annual report 2013 organisation contact protecting people...annual report 2013 organisation sectors...
TRANSCRIPT
Protecting peopleIn transit
Royal Ten Cate
Annual report 2013 OrganisationSectors and market groups
PROTECTING PEOPLEPROTECTING PEOPLE
IN TRANSITIN HABITATS
AT WORKDURING LEISURE
Royal Ten Cate
Annual report 2013
TenCate would like to hear from you. Please let us know your views
by e-mailing [email protected], stating the market group or offi cer
you wish to contact. You can also contact us using the details
shown below.
Drs Pieter Zwinkels, investor relations manager
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
This annual report relates to the 2013 calendar year.
The annual report was published on the TenCate website
on Wednesday 17 March 2014 and is also available in printed form
from Tuesday 31 March.
Contact
Royal Ten Cate
ADVANCED TEXTILES & COMPOSITES SECTOR
GEOSYNTHETICS & GRASS SECTOR
OTHER ACTIVITIES SECTOR
PROTECTIVE FABRICS GEOSYNTHETICS INKJET TECHNOLOGY
Protective and safety fabrics and multi-risk solutions for fi refi ghting and defence, industry and services.
Synthetic fabrics, non-wovens, grids and systems for use in infrastructure, civil engineering, water management, the environmental sector, agriculture and horticulture.
Digital inkjet technologies for industrial production processes.
OUTDOOR FABRICS GRASS TECHNICAL COMPONENTS
Protective fabrics for outdoor applications, such as the camping and awning market.
Synthetic turf components and integrated synthetic turf systems for top-fl ight sports, recreation and landscaping.
Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs.
ADVANCED COMPOSITES HOLDING & SERVICES
Advanced composites, compounds and systems for the space and aerospace industry and industrial applications, including automotive, industrial components and energy generation.
Holding company activities, including fi nance, accounting, patent development and management, investor relations, business development, information technology, human resources management and insurance.
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.
. A legal overview of operating companies, associated companies and other interests can be found on the inside of the back fl ap.
Protecting peopleIn transit
Royal Ten Cate
Annual report 2013 OrganisationSectors and market groups
PROTECTING PEOPLEPROTECTING PEOPLE
IN TRANSITIN HABITATS
AT WORKDURING LEISURE
Royal Ten Cate
Annual report 2013
TenCate would like to hear from you. Please let us know your views
by e-mailing [email protected], stating the market group or offi cer
you wish to contact. You can also contact us using the details
shown below.
Drs Pieter Zwinkels, investor relations manager
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
This annual report relates to the 2013 calendar year.
The annual report was published on the TenCate website
on Wednesday 17 March 2014 and is also available in printed form
from Tuesday 31 March.
Contact
Royal Ten Cate
ADVANCED TEXTILES & COMPOSITES SECTOR
GEOSYNTHETICS & GRASS SECTOR
OTHER ACTIVITIES SECTOR
PROTECTIVE FABRICS GEOSYNTHETICS INKJET TECHNOLOGY
Protective and safety fabrics and multi-risk solutions for fi refi ghting and defence, industry and services.
Synthetic fabrics, non-wovens, grids and systems for use in infrastructure, civil engineering, water management, the environmental sector, agriculture and horticulture.
Digital inkjet technologies for industrial production processes.
OUTDOOR FABRICS GRASS TECHNICAL COMPONENTS
Protective fabrics for outdoor applications, such as the camping and awning market.
Synthetic turf components and integrated synthetic turf systems for top-fl ight sports, recreation and landscaping.
Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs.
ADVANCED COMPOSITES HOLDING & SERVICES
Advanced composites, compounds and systems for the space and aerospace industry and industrial applications, including automotive, industrial components and energy generation.
Holding company activities, including fi nance, accounting, patent development and management, investor relations, business development, information technology, human resources management and insurance.
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.
. A legal overview of operating companies, associated companies and other interests can be found on the inside of the back fl ap.
Royal Ten Cate
PROTECTING PEOPLE VISION
TenCate focuses on the growing demand for protection of people and their living and working environments. The worldwide trends towards ‘safety and protection’ and ‘sustainability and the environment’ serve as the focal points of the protective solutions which TenCate provides. The four market themes are In transit, In habitats, At work and During leisure. The end-markets in which TenCate operates are mobility, infrastructure, water management, defence, personal protection, sport and leisure.
TenCate’s vision is based on the development (‘buy & build’) of a broad, advanced technological base. As a company in the technical textile sector, TenCate occupies a broad and innovative technological position worldwide (including patent positions). That enables the company to develop materials which are an optimum match for individual market requirements in the chosen market themes of safety and protection of man and the environment.
MATERIALS ENGINEERING AND INNOVATION MISSION
TenCate is a multinational company which combines textile technology with chemical process technology in the development and production of functional materials, modules and systems which are an optimum match for specifi c market requirements. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system. The technological base determines the high-grade applications (product-market-technology combinations) which TenCate supplies in selected niche markets.
TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of living and working environments. Developing the right product portfolio, 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.
TECHNICAL TEXTILES STRATEGY
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 is able to offer the widest range of functionalities in materials, modules and systems. It does this independently or in co-operation with third parties.TenCate operates principally in six end-markets refl ecting the global trends of safety and sustainability. TenCate’s materials are used in particular for:
■ Personal safety and protection of living and working environments ■ Modernisation of army, fi refi ghting and police equipment ■ Aerospace ■ Water management, infrastructure and environmental solutions ■ Industrial applications
TenCate’s strategy is based on value-chain management. This business model 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. The cornerstones of this policy are end-user marketing, technological innovation, cost leadership and product differentiation. The creation of network structures with partners in the value chain adds a market-focused dimension to this business model. The aim is to improve access to markets and strengthen the competitive position, thereby giving fresh impetus to the growth of the company.
FocusFrom trends to solutions
Profi leMaterial technology group
WORLDWIDE TRENDS
SAFETY SUSTAINABILITY
PROTECTING PEOPLE
IN TRANSIT IN HABITATS AT WORK DURING LEISURE
Mobility continues to grow apace. Increasing prosperity is
making people worldwide more mobile and giving rise to
increased transportation of goods and raw materials
within and between continents, and even to
extraterrestrial destinations. Making those transport movements increasingly
effi cient, safe and sustainable is a challenge in itself.
Urbanisation is increasing steadily across all continents. Urban areas are growing ever
larger and more complex. Societies are changing into compact networks of cities.
That requires a high degree of organisation and logistics with
safe and sustainable infrastructure.
The working environment of personnel in industry and
services may be risky, hazardous or even hostile. Personal protection in the workplace, on the road,
on-site or during the mission is essential in order to work professionally and safely.
Leisure time increases as prosperity grows. In addition
to tourism and recreation, people are enjoying sports as amateurs or top-fl ight
performers. Leisure activities and sports must above all be pursued responsibly.
That requires safe, sustainable facilities.
END-MARKETS
MOBILITY INFRASTRUCTUREWATER
MANAGEMENTDEFENCE
PERSONAL PROTECTION
SPORT AND LEISURE
Composites for vehicles, vessels,
aircraft, helicopters and
mobility concepts
Geotextiles for infrastructure
works; composites
for structures; synthetic turf for
landscaping
Geotextiles and systems for water
management, maritime projects and dewatering
Materials for protection of military personnel;
vehicle, vessel, aircraft and
helicopter armour
Materials for protection of
persons in their working and living
environments
Synthetic turf for sport; outdoor
fabrics; composites for
sport applications
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsActivities 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 aviation industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USAAdvanced composites for aerospace, aviation and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaT3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry, oil & gas extraction and consumer electronics
Ten Cate Advanced Composites ltd Nottingham, UKAdvanced composites for industrial and automotive applications
Ten Cate Advanced Armour UK (AML) Swindon, UKTen 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, IndiaTen Cate Protective India Private ltd Gurgaon, IndiaDesign and production of vehicle armour materials and fabrics for professional wear and safety clothing as well as outdoor applications
GEOSYNTHETICS & GRASS SECTOR
Nicolon Corp. (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 Italy srl Meda, Italy Ten Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics Iberia sl Madrid, SpainTen Cate Geosynthetics Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Poland Sp zoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Romania srl Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsPolyloom Corp. (Ten Cate Thiolon USA) inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1) Dubai, United Arab EmiratesSynthetic 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, NetherlandsBresco AS *) Molde, NorwayGreenFields Swiss AG *) Schaffhausen, SwitzerlandGreenFields Sports Turf Systems (ME) Ltd (80%) *) Nicosia, CyprusGreenFields West Africa SARL (65%) *) Cotonou, BeninGreenFields Sports Surfaces UK Ltd *) Bolton, UKGreenFields India FZC (51%) *) Sharjah, United Arab EmiratesMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd Auckland, New ZealandTigerTurf Australia pty ltd Campbellfi eld, AustraliaTigerTurf (UK) ltd Hartlebury, UKTiger Sports Americas inc Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (90.88%) 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 SingaporeTen 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 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
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.
*) Subsidiary of GreenFields BV.1) Due to legislation in Dubai, 51% is held by a local partner.
Royal Ten Cate has 100% economic ownership.
Subsidiaries, associated companies and other interests as at 31 December 2013
Royal Ten Cate
PROTECTING PEOPLE VISION
TenCate focuses on the growing demand for protection of people and their living and working environments. The worldwide trends towards ‘safety and protection’ and ‘sustainability and the environment’ serve as the focal points of the protective solutions which TenCate provides. The four market themes are In transit, In habitats, At work and During leisure. The end-markets in which TenCate operates are mobility, infrastructure, water management, defence, personal protection, sport and leisure.
TenCate’s vision is based on the development (‘buy & build’) of a broad, advanced technological base. As a company in the technical textile sector, TenCate occupies a broad and innovative technological position worldwide (including patent positions). That enables the company to develop materials which are an optimum match for individual market requirements in the chosen market themes of safety and protection of man and the environment.
MATERIALS ENGINEERING AND INNOVATION MISSION
TenCate is a multinational company which combines textile technology with chemical process technology in the development and production of functional materials, modules and systems which are an optimum match for specifi c market requirements. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system. The technological base determines the high-grade applications (product-market-technology combinations) which TenCate supplies in selected niche markets.
TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of living and working environments. Developing the right product portfolio, 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.
TECHNICAL TEXTILES STRATEGY
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 is able to offer the widest range of functionalities in materials, modules and systems. It does this independently or in co-operation with third parties.TenCate operates principally in six end-markets refl ecting the global trends of safety and sustainability. TenCate’s materials are used in particular for:
■ Personal safety and protection of living and working environments ■ Modernisation of army, fi refi ghting and police equipment ■ Aerospace ■ Water management, infrastructure and environmental solutions ■ Industrial applications
TenCate’s strategy is based on value-chain management. This business model 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. The cornerstones of this policy are end-user marketing, technological innovation, cost leadership and product differentiation. The creation of network structures with partners in the value chain adds a market-focused dimension to this business model. The aim is to improve access to markets and strengthen the competitive position, thereby giving fresh impetus to the growth of the company.
