SECTOR
GEOSYNTHETICS Synthetic fabrics, non-wovens and grids for solutions
and applications in infrastructure, civil engineering,
water management, the environmental sector,
agriculture and horticulture
■ TenCate Geosynthetics Americas
■ TenCate Geosynthetics EMEA
■ TenCate Geosynthetics Asia
GRASS Synthetic turf components and integrated synthetic
turf systems for top-fl ight sports, recreation and
landscaping
Upstream
■ TenCate Grass Americas
■ TenCate Grass EMEA
■ TenCate Grass Asia
Downstream
■ Edel Grass (50%)
■ GreenFields (90%)
■ TigerTurf (80%)
■ Hellas Construction (30%)
OTHER ACTIVITIES
SECTOR
INKJET TECHNOLOGY Digital 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
HOLDING & SERVICES Holding company activities
■ Koninklijke Ten Cate nv
Commercial overviewAs at 1 January 2013
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries (operating
companies) which co-operate in research & development, production, end-user marketing and sales.
A detailed list of all subsidiaries, associated companies and other interests (legal entities) can be found on the
inside back cover.
Royal Ten Cate Stationsstraat 11P.O. Box 587600 GD Almelo, The Netherlands
Telephone +31 (0)546 544 911Fax +31 (0)546 814 145www.tencate.com
business development & investor relationsF.R. Spaan, director
TenCate would like to hear from you. Please let us know your views by e-mailing ir@tencate.com, stating the market group or offi cer you wish to contact.You can also contact us using the details shown left.
Contact
Text
Royal Ten Cate
Translation
VVH business translations,
Maartensdijk
Design
Frontwise, Utrecht
Realisation
C&F Report Amsterdam B.V.,
Amsterdam
Printing
Lulof Druktechniek B.V.,
Almelo
Photography
Freek van Arkel
Joost van Baars
Marjo Baas
Stephen Barnett
Doug Bergen
Dennis de Beurs
Andreas Burmann
Frans Dekker
Paul Haverkort
Norbert Hekkink
Joel van Houdt
Cpl Ian Houlding
Vincent Jannink
Ton Kuper
Jonathan P. Larsen
Truls J. Lotvebt
Rens van Mierlo
Roelof Pot
Sylvain Ramadier
David Rozing
Robert Schlesinger
Frank Uijlenbroek
Courtesy © Airbus
Courtesy © BAM
Courtesy © Brand X Pictures
Courtesy © KNHB
Courtesy © NASA
Courtesy © Staff Sgt. Marcus J.
Quarterman, U.S. Army
Colophon Royal Ten Cate Annual Report 2012
PROTECTING PEOPLE
Royal Ten C
ate A
nnual Report 2012
ADVANCED
TEXTILES & COMPOSITES
SECTOR
PROTECTIVE FABRICSProtective and safety fabrics and multi-risk solutions
for industry, services, fi refi ghting and defence
■ TenCate Protective Fabrics Americas
■ TenCate Protective Fabrics EMEA
■ TenCate Protective Fabrics Asia
OUTDOOR FABRICS Protective fabrics for outdoor applications,
such as the camping and sun awning market
■ 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
GEOSYNTHETICS
& GRASS SECTOR
GEOSYNTHETICS Synthetic fabrics, non-wovens and grids for solutions
and applications in infrastructure, civil engineering,
water management, the environmental sector,
agriculture and horticulture
■ TenCate Geosynthetics Americas
■ TenCate Geosynthetics EMEA
■ TenCate Geosynthetics Asia
GRASS Synthetic turf components and integrated synthetic
turf systems for top-fl ight sports, recreation and
landscaping
Upstream
■ TenCate Grass Americas
■ TenCate Grass EMEA
■ TenCate Grass Asia
Downstream
■ Edel Grass (50%)
■ GreenFields (90%)
■ TigerTurf (80%)
■ Hellas Construction (30%)
OTHER ACTIVITIES
SECTOR
INKJET TECHNOLOGY Digital 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
HOLDING & SERVICES Holding company activities
■ Koninklijke Ten Cate nv
Commercial overviewAs at 1 January 2013
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries (operating
companies) which co-operate in research & development, production, end-user marketing and sales.
A detailed list of all subsidiaries, associated companies and other interests (legal entities) can be found on the
inside back cover.
Royal Ten Cate Stationsstraat 11P.O. Box 587600 GD Almelo, The Netherlands
Telephone +31 (0)546 544 911Fax +31 (0)546 814 145www.tencate.com
business development & investor relationsF.R. Spaan, director
TenCate would like to hear from you. Please let us know your views by e-mailing ir@tencate.com, stating the market group or offi cer you wish to contact.You can also contact us using the details shown left.
Contact
Text
Royal Ten Cate
Translation
VVH business translations,
Maartensdijk
Design
Frontwise, Utrecht
Realisation
C&F Report Amsterdam B.V.,
Amsterdam
Printing
Lulof Druktechniek B.V.,
Almelo
Photography
Freek van Arkel
Joost van Baars
Marjo Baas
Stephen Barnett
Doug Bergen
Dennis de Beurs
Andreas Burmann
Frans Dekker
Paul Haverkort
Norbert Hekkink
Joel van Houdt
Cpl Ian Houlding
Vincent Jannink
Ton Kuper
Jonathan P. Larsen
Truls J. Lotvebt
Rens van Mierlo
Roelof Pot
Sylvain Ramadier
David Rozing
Robert Schlesinger
Frank Uijlenbroek
Courtesy © Airbus
Courtesy © BAM
Courtesy © Brand X Pictures
Courtesy © KNHB
Courtesy © NASA
Courtesy © Staff Sgt. Marcus J.
Quarterman, U.S. Army
Colophon Royal Ten Cate Annual Report 2012
PROTECTING PEOPLE
Royal Ten C
ate A
nnual Report 2012
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