FocusFrom trends to solutions
Profi leMaterial technology group
WORLDWIDE TRENDS
SAFETY SUSTAINABILITY
PROTECTING PEOPLE
IN TRANSIT IN HABITATS AT WORK DURING LEISURE
Mobility continues to grow apace. Increasing prosperity is
making people worldwide more mobile and giving rise to
increased transportation of goods and raw materials
within and between continents, and even to
extraterrestrial destinations. Making those transport movements increasingly
effi cient, safe and sustainable is a challenge in itself.
Urbanisation is increasing steadily across all continents. Urban areas are growing ever
larger and more complex. Societies are changing into compact networks of cities.
That requires a high degree of organisation and logistics with
safe and sustainable infrastructure.
The working environment of personnel in industry and
services may be risky, hazardous or even hostile. Personal protection in the workplace, on the road,
on-site or during the mission is essential in order to work professionally and safely.
Leisure time increases as prosperity grows. In addition
to tourism and recreation, people are enjoying sports as amateurs or top-fl ight
performers. Leisure activities and sports must above all be pursued responsibly.
That requires safe, sustainable facilities.
END-MARKETS
MOBILITY INFRASTRUCTUREWATER
MANAGEMENTDEFENCE
PERSONAL PROTECTION
SPORT AND LEISURE
Composites for vehicles, vessels,
aircraft, helicopters and
mobility concepts
Geotextiles for infrastructure
works; composites
for structures; synthetic turf for
landscaping
Geotextiles and systems for water
management, maritime projects and dewatering
Materials for protection of military personnel;
vehicle, vessel, aircraft and
helicopter armour
Materials for protection of
persons in their working and living
environments
Synthetic turf for sport; outdoor
fabrics; composites for
sport applications
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsActivities 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 aviation industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USAAdvanced composites for aerospace, aviation and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaT3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry, oil & gas extraction and consumer electronics
Ten Cate Advanced Composites ltd Nottingham, UKAdvanced composites for industrial and automotive applications
Ten Cate Advanced Armour UK (AML) Swindon, UKTen 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, IndiaTen Cate Protective India Private ltd Gurgaon, IndiaDesign and production of vehicle armour materials and fabrics for professional wear and safety clothing as well as outdoor applications
GEOSYNTHETICS & GRASS SECTOR
Nicolon Corp. (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 Italy srl Meda, Italy Ten Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics Iberia sl Madrid, SpainTen Cate Geosynthetics Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Poland Sp zoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Romania srl Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsPolyloom Corp. (Ten Cate Thiolon USA) inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1) Dubai, United Arab EmiratesSynthetic 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, NetherlandsBresco AS *) Molde, NorwayGreenFields Swiss AG *) Schaffhausen, SwitzerlandGreenFields Sports Turf Systems (ME) Ltd (80%) *) Nicosia, CyprusGreenFields West Africa SARL (65%) *) Cotonou, BeninGreenFields Sports Surfaces UK Ltd *) Bolton, UKGreenFields India FZC (51%) *) Sharjah, United Arab EmiratesMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd Auckland, New ZealandTigerTurf Australia pty ltd Campbellfi eld, AustraliaTigerTurf (UK) ltd Hartlebury, UKTiger Sports Americas inc Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (90.88%) 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 SingaporeTen 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 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
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.
*) Subsidiary of GreenFields BV.1) Due to legislation in Dubai, 51% is held by a local partner.
Royal Ten Cate has 100% economic ownership.
Subsidiaries, associated companies and other interests as at 31 December 2013
Organisation, Focus and Profile Inside coverKey developments in 2013 2
Assessment of 2013 action plans 3Key data 2013 4
Key figures 2013 6The TenCate share 7
Foreword by the Chairman of the Executive Board 10Protecting people in transit 14
Business overview 15Vision, mission and strategy 16
Strategic objectives 17Business model and value creation 18Strategic objectives and progress 23
Indicators 24Sectors 32
Corporate information 41
Business context 47Business environment 48
Stakeholders 50Materiality matrix 52
SWOT analysis 54Risk management 56
Governance 59Executive Board 60
Supervisory Board 61Report of the Supervisory Board 62
Corporate governance 65
Performance 67Report of the Executive Board 68
Sector revenues and results 72
Outlook 93Outlook for 2014 94
Action plans for 2014 95Corporate initiatives for 2014 96
Statement by the Executive Board 97
Financial statements 99Financial statements 2013 100
Other information 151Ten-year summary 154
Glossary 156Means of communication 158
Colophon 160
List of subsidiaries, associated companies and other interests Inside coverContact Outside cover
Royal Ten Cate
Annual Report 2013
. A summary of this annual report is
available as a printed Annual Review
through [email protected]
. An interactive digital version
of this report is available at
www.tencateannualreports.com
A legal overview of operating
companies, associated companies
and other interests can be found on
the inside of the back flap.
2 | TenCate annual report 2013 | KEy dEVElOpMEnTS In 2013
Decrease in results of Geosynthetics & Grass sector■■ EBITA of the Geosynthetics & Grass sector declined by 11% to
€ 27.9 million, mainly due to a weak performance in the TenCate
Geosynthetics market group in Asia and high initial marketing costs
and volatile raw material costs in the Grass group.
Strong improvement in profitability of Other Activities■■ EBITA of Other Activities (Xennia Technology, TenCate Enbi and
Holding & Services) improved to –€ 0.5 million (2012: –€ 4.9 million).
The improved profitability was mainly attributable to lower costs at
Xennia Technology combined with a higher gross margin as a result
of the strategic reorientation.
Revenues declined by 4% to € 1,012 million■■ The decline in revenues was once again concentrated in the
American and European defence markets. This was mainly due to
the tightening of defence policy in the United States, with US
troops being withdrawn from foreign war zones at an accelerated
pace. ■■ Revenues outside government-related markets grew positively.
The proportion of revenues generated in the private market
increased to 53% (2012: 47%).
Operating result before amortisation (EBITA) € 48.7 million
(2012: € 50.1 million); net profit € 19.0 million (2012: € 20.9 million)■■ The decrease in revenues in the defence market had a major effect
on the operating result before amortisation (EBITA). Cost control
measures mitigated the decline in profit somewhat, as a result of
which the organic decline in EBITA compared to 2012 was limited
to 3%.■■ non-recurring costs had less impact than in the previous year.
non-recurring costs amounted to € 5.9 million (2012: € 8.0 million),
mainly due to writedowns of inventories in TenCate protective
Fabrics, which took place predominantly in the second half of the
year. ■■ The normalised operating result (EBITA) in 2013 amounted to € 54.6
million (–6% compared to 2012).■■ EBIT remained unchanged compared to 2012 at € 35.6 million.■■ The 2013 net profit amounted to € 19.0 million (2012: € 20.9 million).■■ net interest-bearing debt decreased by € 41 million in 2013 to
€ 189 million, with a debt ratio of 2.27 (2012: 2.55).
Lower revenues in defence market affect profitability of
Advanced Textiles & Composites sector■■ EBITA of the Advanced Textiles & Composites sector declined by
9% to € 21.3 million due to the sharp fall (–40%) in defence-related
revenues.
Key developments in 2013
3TenCate annual report 2013 | ASSESSMEnT OF 2013 ACTIOn plAnS |
Developments in emerging geographic markets■■ Revenue growth in new geographic markets slowed, partly due to
declining economic growth in the markets concerned. TenCate
continues to see opportunities in markets such as South America
and China.■■ TenCate critically assesses partnerships in emerging markets.
particular care is exercised in the protection of patents and process
knowledge. ■■ Further steps were taken in China in collaboration with aviation
industry research establishments for the promising development of
thermoplastic composites in the new aircraft by Caiga and Comac.
However, this is a long-term development. At the beginning of 2014
a marketing and development agreement was signed with
Shanghai leadgo-tech to support the market for composites for the
Chinese aviation industry.
Further revenue growth in composites■■ Amber Composites (UK) was acquired at the beginning of 2013,
giving TenCate accelerated access to the market for automotive
composites (thermoset). ■■ Although revenues in the automotive market are still not
significant, a number of interesting development projects
(demonstrators) were initiated. The first revenues were generated
in the Formula 1 and sports car market segment. Some of the
developments are of a long-term nature.■■ Outside the space and aerospace market, materials were
developed with partners, including for the electronics and oil and
gas industries (pipelines).
Start of production based on digital inkjet technology at TenCate Protective & Outdoor Fabrics
■■ The first production printer came off the line in mid-2013. This
process was developed specifically for the outdoor market. The
first production trials took place successfully. Customer-specific
products are being launched at the beginning of 2014. The primary
advantage of this new process technology is that customer-specific
production runs can be offered with very short lead times. It also
allows the manufacture of products which cannot be produced
industrially using analogue technology.
Assessment of 2013 action plans
Increased importance of marketing■■ TenCate intensified its activities in the field of marketing and sales.
This was particularly the case in TenCate Grass. new synthetic turf
systems were successfully introduced. The creation of new
standards for quality and sustainability in global market
developments is immensely important. There was also increased
marketing and sales activity in the worldwide Water & Environment
business unit of the Geosynthetics group, which led to revenue
growth in this segment.■■ Attention was devoted to upgrades of websites and the rollout of
digital media in various market groups.
Focus on successful market niches and partnerships■■ Growth was achieved in the leading brands operated by TenCate
(TenCate Geotube®, TenCate Tecasafe™ plus, TenCate Cetex® etc.).
TenCate gave greater focus to the product portfolio and adjusted
its marketing efforts accordingly.■■ partnerships, most of which are still in the initial phase, developed
positively. This had a strong impact on the desired positioning in
various markets, providing a positive basis for future revenue
growth.■■ In September a long-term agreement was concluded with US Army
Research, development and Engineering Command (RdECOM) for
collaboration and development of the TenCate ABdS™ active blast
countermeasure system.
Continuing profit recovery at TenCate Grass■■ The ambitions in the Grass group were only partly fulfilled.
Component production (upstream) recorded growth in results,
while the downstream activities recorded a decrease, partly due to
a steep rise in marketing and promotion costs. The integration of
the downstream activities had a positive effect on the cost level.■■ The market climate, with a continuing deterioration of profit
margins, provided no support for ambitions in this area. profitability
is under continuing pressure across the entire sector, particularly in
geographic markets with low quality awareness.
Continuing focus on sustainable cost savings■■ Control of costs and working capital proved effective. The number
of FTEs was reduced by 198 in 2013 in order to adapt the cost base
– of TenCate protective Fabrics among others – to the decrease in
(defence-related) revenues. TenCate intends to keep the cost base
at a structurally low level. Cost control therefore remains high on
the agenda.
4 | TenCate annual report 2013 | KEy dATA 2013
Key data 2013
1,200
900
600
300
02008 2009 2010 2011 2012 2013
– 4% € 1,012.0 mln
REVEnUES
120
90
60
30
02008 2009 2010 2011 2012 2013
– 3% € 48.7 mln
EBITA
60
45
30
15
02008 2009 2010 2011 2012 2013
– 9% € 19.0 mln
nET RESUlT
1.2
0.9
0.6
0.3
02008 2009 2010 2011 2012 2013
0% 0.50
dIVIdEnd pER SHARE (In € )
2.4
1.8
1.2
0.6
02008 2009 2010 2011 2012 2013
– 11% 0.72
nET EARnInGS pER SHARE (In € )
– 7%
€ 517.8 mln
€ 66.4 mln
€ 427.8 mln
0%
– 5%
42%
51%
7%
Advanced Textiles& Composites
Geosynthetics & Grass
Other activities
22%
3,320
936
78%
22%
78%Female
MaleBREAKdOWn OF EMplOyEES
4,800
3,600
2,400
1,200
02008 2009 2010 2011 2012 2013
– 4% 4,256
EMplOyEES
REVEnUE BREAKdOWn By SECTOR
– 9%
€ 27.9 mln
– € 0.5 mln
€ 21.3 mln
– 11%
44%
57%
–1%
Advanced Textiles& Composites
Geosynthetics & Grass
Other activities
EBITA By SECTOR
5TenCate annual report 2013 | KEy dATA 2013 |
TenCate has its own production sites (■) and sales offices (■) in the following countries:
Americas
NORTH AMERICAUnited StatesCanada
SOUTH AMERICABrazil
EMEA
EUROPEAustria Belgium Czech Republic DenmarkFrance GermanyHongary IrelandItaly NetherlandsPoland RomaniaSpain SwitzerlandUnited Kingdom
AFRICA BeninSouth-Africa
MIDDLE EASTDubai
AsiaPacific
ASIAChina IndiaMalaysia SingaporeThailand South Korea
OCEANIAAustraliaNew Zealand
Production and SalesSales
Geographic spread of revenues in 2013
41% 44% 1,595
By destination
By origin
Employees
43% 47% 1,726
11% 7% 859
NORTH AMERICA
SOUTH AMERICA PACIFIC
EMEA ASIA
3% 0% 0
2% 2% 76
6 | TenCate annual report 2013 | KEy dATA 2013
PROFIT AND LOSS ACCOUNT 2012* 2013
Revenues 1,049.0 1,012.0
Operating result before depreciation and amortisation (EBITdA) 87.2 83.5
Operating result before amortisation (EBITA) 50.1 48.7
normalised operating result before amortisation (EBITA) 58.1 54.6
Operating result before amortisation as % of revenues 4.8% 4.8%
Operating result (EBIT) 35.6 35.6
net result 20.9 19.0
normalised net result 26.2 23.2
CONSOLIDATED BALANCE SHEET AND RETURN
net invested capital (year-end) 750.5 708.4
Return (EBITA) on average net invested capital 6.2% 6.4%
net interest-bearing debt (year-end) 229.9 189.2
CONSOLIDATED CASH FLOW
Cash flow from operating activities 101.8 75.1
Cash flow from investing activities – 33.4 – 32.5
Cash flow from operating and investing activities 68.4 42.6
DEBT RATIO
net debt / EBITdA ratio 2.55 2.27
SHARES IN ISSUE (X 1,000)
number of shares in issue at year-end 26,498 26,791
Weighted average number of shares in issue (before dilution) 25,895 26,225
Weighted average number of shares in issue (after dilution) 26,040 26,366
PER-SHARE DATA
net result 0.81 0.72
diluted net result 0.80 0.72
dividend 0.50 0.50
Equity 17.25 17.70
EMPLOYEES
number of staff years at year-end ** 4,454 4,256
– of which in the netherlands 795 774
* Adjusted for accounting policy change pensions.
** Excluding temporary personnel.
(in millions of euros unless stated otherwise)
Key figures 2013
7TenCate annual report 2013 | THE TEnCATE SHARE |
The decrease in the debt position and a rise in the results in the third
quarter of 2013 also had a positive effect on the share price.
The highest share price was recorded in november 2013, at € 23.95.
The TenCate share ended the year at a price of € 22.90, representing a
rise of 15% compared to the starting price of € 19.87. With the
inclusion of dividends, TenCate shareholders earned a return of 18% in
2013.
The total volume of trading in the share on nySE Euronext Amsterdam
in 2013 was 8% lower than in 2012.
GENERAL INFORMATIONThe TenCate share is listed on nySE Euronext Amsterdam and forms
part of the Amsterdam AMX index. The weighting of the share in the
AMX index on 31 december 2013 amounted to 2.04%. TenCate has
been listed as an option fund on nySE life in Amsterdam since 2011.
The TenCate share is also traded on the Chi-X, Equiduct, Turqoise and
BATS alternative exchanges. In 2013 over 80% of the shares were
traded on nySE Euronext Amsterdam. The share is followed by
analysts in leading banks and securities houses in the netherlands and
Belgium.
SHARE PRICE PERFORMANCE IN 2013The equity markets in Europe staged a recovery in 2013 due to an
easing of tensions in the eurozone. The TenCate share initially
underperformed the AMX and MSCI Europe indices due to TenCate’s
high proportion of government-related revenues and continuing cuts
by the US Ministry of defence.
The recovery in the TenCate share price began in September after the
publication of a number of positive reports concerning, among other
things, the long-term CRAdA contract with the US Army RdECOM for
the TenCate ABdS™ active blast countermeasure system and the
collaboration with various parties of strategic/commercial relevance.
The positive price performance was coupled with relatively high
trading volumes, with over two million shares traded in September,
equivalent to 9% of the total number of shares in issue.
The TenCate share
VOlUME OF TRAdInG In TEnCATE SHARES
0
650
1,300
1,950
2,600
January2013
June December
number of shares x 1,000
AMX
MSCI Europe
KTC
30.0
22.5
15.0
7.5
0.0
–7.5
–15.0January February March April May June July August September October November December
2013AMXKTC MSCI Europe
DATA PER SHARE; IN %
Source: nySE Euronext ISIn code: NL 0000375731 Reuters code: NTCN.AS Bloomberg code: KTC.NA
8 | TenCate annual report 2013 | THE TEnCATE SHARE
. The TenCate share
The majority of the institutional shareholders are based in the
netherlands. The proportion of shares held in the United States and
the United Kingdom decreased compared to 2012.
COMMUNICATION POLICYTenCate participated actively in roadshows and investor conferences
in Europe in 2013. Having regard to its transparency objective, TenCate
sets great store by intensive dialogue with analysts, shareholders and
potential shareholders. A Capital Markets day was held in november
at the production site in primarette, France. Analysts and shareholders
were informed in particular about the activities of TenCate Advanced
Armour EMEA and TenCate Grass EMEA.
Background information and details of the various strategic themes
are provided in TenCate’s txtures magazine, on the company’s website
and in the updated IR app.
DIVIDEND POLICY AND PROPOSED DIVIDENDTenCate pursues a balanced dividend policy in which a decrease in
profit, such as that which occurred in 2013, is reflected to a somewhat
muted extent in the change in dividend. The dividend policy is based
on a distribution rate of 40%. An optional dividend is usually offered.
In 2013, 60% of shareholders opted to receive a cash dividend.
Having regard to the current results, a dividend pay-out ratio of 69% is
proposed. 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.
NUMBER OF SHARES IN ISSUE
number of shares in issue on 31 december 2012 26,497,666
Increase in share capital as a result of
stock dividend 293,701
number of shares in issue on 31 december 2013 26,791,367
CHANGES IN THE NUMBER OF SHARES
IN ISSUE 2012 2013
par value € 2.50 € 2.50
lowest price € 16.66 € 17.15
Highest price € 26.30 € 23.95
Average price € 20.81 € 19.74
Closing price € 19.87 € 22.90
Earnings per share € 0.81 € 0.72
dividend per share € 0.50 € 0.50
DISCLOSURE OF MAJOR HOLDINGS IN LISTED COMPANIES ACTThe 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 3%. There are no known holdings in the AFM register
of short positions.
name Date of disclosure Percentage
norges Bank 31 december 2013 3.07%
Allianz Global Investors Europe
GmbH 15 november 2013 4.99%
delta lloyd n.V. 6 May 2011 5.67%
delta lloyd deelnemingen
Fonds n.V. 22 June 2010 10.16%
Kempen Oranje participaties n.V. 1 January 2010 6.34%
GEOGRApHIC SpREAd OF InSTITUTIOnAl SHAREHOldInGS
(Source: lionShare, 31 december 2013)
The Netherlands
Germany
United States
United Kingdom
Norway
Belgium
Switzerland
Other
1%3%
61%
7%
7%
11%
7%
3%
2013
9TenCate annual report 2013 | THE TEnCATE SHARE |
OPTION PLAN, SHAREHOLDINGS OF PERSONNEL AND EXECUTIVE BOARDdetails of the option plan and the shareholdings of managers and
members of the Executive Board can be found on page 146 of this
report. The shares repurchased by the company relate to the hedging
of granted options.
IMPORTANT DATES IN 2014
publication of 2013 full-year figures 27 February
publication of 2013 annual report 5 March
Annual General Meeting of Shareholders 17 April
Ex-dividend date 23 April
Record date: determination of dividend
entitlements 25 April
Option period for cash or stock dividend 28 April to 9 May
publication of trading update for first
quarter of 2014 28 April
Announcement of conversion ratio 12 May
payment of dividend / delivery of shares (stock) 14 May
publication of 2014 half-year figures 24 July
publication of trading update for third
quarter of 2014 24 October
Capital Markets Day
TenCate held a Capital Markets day at its production
site in primarette, France, on 20 november.
Analysts and shareholders were informed in
particular about the activities of TenCate Advanced
Armour EMEA and TenCate Grass EMEA.
presentations were given by loek de Vries
(president and CEO of TenCate), Steen Tanderup
(Managing director of TenCate Advanced Armour
EMEA and ApAC) and Ton Raaphorst (Managing
director of TenCate Grass EMEA). Visitors were
also given a tour of the production site, in which
composites and ceramics are produced for aerospace
armour applications and personal ballistic protection.
10 | TenCate annual report 2013 | FOREWORd By THE CHAIRMAn OF THE EXECUTIVE BOARd
dear stakeholders,
As expected, 2013 was a challenging year for TenCate. Revenues and
results were under pressure throughout the year. The 2013 financial
year was marked by sluggish government markets due to tight budget
policies. This led to a decrease in market potential and uncertainty
surrounding government orders which were already in the pipeline.
This made it difficult to plan production and financing adequately. It
was inevitable that some revenue generation was postponed and
certain developments took longer than expected to materialise.
For many years, government-related markets such as defence and
infrastructure had developed in a reliable and fairly predictable way
for TenCate. That has changed in recent times. Situations widely
viewed as impossible, including a complete freeze and reduction of all
government spending, as occurred in the United States, had a major
impact on TenCate’s financial development in 2013.
In response to events in the markets in which TenCate operates, the
company maintained a restrained financial policy. This was
characterised by low investments in tangible fixed assets, cost control
and debt reduction aimed at keeping the risk profile as low as possible.
The intensification of internal and external collaboration announced in
2012 was further developed. Companies must adapt ever more rapidly
to market dynamics: not only to the new reality, but also to fast-
changing demands of markets and technological and other
developments which offer new opportunities. By working together it is
possible to share costs and mobilise knowledge faster.
DEVELOPMENTS IN THE DEFENCE MARKETMeasured over the last ten years, defence spending in Europe reached
a low point. discussions in the United States on the government
budget had a paralysing effect on expenditure. The decline in
TenCate’s revenues was caused predominantly by the drop-off in
defence orders in the TenCate protective Fabrics (TenCate defender™
M) and TenCate Advanced Armour (vehicle armour) market groups.
Vehicle armour remains an attractive market for TenCate, in view of
the many specialisations which have been brought together within the
company. The development of the TenCate ABdS™ active blast
countermeasure system is also expected to give further impetus to
these and other activities of TenCate in the armour market in the
future.
NON-GOVERNMENT MARKETSOne of the most successful markets for TenCate is the aerospace
market. The synthetic turf businesses and other activities focused on
industrial end-markets also developed positively. TenCate is actively
pursuing the development of new markets, such as automotive
composites.
TenCate also endeavoured to develop the ‘protecting people’ theme
outside the defence market. This aim is reflected in new concepts for
the police and other emergency services (law enforcement). Success
in these new markets, usually involving new materials, nevertheless
requires time.
SUSTAINABLE INNOVATIONTenCate’s innovation policy is focused on ground-breaking
technological developments which can create new standards. This
process usually takes a number of years. The intended result is that
TenCate develops a tenable technology position, usually supported by
patents, allowing long-term revenue growth.
The focal points in the development of new product-market-technology
combinations are:■■ digital printing and finishing technologies■■ Innovative synthetic turf systems■■ Automotive composites■■ TenCate ABdS™ active blast countermeasure system
Major strides were made in all these developments in 2013. TenCate is
therefore developing dynamically, even amid less favourable market
conditions. Innovation is nevertheless a long-term process that is
focused on long-term growth.
Foreword by the Chairman of the Executive Board
11TenCate annual report 2013 | FOREWORd By THE CHAIRMAn OF THE EXECUTIVE BOARd |
REPORTINGFor reporting and positioning purposes, a sharper focus was applied
both to the company’s identity (around the theme of protecting people)
and to the market approach. The market is increasingly being
approached on the basis of geographic regions (continent-based
management). Continuing integration is also taking place in the
Advanced Textiles & Composites and Geosynthetics & Grass sectors.
The theme of sustainability is high on the agenda in TenCate’s
development, positioning and reporting. new materials often have
favourable environmental effects, such as a reduction in the CO2
footprint. In practice, this can be a key driver in demand for high-
quality functional materials. Good examples are automotive
composites and various geotextiles.
ORGANISATION AND EMPLOYEESThe current market dynamics and changing organisational approach
also require the necessary flexibility from employees. The more
market-oriented approach was also a factor in the demand for high-
calibre employees capable of thinking in terms of solutions and
prepared to collaborate both internally and externally and work in
teams.
I would like to thank all employees for the additional commitment they
have demonstrated in less favourable circumstances.
l. de Vries, president and CEO
12 | TenCate annual report 2013 | pEOplE plAnET pROFIT
People Planet Profit
25% more training hours for
TenCate employees
100% recyclable GreenFields® MX woven synthetic turf system
53%composites in the Airbus A350,
including thousands of TenCate Cetex® clips
TenCate focuses on the sustainable protection of people and their working and living environments
13TenCate annual report 2013 | pEOplE plAnET pROFIT |
14%less CO2 emitted by
TenCate than a year ago
9 Highly Protected Risk
Awards from FM Global for TenCate
15% weight reduction in
helicopter tailplane using TenCate Cetex® technology
TenCate focuses on the sustainable protection of people and their working and living environments
14 | TenCate annual report 2013 | pEOplE plAnET pROFIT
Protecting people in transit
As a textile technology group, TenCate focuses on ‘protecting people’:
creating sustainable solutions to protect people in their working and
living environments. On the basis of the six end-markets in which
TenCate operates, four areas of application have been defined:
In Transit (mobility), In Habitats (infrastructure, water management),
At Work (personal protection, defence) and during leisure (sport and
leisure). TenCate focuses particularly on the production of materials
intended to fulfil specific characteristics based on industry standards,
laws and regulations, safety standards and the requirements of
particular target groups. TenCate’s materials usually form an essential
part of an end-product or overall solution.
We live in a society that involves risk. The world has a growing need
for better and sustainable protection against numerous threats,
regardless of whether they have a natural or human origin. TenCate
aims to occupy a leading position in the development, production and
supply of sustainable protective solutions, for which the company has
a broad technological base. TenCate employees around the world
make the difference in the development and production of protective
solutions.
In addition to the core theme of personal safety and physical
protection, the features incorporated in the production of materials
are weight reduction, fuel conservation, noise reduction,
environmental protection, reuse and recyclability. TenCate’s
knowledge of material technology enables it to provide solutions
jointly with end-users and industry partners.
MOBILITYIn the field of mobility, the areas of application lie particularly in the
aerospace market. With its wide portfolio of composites, TenCate has
gained a strong position particularly in the aviation and space
industries. Composites are increasingly used in components of the
secondary structure and interiors of aircraft and helicopters. Safety is
essential in aerospace materials.
On the basis of the expertise and experience gained with composites,
TenCate has continued to develop this material. This has resulted in
composites for other applications, particularly armour, based on bullet-
and fragment-resistant plate material in army vehicles, aircraft,
helicopters and ships. This development has led to the establishment
of TenCate Advanced Armour as an independent market group within
the Advanced Textiles & Composites sector.
Within automotive composites TenCate focuses mainly on vehicle
components which affect the safety and structure. High demands are
made on these materials.
For applications in mobility (automotive industry), TenCate operates in
a number of innovation networks in which it contributes its own
specific knowledge, know-how and experience. The company also
collaborates with numerous universities, colleges and institutions. In
open innovation, TenCate works on primary structural components of
thermoplastic composites. Examples of knowledge networks are the
Thermoplastic Affordable primary Aircraft Structures consortium
(TApAS), the Thermoplastic composite Research Centre (TpRC), the
Advanced Manufacturing Research Centre (AMRC) and the
Aachener Zentrum für Integrativen leichtbau (AZl).
pROTECTInG pEOplE In TRAnSIT
Mobility continues to grow apace. Increasing prosperity is
making people worldwide more mobile and giving rise to
increased transportation of goods and raw materials within and
between continents, and even to extraterrestrial destinations.
Making those transport movements increasingly efficient,
safe and sustainable is a challenge in itself.
The use of advanced materials in areas such as aerospace,
the automotive industry, transport and infrastructure works
and structures offers protective and environmentally
conscious solutions for the long term.
15TenCate annual report 2013 | BUSInESS OVERVIEW |
Business overview provides a detailed explanation of why TenCate does what it does, how it does it and what it does
Business overview 16
Strategic objectives 17
Business model and value creation 18
Strategic objectives and progress 23
Indicators 24
Sectors 32
Corporate information 41
BUSINESS OVERVIEW
16 | TenCate annual report 2013 | BUSInESS OVERVIEW
TenCate is a multinational company that combines textile technology
with chemical process technology in the development and production
of high-quality materials, modules and systems. TenCate specialises in
materials engineering and is a world market leader in the field of
technical textiles. TenCate increasingly offers total solutions,
independently or in co-operation with partners. The company is
subdivided into two main sectors: Advanced Textiles & Composites
and Geosynthetics & Grass.
VISIONTenCate’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 cater optimally to
the individual market requirements in the chosen market themes of
safety and protection of man and the environment.
MISSION TenCate strives for leadership in solutions for personal protection and
protection of working and living environments: protecting people with
textile technology-based materials which make the difference. Safety
and protection of people and their working and living environments are
worldwide growth markets. developing the right product portfolio,
tailored to specific market requirements, drawing attention to
solutions in an effective way and incorporating the control of safety
risks in specifications are key parts of the way in which TenCate fulfils
its mission.
TenCate operates principally within six end-markets which have been
derived from the worldwide trends of safety and sustainability. These
end-markets are personal protection, defence, mobility, infrastructure,
water management and sport & leisure. The materials, modules and
systems developed on the basis of these end-markets have specific
characteristics. These characteristics are usually defined and qualified
on the basis of functional specifications.
STRATEGYTenCate’s strategy is based on value chain management. The
cornerstones of this business model are end-user marketing,
technological innovation, cost leadership and product differentiation
(see page 20). This model 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 focuses
primarily on markets requiring products that meet high functional
demands.
The use of network structures with partners in the value chain adds a
new dimension to the business model. The aim is to improve access to
markets and strengthen the competitive position.
Business overview
DURING LEISURE IN TRANSIT
AT WORK
IN HABITATS
PROTECTING PEOPLE
17TenCate annual report 2013 | BUSInESS OVERVIEW |
Strategic objectives
Quantitative strategic objectives are:■■ The net invested capital must generate a sufficient return. The
operating result before amortisation as a percentage of average
net invested capital must be at least 15%.■■ The financial position must be sufficiently solid. The ratio of net
interest-bearing debt to the operating result before depreciation
and amortisation (EBITdA) must be structurally lower than 2.5. ■■ The target of 10% annual profit growth is based on EBITA
(operating result before amortisation). This target has not been met
in the last few years. The objective nevertheless remains to
achieve long-term profit growth averaging 10% per year. To this
end, the buy & build strategy will be pursued. An increase in added
value and efficiency is also necessary, since the organic growth of
the current core activities is expected to average less than 10% in
the years ahead. ■■ An adequate profit margin must be generated. The consolidated
EBITA margin must rise to at least 10%.
TenCate works to maintain 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 influences
the competitive position and relationships with direct customers.
STRATEGIC OBJECTIVESQualitative strategic objectives are:
■■ Creation of value for stakeholders through profitable growth based
on knowledge, expertise and internal synergy. ■■ Achievement of critical mass in product-market-technology
combinations by occupying leading positions in worldwide market
niches. ■■ Achievement of a healthy financial position with sufficient strength
for acquisitions.■■ Management of a balanced portfolio of activities, in which product-
market-technology combinations differ in terms of growth
opportunities and risk profile. ■■ Stimulation of an open, creative and enterprising culture for change
and progress.■■ Management of a global commercial organisation which thinks in
terms of customer-centric (system) solutions within the overall
value chain.■■ Acceleration of growth of the company through partnerships.
SAFETY SUSTAINABILITY
HIGH END SPECIFICATIONS
TEXTILE TECHNOLOGYBASED MATERIALS
INPUT
18 | TenCate annual report 2013 | BUSInESS OVERVIEW
Business model and value creation
Customer specifi c solutions
Cost-effi c
ient pro
duct
ion
End-
user
experience
Disruptive and sustaining technologies
HUMAN4,500 employees10% management1% corporate
FINANCIALAssetsliabilities
PRODUCTIONSolutionsServices
DIGITALdata
SOCIALCustomers End-users Suppliers Joint ventures
TECHNICALTechniques Technologies processes Qualification
INTELLECTUALIntellectual propertyBrandingCorporate identity
NATUREnatural sources Synthetic sources Other sources
CAPITAL VALUE DRIVERS
END-USER MARKETING■■ Reduction in total cost of ownership of
end-users■■ problem-solving capability ■■ System approach■■ Best in class: price-performance ratio■■ Co-creation: development with customers■■ Reliability: TenCate brand stands for
quality
PRODUCT DIFFERENTIATION■■ product portfolio: linked to specific
customer requirements■■ Time to market■■ Best in class: price-performance-
quality-service■■ Flexibility: fast adaptation to changing
demands
TECHNOLOGICAL INNOVATION■■ Broad technological base■■ Open innovation networks Knowledge
networks■■ patents and intellectual property Market-
driven innovation and■■ problem-solving capability
COST LEADERSHIP■■ Economies of scale■■ purchasing advantages■■ Availability of raw materials■■ Geographic spread of production■■ logistical advantages: close to customers■■ Recyclability
OUTPUT
19TenCate annual report 2013 | BUSInESS OVERVIEW |
IN TRANSITAerospace Automotive TransportnavalEtc.
IN HABITATSInfrastructure Water management Agriculture/Horticulture StructuresEtc.
AT WORKpersonal protection ArmourMedical Etc.
DURING LEISURESport RecreationHolidays Etc.
MATERIALS THAT MAKE A DIFFERENCE PROTECTING PEOPLE
SUSTAINABILITY AND ENVIRONMENT
Characteristics:
lightweightlong life100% recyclable ReusableEtc.
SAFETY AND PROTECTION
Characteristics:
Fire-resistantFlame-retardant Bullet-proof Fragment-proofEtc.
PROTECTIVE FABRICS
THERMOPLASTIC COMPOSITES
ANTIBALLISTIC PROTECTION MATERIALS
GEOTEXTILES
OUTDOOR FABRIC
THERMOSET COMPOSITES
SURVIVAL SYSTEMS
SYNTHETIC TURF
20 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Business model and value creation
TECHNOLOGICAL INNOVATIONInnovations at TenCate usually have a technological background, as in
the development of thermoplastic composite technology (TenCate
Cetex®) or process innovation 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®. Technological innovations are necessary to secure the
future. It is also important to develop existing products by
incorporating new technologies. TenCate strives for continuous
progress in order to accommodate or initiate new regulations and
standards.
Innovation also gives rise to development costs associated with
specifications and qualifications 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 670
patents. An up-to-date list of patents can be found on the corporate
website under Company profile.
The main value drivers for innovation are: ■■ Broad technological base■■ 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 LEADERSHIPAlthough products must have the right technical and functional
specifications, the cost aspect remains very important. In the current
economic climate in particular, with declining government budgets,
there is also high cost-awareness on the demand side.
That compels the company to remain very alert to costs, but also to
cost-efficient production, margin policy, process optimisation,
organisation of logistics flows, reduced environmental costs, etc., and
to the use of scarce resources and raw materials. TenCate also
conducts an active portfolio policy whereby the portfolio is kept
constantly under review and the product life cycle is assessed against
market requirements. By manufacturing globally and accessing
commodity markets worldwide, TenCate in principle has a good cost
VALUE CHAIN MANAGEMENT TenCate operates a business model based on value chain management.
TenCate’s business model determines how the company creates value,
establishes value in products and systems and adds value to customer-
focused system solutions. The end-user is central in this process. The
cornerstones of the business model are end-user marketing,
technological innovation, cost leadership and product differentiation.
END-USER MARKETINGEvery new product which TenCate develops must be linked with
prevailing customer demand or new national or international standards
and laws and regulations. The specifications are agreed or developed
with the customer and/or end-user at an early stage. Specific customer
demand and changing specifications can be accommodated thanks to
the acquired expertise and technological base. This is an important
competitive advantage. Higher standards can be set and progress
made by flexibly adapting decision-making units to end-markets to
take account of new technological possibilities, which can then be
included in new standards. TenCate’s products and solutions provide
functional added value in almost all cases. In some cases they can be
life-saving.
In some cases, for example in tenders, TenCate operates through its
customers. In some end-markets, therefore, its image and brand
awareness can only be assessed indirectly.
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 meet local needs,
standards and rules■■ Best in class: price-performance ratio■■ Innovation: co-creation; developing specifications jointly with
customers■■ Reliability: the TenCate brand stands for quality and functionality■■ Creation of standards: with its positioning as a specialist in its core
markets and its very broad technological base, TenCate aims to be
a foremost solution provider, partly on the strength of leading
market positions.
21TenCate annual report 2013 | BUSInESS OVERVIEW |
VALUE PROPOSITION 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 specifications which materials must fulfil. In addition
to functionality, requirements may be specified 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 specifications and standards is generally a dynamic
process to which TenCate must respond appropriately. That requires a
flexible and innovative organisation.
base and operates in close proximity to most end-markets. The
company also benefits from economies of scale because it occupies
leading positions in most core markets.
Technological innovation involving new production methods can have
a positive impact on the cost structure.
The main value drivers for cost leadership are:■■ Constant focus on process innovation■■ Market leadership and 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 DIFFERENTIATIONTenCate aims to develop an appropriate product portfolio offering
dependable solutions tailored to specific market and/or customer
requirements.
Because product life cycles are becoming shorter, TenCate has to bring
a steady flow of new products and solutions to the market. TenCate is
guided by evolving markets in which demands are ever higher, laws
change and standards become more exacting. The company adapts
characteristics or incorporates them in materials in order to create
customer-specific products and specialties.
product differentiation must increasingly be linked to end-user
marketing in order to position the overall value proposition correctly.
Greater significance 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,
usually set greater store by sustainability.
The main value drivers for product differentiation are:■■ Broad product portfolio: a good fit for specific customer
requirements■■ Relatively large number of recently developed products ■■ Best in class: price / performance■■ Relatively short time to market: ability to respond rapidly to market
demands■■ long-term experience: material specifications, databases,
qualifications, etc.
VAlUE pROpOSITIOn FOR dIGITAl TECHnOlOGy
Individualisation is a characteristic of contemporary market
requirements. Manufacturers are increasingly facing declining
production runs, make-to-order products, etc. This will lead to
an increase in the product range and will pose fresh logistical
challenges for market participants throughout the value chain.
The rise of digital media, with individual customers buying their
products on demand, will increasingly be seen as the standard.
digitisation of production processes is on the rise in many
industries. This is also a new challenge for TenCate, which
is a leader in this regard as a producer of technical textiles.
The advantages for TenCate’s direct (business-to-business)
customers is that reaction times to market trends can be
shortened considerably and inventory levels can be reduced
throughout the value chain. On this basis market participants
can anticipate individual customer requirements with much
greater immediacy. new characteristics can also be added
to materials, opening up new markets.
22 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Business model and value creation
CORPORATE VALUESTenCate 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 in which 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■■ Efficient: 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■■ Co-operation: 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.
23TenCate annual report 2013 | BUSInESS OVERVIEW |
Strategic objectives and progress
0 Strategic objectives 2013 target 2013 progress 2014 target Priorities
PEO
PLE
TenCate aims for a male-female ratio at management level (and in management bodies) that is comparable to that of the rest of the workforce (75%-25%), as an indicator of equal opportunities.
The target for the male-female ratio at management level in 2013 was 80%-20% (2012: 80%-20%).
The male-female ratio at management level in 2013 was 82%-18%.
The target for the male-female ratio at management level in 2014 is 80%-20% (2013: 82%-18%).
Where equally suitable, female candidates will be proposed for appointment to management bodies, management posts and the rest of the workforce.
TenCate aims to increase the number of training hours.
The target in 2013 was for the number of training hours to rise to 16 (2012: 14 hours).
The number of training hours in 2013 was 16.
The target in 2014 is for the number of training hours to rise to 17 (2013: 16 hours).
Achieving more training hours, partly through executive policies of training experts and HR departments.
TenCate aims for optimum occupational health and safety targeted at permanent prevention of fatal and non-fatal industrial accidents and safety incidents.
The target for the number of fatal industrial accidents in 2013 was zero. The aim was for the ratio of days of absence due to non-fatal industrial accidents to fall to 35.0 per 100 FTEs in 2013 (2012: 48.9 per 100 FTEs).
The number of fatal industrial accidents in 2013 was zero. There were 33.0 days of absence due to non-fatal industrial accidents per hundred FTEs in 2013.
The target for the number of fatal industrial accidents in 2014 is zero. The aim is for the ratio of days of absence due to non-fatal industrial accidents to fall to 25.0 per 100 FTEs in 2014 (2013: 33.0 per 100 FTEs).
Increase of at least 3 in the number of TenCate production facilities having received the Highly protected Risk Award from FM Global (2013: 9 sites).
PLA
NET
TenCate aims to increase the proportion of renewable electricity worldwide.
The target in 2013 was to raise the proportion of renewable electricity by 3% (2012: 2.6%).
The proportion of renewable electricity rose by 15.2% in 2013.
The target in 2014 is to raise the proportion of renewable electricity by 3% (2013: 15.2%).
Increased use of renewable electricity at production sites worldwide.
TenCate aims to increase energy efficiency worldwide, leading to a steady fall in CO2 emissions.
The target in 2013 was to increase the energy efficiency of production sites by 1% (2012: 1%).
Energy efficiency worldwide rose by 1% in 2013. In the netherlands, the rise in energy efficiency in 2013 was 2%.
The target in 2014 is to increase the energy efficiency of production sites by 1% (2013: 1%).
pursuit of energy-saving measures at production sites worldwide. Buying more energy- efficient plant and equipment at times of replacement.
TenCate aims to reduce or at least maintain the existing level of total water consumption (on like-for-like revenues).
The target in 2013 was to reduce water consumption at production sites to 2.9 million m3 (2012: 3.5 million m3).
Water consumption worldwide in 2013 was 2.9 million m3.
The target in 2014 is for water consumption at production sites to be at or below 3.0 million m3 (2013: 2.9 million m3).
Increase in digital finishing and printing of outdoor fabrics (UV curing) and any other substrates. Implementation of existing water conservation programmes.
TenCate aims for a worldwide reduction in the amount of waste released during production processes (on like-for-like revenues).
The target in 2013 was for the amount of waste from production processes to fall to 13 kilotons (2012: 14 kilotons).
The amount of waste in 2013 was 13 kilotons.
The target in 2014 is an amount of waste from production processes of 13 kilotons or less (2013: 13 kilotons).
Introduction of the 5S methodology at a number of production sites worldwide. More internal recycling of scrap.
PRO
FIT
TenCate aims to maintain a sufficiently solid financial position.
TenCate aims for a ratio of net interest-bearing debt to EBITdA of less than 2.5 over the long term (2012: 2.55).
The debt ratio at the end of 2013 was 2.27.
TenCate aims for a ratio of net interest-bearing debt to EBITdA of less than 2.5 over the long term (2013: 2.27).
TenCate will control the risk profile by pursuing a restrained financial policy.
TenCate aims for a sufficient return on net invested capital.
TenCate aims for EBITA as a percentage of average net invested capital of at least 15% over the long term (2012: 6.2%).
EBITA as a percentage of average net invested capital was 6.4% in 2013.
TenCate aims for EBITA as a percentage of average net invested capital of at least 15% over the long term (2013: 6.4%).
High-quality / innovative technological development and internal synergy.
Management of a balanced portfolio of activities with product-market-technology combinations in different phases of the production life cycle.
Acceleration of growth of the company through partnerships.
Attaining critical mass in product-market-technology combinations by occupying leading positions in global market niches.
TenCate aims for sustainable profit growth.
TenCate aims for average EBITA growth of 10% per year over the long term.
Reported EBITA declined by 3% in 2013.
TenCate aims for average EBITA growth of 10% per year over the long term.
TenCate aims for an adequate profit margin.
TenCate aims for an EBITA margin of at least 10% over the long term (2012: 4.8%).
The consolidated EBITA margin in 2013 was 4.8%.
TenCate aims for an EBITA margin of at least 10% over the long term (2013: 4.8%).
24 | TenCate annual report 2013 | BUSInESS OVERVIEW
Indicators
COST LEADERSHIPThe principal indicators include:
■■ production■■ Costs per unit/hour■■ Turnaround time in days■■ First-time-right percentage■■ Use of raw materials, water and 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
PRODUCT DIFFERENTIATIONThe principal indicators include:
■■ number of new product-market-technology combinations■■ Quantitative and qualitative portfolio growth■■ net present value of the product portfolio■■ number of extensions of product life cycles
Key performance indicators (KpIs) are the factors and aspects of
business operations that affect the performance and hence the value
of the company.
TenCate draws a distinction between general and specific indicators.
A number of general indicators are periodically assessed against the
cornerstones of TenCate’s business model. Specific corporate social
responsibility indicators have been defined at corporate level on the
basis of the guidelines of the Global Reporting Initiative (GRI). These
KpIs indicate TenCate’s worldwide position with regard to social,
ecological and economic aspects of corporate social responsibility.
Brief details of a number of key indicators are provided below. The
indicators collectively contribute to the company’s value chain
management.
GENERAL INDICATORS
END-USER MARKETINGImportant indicators include:
■■ Customer satisfaction■■ Market share■■ Sale volume■■ Customer retention (share of wallet)■■ number of complaints and complaint handling■■ Brand recognition and image
TECHNOLOGICAL INNOVATIONThe principal indicators include:
■■ number of patents■■ number of trademark registrations and countries of registration■■ Completion of process innovation projects■■ Creation of new standards in niche markets■■ number of innovation networks in which TenCate operates
TenCate business model © TenCate
VALUE CHAIN MANAGEMENT INTERNALEXTERNAL
portfoliomanagement
processmanagement
marketmanagement
END-USER MARKETING
market
product
technology
process
DIFFERENTIATION
INNOVATION
COST LEADER
businessdevelopment
25TenCate annual report 2013 | BUSInESS OVERVIEW |
TARGETSCorporate social responsibility is implemented by the line management
within the stated policy frameworks. This is actively co-ordinated and
supported at corporate level through the provision of tools that enable
these activities to be maintained, measured and presented as
transparently as possible.
Once again in 2013, all market groups within TenCate received detailed
feedback on reporting business units worldwide by means of CSR fact
sheets, for both full-year 2012 and the first half of 2013. This combined
information indicates the performance relative to comparable business
units within the Group and provides a basis on which the local
management can formulate CSR improvement plans and any corporate
and other targets for the current financial year.
Since 2012, the market group units which were certified in accordance
with the CSR performance ladder (level 3) have already formulated
their own, similar or related targets, including for the nine reported
KpIs.
TenCate took major steps in 2013 aimed at the further development
and measurability of corporate social responsibility. This process will
continue in the years ahead, partly through the definition and
adjustment of new and existing CSR targets.
SPECIFIC INDICATORS (CSR)The principal and most material CSR themes were determined and key
performance indicators (KpIs) were defined at corporate level at the
beginning of 2012, on the basis of the guidelines of Global Reporting
Initiative 3. These KpIs reflect TenCate’s performance with regard to
social, ecological and economic aspects of corporate social
responsibility. Worldwide CSR data have been gathered, validated,
aggregated and analysed at corporate level every six months since
2012. The CSR data for 2011 are included here as a baseline. This
section reports on the specific indicators relating to the 2013 reporting
year. As in the case of the 2012 data, these comply with TenCate’s
accuracy criteria. The data quality and relevant processes were further
improved in 2013. A corporate CSR controller has joined the corporate
CSR team in order to continue the gathering, analysis, aggregation and
validation of the CSR data and deepen or broaden the data as
necessary. The business units in the downstream activities of TenCate
Grass (very limited in-house production) and the activities of TenCate
Enbi and Xennia Technology have not been included in the
measurements. data for the Thailand business unit also ceased to be
included in the CSR figures for 2013, because it was closed during the
reporting year. The CSR information for Amber Composites, which was
acquired at the beginning of 2013, was also excluded from the CSR
analyses for the past year, with the exception of employee data.
2012 2013
North and South AmericaEMEA
Asia Pacific
39%
20%
41%
38%
24%
38%
1 · AnAlySIS OF EMplOyEES By REGIOn In 2012 And 2013
2012 2013
90%
2% 8%
89%
2%9%
Permanent contractTemporary contractAgencycontract
2 · AnAlySIS OF EMplOyEES By COnTRACT TypE In 2012 And 2013
Male
Female
78%
22%
76%
24%
2012 2013
3 · AnAlySIS OF EMplOyEES By GEndER In 2012 And 2013
Male
Female
82%
18%
80%
20%
2012 2013
4 · AnAlySIS OF MAnAGEMEnT By GEndER In 2012 And 2013
26 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Indicators
PERSONNEL BREAKDOWNAs a multinational company, TenCate has a worldwide presence.
production sites are located on various continents. Figure 1 shows the
geographic breakdown of TenCate employees (headcount) by continent
at the end of 2013. Figure 2 shows the breakdown of employees by
contract type at the end of 2013, i.e. between permanent, temporary
and agency contracts. The breakdown of employees by region has
changed somewhat compared to 2012 as a result of the integration of
the TenCate protective Fabrics activities in Thailand into the dutch
production site. The workforces on the continents of America and
EMEA are now of equal number, partly as a result of the acquisition of
Amber Composites. The proportion of employees with agency
contracts has decreased by 1% compared to 2012 due to more cost-
effective use of production organisations.
despite its technical character, TenCate is committed to being a
company that offers sufficient scope for diversity among employees.
Figure 3 shows the composition of the workforce by gender. Almost
78% of the total number of employees are male and over 22% female.
Figure 4 shows the composition of the management of TenCate. Eight
out of 10 management personnel are male and two out of ten are
female. Both sets of percentages have changed fractionally compared
to 2012. TenCate aims to achieve a comparable male-female ratio in its
management as in the rest of its workforce, as an indicator of equal
opportunities. In the years ahead, TenCate will aim to achieve a
75%-25% male-female ratio for both its management and overall
workforce.
OCCUPATIONAL SAFETY AND WELFAREThe safety and protection of employees and their working environment
at TenCate’s production sites are a central focus of the company’s
policy. Table 5 provides an overview of occupational safety and
welfare, expressed in ratios of industrial accidents, fatal industrial
accidents, absence due to industrial accidents in days/working days,
occupational diseases and sickness absence. There were no notable
incidents in 2013.
SOCIAL ASPECTSTenCate believes that the conduct of a sustainable personnel policy
focused on the interests of the people which make up TenCate is the
most important aspect of the social dimension of enterprise. Within
this policy the following themes are the most material:
■■ personnel diversity and equal opportunities■■ Occupational safety and welfare■■ Education and training
SUSTAINABLE PERSONNEL POLICYAs a technology group, TenCate is a knowledge-intensive company.
The safety, health and knowledge of the employees are paramount.
Social innovation through investments in this human capital benefits
the company. The safety policy is implemented at production and
operating sites worldwide to promote optimum occupational health
and safety and keep safety incidents and industrial accidents to an
absolute minimum. protecting people right through to the shop floor.
GreenSource™
The Sustainable Water Fund of the Ministry of
Economic Affairs commissioned pentair, TenCate and
Wavin jointly to produce 20 sustainable drinking
water systems in South Africa. TenCate is supplying
the high-quality synthetic turf and geotextiles for this
project. This innovation is being supported by the
Advanced Materials Manufacturing Oost-nederland
(AMMOn) foundation.
27TenCate annual report 2013 | BUSInESS OVERVIEW |
TenCate aims to continue deepening and broadening its package of
technical and management training courses. The company intends to
increase the number of training hours by at least 5% annually in the
years ahead.
ECOLOGICAL ASPECTSTenCate considers the conduct of an integrated sustainability policy
focused on biodiversity and the company’s natural environment to be
the most important aspect of the ecological dimension of enterprise.
Within this policy the following themes are the most material:■■ Energy consumption and CO2 emissions■■ Water consumption and wastewater■■ Rejects and waste
SUSTAINABLE ENERGY POLICYEnergy consumption is an issue that demands greater attention
worldwide. TenCate has a sense of responsibility in this regard and
sees it as an opportunity for cost reduction and process optimisation.
Through its actions, investments and technological innovations, it
contributes to the reduction and maximum efficiency of energy
consumption. In the process, the CO2 footprint of the company is
reduced. An increase in the share of ‘green energy’ is part of the
prevailing energy policy.
ENERGY CONSUMPTIONTotal energy consumption in 2013 amounted to approximately 1,752
terajoules (TJ). This represents a decrease of 11% compared to 2012,
which was due in part to the closure of the TenCate protective Fabrics
site in Thailand. Among TenCate’s production processes, it is
particularly fabric production and the extrusion of synthetic fibres that
are the most energy-intensive. Since the beginning of 2013, over 15%
of energy consumed has come from sustainable sources, such as green
electricity. Biogas is produced at the company’s own wastewater
5 · OCCUpATIOnAl SAFETy
And WElFARE 2011 2012 2013
Industrial accidents* 1.8 2.4 1.9
Fatal industrial accidents* 0 0 0
Absence due to industrial
accidents in days/working days* 22.1 48.9 33.0
Occupational diseases* 0.03 0.00 0.15
Sickness absence* 2.1% 2.7% 3.0%* Ratio per hundred FTEs.
These figures show that industrial accidents and days of absence
decreased in 2013, returning almost to a level comparable to 2011. The
temporary rise in these figures in 2012 resulted from the setting up of
a new production process during that year at the TenCate Advanced
Armour site in newark in the United States, where a number of minor
safety incidents occurred. Immediate remedial action was taken,
which is reflected in the 2013 figures. The slightly higher sickness
absence in 2013 was due in particular to the TenCate protective
Fabrics production site in nijverdal. Measures were taken to counter
this incidental rise in sickness absence.
TenCate has focused its occupational safety and welfare policy on the
structural prevention of safety incidents and fatal or non-fatal
industrial accidents. It aims to reduce the ratio of days/working days
of absence due to industrial accidents to 20.0 in the years ahead.
EDUCATION AND TRAININGTenCate invests in the quality and skills of its employees. Education
and training are crucial for the optimum development and maintenance
of the company’s knowledge resources – and hence its competitive
strength. The company uses both external and internal on-the-job
training. In 2013, 860 employees took part in technical training courses
while 265 attended management training. Both figures represent a rise
compared to the previous year. The number of training hours per
employee has also risen by two. Figure 6 shows the ratio of internal to
external training hours. The total number of training hours increased
by 22% in 2013 compared to 2012. A training expert was appointed for
the four market groups in nijverdal at the beginning of 2013 and is
making a substantial contribution to the knowledge qualification
process.
Internal training hoursExternal training hours
79%
21%
81%
19%
2012 2013
6 · InTERnAl And EXTERnAl TRAInInG HOURS In 2012 And 2013
28 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Indicators
treatment plant and is used to produce steam for processes. Figure 7
shows the percentage breakdown of energy consumption into the
main energy sources for 2011, 2012 and 2013.
7 · ENERGY CONSUMPTION
BY ENERGY SOURCE 2011 2012 2013
Renewable electricity 2.7% 2.6% 15.2%
non-renewable electricity 51.0% 51.1% 45.2%
Biogas 0.0% 0.1% 0.1%
natural gas 33.0% 33.3% 25.8%
Steam 12.6% 12.1% 13.0%
Other sources 0.7% 0.8% 0.7%
The increase in the consumption of sustainably generated electricity
was achieved by switching the nijverdal production sites to green
electricity from 2013. TenCate Geosynthetics in linz, Austria, also
proactively increased the proportion of green electricity consumed in
2013. TenCate is aims to bring about a further increase the proportion
of renewable electricity consumed worldwide. It intends to raise this
proportion by 3% per year over the next three years.
TenCate production sites worldwide have also set a target of
improving energy efficiency by 1% per year by taking numerous
energy-saving measures. TenCate’s dutch production sites even have
an energy efficiency improvement target of approximately 2% per
year, in line with the Multi-year Energy Efficiency Agreement of the
Ministry of Economic Affairs and the Modint industry organisation on
the more effective and efficient use of energy and processes in the
textile and technical textile industry.
CO2 FOOTPRINT POLICYCO2 emissions are coupled 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
CO2 emissions, TenCate gains 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 efficiency 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. TenCate’s climate policy is
aimed primarily at reducing energy consumption through efficiency
measures, based on process management and cost leadership as part
of the TenCate business model. This is supported by the objective of a
gradual switch to renewable, sustainable energy.
CO2 EMISSIONSIn 2013 TenCate’s total CO2 emissions worldwide amounted to
approximately 152 kilotonnes. That represents a reduction of almost
22% compared to 2012. This decrease is due partly to the closure of
the TenCate protective Fabrics production site in Thailand and partly
to the substantial rise in the proportion of green electricity in the
netherlands in particular. Figure 8 shows a breakdown of CO2
emissions by energy source in 2011, 2012 and 2013. The data show
that approximately 73% of TenCate’s CO2 footprint is due to electricity
consumption. Sustainable sources, such as wind power,
hydroelectricity or solar energy now account for over 15% of electricity
consumption. This portion is therefore CO2-neutral. The bulk of CO2
emissions are attributable to the energy-intensive market groups,
namely TenCate protective & Outdoor Fabrics and TenCate Grass.
8 · CO2 EMISSIONS BY
ENERGY SOURCE 2011 2012 2013
Electricity 70.3% 71.0% 73.3%
natural gas 19.1% 18.4% 16.6%
Steam 8.4% 7.9% 6.9%
Flights 0.4% 0.6% 0.8%
Car travel 0.7% 0.8% 1.2%
Other Activities 1.1% 1.3% 1.2%
SUSTAINABLE WATER AND WASTEWATER POLICYWater consumption is a growing issue worldwide. TenCate is mindful
of this and implements measures, investments and technical
innovations aimed at reducing and optimising the efficiency of water
consumption. Water consumption is broken down by water source.
Waste processing is broken down by destination. TenCate’s water
treatment plants are an integral part of the water and wastewater
policies of the respective sites worldwide.
29TenCate annual report 2013 | BUSInESS OVERVIEW |
WATER CONSUMPTIONTotal water consumption in 2013 amounted to approximately 2.9
million cubic metres. This represents a 15.1% reduction overall
compared to 2012. This decrease is largely due to the closure of the
TenCate protective Fabrics production site in Thailand. As in 2012,
groundwater and drinking water consumption decreased in 2013, while
surface water consumption rose slightly. Figure 9 shows the
consumption of water by source.
The underlying data show that the dominant consumer of water is the
TenCate protective & Outdoor Fabrics market group, with a combined
share of water consumption of around 42%. This percentage can be
explained by the current analogue finishing process used for technical
textiles in the water-intensive processes in this market group. As a
result of the introduction of digital printing and finishing for TenCate
outdoor fabrics in mid-2013, a decrease in water consumption can be
expected for this market group.
TenCate is aiming for a further reduction in water consumed in
production processes worldwide. For the next three years, TenCate
aims to stabilise water consumption at less than 3 million cubic metres
with a comparable level of revenues.
WASTEWATERThe total volume of waste water was 2.6 million cubic metres in 2013.
This represents a decrease of 15.7% compared to 2012. This decrease
is largely due to the closure of the TenCate protective Fabrics
production site in Thailand. Figure 10 provides an overview of total
waste water by destination. Since part of the water drawn evaporates
during production or is absorbed by products, the volume of discharged
water is by definition lower than the volume of water drawn.
Groundwater
Drinking water
Surface water
37.1%
19.7%
43.2%
28.9%
18.3%
52.8%2012 2013
9 · WATER COnSUMpTIOn By SOURCE In 2012 And 2013
Synthetic turf system for Kyocera Stadium
In the space of two weeks the synthetic turf supplier
GreenFields, the synthetic turf manufacturer TenCate
and the construction company Heijmans completed
a brand-new synthetic turf system at the Kyocera
Stadium, the home venue of dutch premier league
side AdO den Haag. The synthetic turf system based
on TenCate Evolution™ fibre was laid in just two
weeks. The installation was completed swiftly and
efficiently thanks to excellent collaboration between
the three companies, the municipality of The Hague
and AdO den Haag. The construction of a roof over
the pitch means that games can also be played at
night and in poor weather. The synthetic turf system
was approved by the KnVB (Royal netherlands
Football Association) on Monday 21 October and
delivered on Wednesday 23 October. After the
2013-2014 football season GreenFields, TenCate and
Heijmans will install a GreenFields® TX synthetic turf
system in the Kyocera Stadium and in the adjacent
temporary GreenFields Stadium for the 2014 Hockey
World Cup.
Surface water
Sewage
Other
50.4%
31.8%
17.8%
40.3%
38.0%
21.7%
2012 2013
10 · WASTEWATER By dESTInATIOn In 2012 And 2013
30 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Indicators
Since 2013 TenCate has also added the volume of textile waste to the
waste separation categories. The resulting figures will appear for the
first time in the reporting for 2014.
TenCate is endeavouring to reduce the volume of waste released
during production processes worldwide. In the next three years,
TenCate aims to stabilise the volume of waste from production
processes at less than 13 kilotonnes per year with a comparable level
of revenues.
ECONOMIC ASPECTSThe economic indicators relating to TenCate’s financial performance
can be found in the other parts of the annual report and in the financial
statements for 2013. In this section TenCate reports on the critical
performance indicators with regard to sponsorship and donations
during the reporting year.
SUSTAINABLE SOCIAL POLICYTenCate has a strong commitment to society through sponsorship and
donations. Employees worldwide are actively involved in numerous
initiatives and projects. TenCate feels closely involved in the local
communities in which it operates. Every year, TenCate sponsors
various initiatives, both financially and in kind by providing materials
which the company produces. Market groups and employees also
make time or resources available for local or regional social activities.
The sponsorship and donations policy and activities in 2013 are
detailed at www.tencateannualreports.com.
SPONSORSHIP AND DONATIONSIn 2013 the contribution to social projects totalled approximately
0.15% of revenues, which represents a considerable increase
compared to 2012. This was achieved in particular through the greatly
increased involvement of TenCate Grass in the Coöperatie Eerste
divisie for professional football in the netherlands and the partnership
with the Royal netherlands Hockey Association in preparation for the
2014 Hockey World Cup. Material sponsorship also increased strongly.
Among other beneficiaries, TenCate Advanced Composites sponsored
Solar Team Twente of the University of Twente and Saxion University
of Applied Sciences. This team secured third place in the World Solar
Challenge 2013, the highest place in its history, with its REd Engine
weighing just 139 kilograms. Figure 14 provides an overview of
investments through sponsorship or donations in 2012 and 2013.
The main sponsorship in 2013 was once again Heracles Almelo.
SUSTAINABLE WASTE POLICYTenCate uses raw materials as efficiently as possible. A lower volume
of waste materials by definition 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 FLOWSAlmost 13 kilotonnes of waste were released in TenCate’s production
processes in 2013, representing a decrease of nearly 8% compared to
2012. Over 10 kilotonnes were recycled during the reporting year and
over 2.9 kilotonnes were processed externally (a decrease of 5%
compared to 2012), 830 tonnes were incinerated by the waste
processor and the remainder was sent to landfill. Figures 11, 12 and 13
provide an overview of waste by waste stream, type of waste
separation, type of recycling and method of waste processing.
Non-hazardous wasteHazardous waste
97.5%
2.5%
97.6%
2.4%
2012 2013
11 · WASTE By TypE In 2012 And 2013
Paper waste
Plastic waste
Wood waste
Organic waste
13.4%
66.5%
12.4%
7.7%15.0%
74.9%
9.9% 0.2%
2012 2013
12 · WASTE SEpARATIOn By TypE In 2012 And 2013
External recycling
Landfill
Incineration
Internal recycling
49.3%
17.9%
5.0%
27.8%
35.3%
6.4%
16.2%
42.1%
2012 2013
13 · WASTE RECyClInG And WASTE pROCESSInG In 2012 And 2013
31TenCate annual report 2013 | BUSInESS OVERVIEW |
TRANSPARENCY BENCHMARKTenCate is assessed annually as part of the transparency benchmark
of the netherlands Ministry of Economic Affairs. The aim of this
annual examination is to assess and improve the content and quality of
social reporting by dutch companies. For the 2013 Annual Report,
TenCate intends to consolidate the position it achieved that year in the
top 100, in the knowledge that the criteria have been tightened.
TenCate’s long-term aim is to secure a position in the top 50.
Transparency Benchmark of the Ministry of Economic Affairs
Year Annual Report Participants TenCate’s position TenCate’s points
2013 2012 460 82 149
2012 2011 472 141 89
2011 2010 468 150 61
2010 2009 462 146 41
2009 2008 172 78 26
In past years the company has achieved the following scores and positions in the transparency benchmark:
Sponsorship in cashSponsorship in kindDonations
85.3%
9.8%4.9%
85.6%
11%3.4%
2012 2013
14 · SpOnSORSHIp And dOnATIOnS In 2012 And 2013
(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
• 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)
PROTECTIVE FABRICS
• Distributors• PPE-dealers• Laundries
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)
FM H
PR (F
R)
MVO
PL
(NL)
FM H
PR (C
, USA
)
32 | TenCate annual report 2013 | BUSInESS OVERVIEW
Sectors
33TenCate annual report 2013 | BUSInESS OVERVIEW |
ADVANCED TEXTILES & COMPOSITESThe principal end-markets for the Advanced Textiles & Composites
sector are:■■ personal protection■■ defence■■ Mobility■■ Sport and leisure
The products’ main areas of application are the protection of military
personnel, police and process workers (heat- and flame-resistant
protection and ballistic protection), protection of personnel in industry
(process industry, oil and gas extraction) and protection of fire
brigades and police forces. TenCate is also the European market leader
in high-quality outdoor fabrics for the outdoor market.
TenCate is the market leader in the field of protective fabrics and one
of the pre-eminent suppliers of aerospace composites. Applications in
the automotive sector and other industrial sectors are also expected
to emerge over time. In both markets the strong growth in demand is
being driven mainly by the need to save fuel costs (lower emissions)
and reduce weight.
The armouring of army and other vehicles concerns land, sea and air
vehicles. The armouring of helicopters is a growing activity. TenCate
operates in this field in the European market as a supplier of the
end-product: an entirely customised, ready-to-install set of armour
components, including fixing materials. In 2013 TenCate expanded its
portfolio to include products for personal protection for the law
enforcement market.
Materials are increasingly required to meet specific demands. TenCate
usually benefits when markets specify higher standards and demand is
differentiated on the basis of specific 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
composite materials. TenCate occupies a unique position in the
composites market because it has both thermoset and thermoplastic
composites in its portfolio. TenCate has a leading position in
thermoplastic composites technology in the aircraft industry.
The automotive industry is also increasingly discovering the
advantages of thermoplastic composites. Broad application on an
industrial scale will nevertheless be a long-term development.
The raw materials used in the Advanced Textiles & Composites sector
are mainly synthetic fibres such as para- and meta-aramids, glass fibre
fabrics and carbon and aramid fibres.
MARKET GROUPSThe Advanced Textiles & Composites sector consists of four market
groups and one business unit:
■■ TenCate Protective Fabrics ■■ TenCate Outdoor Fabrics
protective and safety fabrics for a wide range of professional groups
and protective fabrics for outdoor applications.
The activities in the TenCate protective Fabrics market group are
concentrated around the production sites in the netherlands and the
United States. In the netherlands, safety fabrics are produced using
finished substrates (cotton blends as well as synthetic products). In
the United States products are manufactured with a combination of
inherently protective (artificial) fibres. TenCate therefore has a wide
range of product types for highly varied applications, each with
specific product characteristics.
■■ TenCate Advanced Composites■■ TenCate Industrial Composites ■■ TenCate Advanced Armour
Composites for aerospace and industrial applications; antiballistic
materials for personal protection, survivability solutions and vehicle
armour.
The TenCate Advanced Composites market group and the TenCate
Industrial Composites business unit are concentrated around
production sites in the United States, the United Kingdom and China
(mainly thermosets) and in the netherlands (mainly thermoplastics).
The company has a strong qualification base with a complementary
product range, as a result of close internal co-operation. For larger
customers, TenCate can be a dependable partner in the value chain by
providing a one-stop shop service.
34 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Sectors
TenCate Advanced Armour has European manufacturing sites in
France, the United Kingdom and denmark and operates as a
manufacturer in the United States. TenCate has both strong design
TENCATE PROTECTIVE & OUTDOOR FABRICS BUSINESS MODEL
END-USER MARKETING■■ Value proposition focused on specific target groups and standards■■ Increased market awareness■■ Risk awareness / safe society■■ partnerships
TECHNOLOGICAL INNOVATION■■ digital inkjet technology / ‘sustainable factory of the future’■■ Smart textiles■■ Effective use of internal knowledge (social innovation)■■ patents
PRODUCT DIFFERENTIATION■■ Global market position, with local product adaptations for local
specifications■■ Fabrics based on fibre blends and coated / finished fabrics (product
champions: distinctive in quality-performance ratio and costs)■■ Co-makership, products tailored to specific needs
COST LEADERSHIP■■ Internal production combined with outsourcing delivers flexibility■■ Economies of scale■■ process innovation■■ Cost control
TENCATE ADVANCED COMPOSITES, TENCATE INDUSTRIAL COMPOSITES AND TENCATE ADVANCED ARMOUR BUSINESS MODEL
END-USER MARKETING■■ 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 fibre
suppliers ■■ Reputation and qualifications of renowned market participants
TECHNOLOGICAL INNOVATION■■ TenCate ABdS™ active blast countermeasure system■■ Innovation via networks and partnerships (TApAS, TpRC,
AMRC, eTAC)■■ Qualifications for future programmes■■ Industrialisation of processes, focused on volume production
PRODUCT DIFFERENTIATION■■ development of new areas of application ■■ developments in unidirectional (Ud) tape technology■■ development of the non-aerospace product portfolio■■ development of the value chain particularly in automotive
applications for thermoplastic composites
COST LEADERSHIP■■ Increased efficiency in production ■■ Economies of scale■■ Outsourcing and partnerships■■ development of low-cost solutions (industrial markets)
capabilities and a wide range of protective (fibre-reinforced)
composites. The market group supplies complete solutions for vehicle
programmes.
35TenCate annual report 2013 | BUSInESS OVERVIEW |
STRATEGY The strategy of the sector is derived from the group strategy, which is
based on TenCate’s business model for value chain management. This
strategy continued to be implemented in 2013. 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 FABRICSTenCate 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 fibres from different providers. A good example of
this strategy is the success of the TenCate defender™ M and the
TenCate Tecasafe® portfolio. By effectively mobilising internal
knowledge and collaborating with third parties, the aim is to
accelerate access to new geographic and other markets.
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 specific functional aspects and qualities which
end-users demand. TenCate works closely with market operators,
suppliers of the complete range of industrial clothing and professional
wear, which occupy leading positions in certain markets. This
collaboration usually results in co-development, joint branding and
marketing support.
COMPOSITESThe focus of the Group-wide growth strategy is on composite
activities, where TenCate currently occupies a unique technology
position. After an initial focus on aerospace applications, further
growth is being pursued in industrial markets, such as tooling (die
construction), the automotive industry, the electronics industry and oil
and gas extraction (transport pipes). The combination of thermoset
and thermoplastic composite technology offers TenCate good growth
opportunities in these markets.
The strategy is also focused on good collaboration with operators
along the entire value chain. TenCate has close relationships with fibre
producers, the processing industry and end-customers (OEMs). 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 fibre producers and chemical
companies. Many orders are project-driven. delivery reliability along
the entire chain is vital. As a result of its leading market positions,
TenCate is usually one of the largest buyers of fibres in the specific
market segment. long-term co-operation agreements have been
entered into with a number of fibre producers.
VALUE PROPOSITIONTenCate is the global market leader in the field of protective fabrics
and one of the pre-eminent suppliers of composites. Good internal
collaboration is also essential with regard to the value proposition.
The aerospace background of the subsidiary TenCate Advanced
Composites also gives TenCate a strong base in aerospace armour.
The operation of different business units in, for example, the defence
market strengthens the overall value proposition in the market.
TenCate positions itself as a specialist in the field of personal
protection. The various activities in the market are mutually
reinforcing.
With its broad technological background, TenCate is well able to
anticipate specific market requirements. These usually result from
laws or regulations, industrial and safety standards 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
flexibility to respond effectively.
(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
)
ISO
140
01 (F
, AU
, NL)
/ M
VO P
L (N
L)
(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
)
36 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Sectors
SAFETY
SUSTAINABILITY
QUALITY
Safety guarantee refers to:■■ Highly Protected Risk (HPR) status determined by FM Global
Sustainability guarantee refers to:■■ ISO 14001 environmental management systems■■ CSR Performance Ladder (CSR PL), CSR management system for corporate social responsibility
Quality guarantee refers to: ■■ ISO 9001 general quality management systems■■ AS 9001 (US), EN 9100 (Europe), JISQ (Asia) aviation quality management systems
37TenCate annual report 2013 | BUSInESS OVERVIEW |
MARKET GROUPSThe Geosynthetics & Grass sector comprises two 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,
sport and recreation.
TenCate Geosynthetics has production sites in Europe, north America
and Asia. There are also 67 sites worldwide for sales and technical
support, including over 30 in the United States.
■■ 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 fibres, woven synthetic turf and
carpet backing (upstream activities), the Grass group includes a
growing number of system development and marketing companies
(downstream activities).
TenCate Grass has production sites (upstream) in north America, the
netherlands and the Middle East. There are three marketing and sales
organisations (downstream) with offices in countries including the
netherlands, norway, Switzerland, new Zealand, Australia, the
United Kingdom and the United States.
GEOSYNTHETICS & GRASSThe main end-markets in the Geosynthetics & Grass sector are:
■■ Infrastructure■■ Water management■■ Sport and leisure.
TenCate Geosynthetics is the world’s largest producer of
geosynthetics (geotextile fabrics, non-wovens, grids and liners,
fabrics) for infrastructure, the construction industry and environmental
applications. The market group has three distinct business units:
infrastructure, water & environment and industrial fabrics.
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
(filtration) and for the dewatering of polluted sludge. The portfolio also
comprises industrial fabrics for the agriculture, horticulture and
recreation sectors, among others.
TenCate Grass develops, produces and markets synthetic turf
components (fibres, outdoor backing and infill) and synthetic turf
systems. The areas of application are top-flight and recreational sports
as well as landscape applications (landscaping, infrastructure). The
Grass group has a leading market position worldwide in terms of
technology and market share.
The market for landscaping is growing strongly and ultimately has
equivalent if not greater potential than the sports market.
TECHNOLOGYThe Geosynthetics & Grass sector is concentrated around extrusion
and non-woven technologies. The main raw materials used are
polyethylene and polypropylene, as well as purchased synthetic yarns,
such as nylon and polyester. TenCate Grass has also been producing
synthetic turf based on 3d weaving technology for some time. This
means the entire system is produced in-house under full internal
quality control. This process innovation has also delivered logistical
benefits.
38 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Sectors
BUSINESS MODEL TENCATE GEOSYNTHETICS
END-USER MARKETING■■ 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 and
South American markets
TECHNOLOGICAL INNOVATION■■ TenCate Geodetect™ solutions■■ dewatering and filtration technology■■ Biopolymers
PRODUCT DIFFERENTIATION ■■ Focus on differentiated, high-quality and functional products■■ Focus on water management, environment and infrastructure
COST LEADERSHIP■■ Economies of scale (volume products)■■ process optimisation ■■ Focus on reduction of purchasing costs and control
of volatility in raw material costs
BUSINESS MODEL TENCATE GRASS
END-USER MARKETING■■ 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■■ Brand positioning (GreenFields, Edel Grass, TigerTurf)■■ Relationships with sports federations■■ Reduction of total cost of ownership of sports pitches■■ product and system warranties■■ Creation of higher quality standard
TECHNOLOGICAL INNOVATION■■ Fourth-generation developments in synthetic turf for football■■ Weaving technology■■ Biomechanical characteristics (research project with third parties)
PRODUCT DIFFERENTIATION ■■ System components, ‘powered by TenCate’■■ Optimum support of downstream activities for development
of new system concepts
COST LEADERSHIP■■ Economies of scale ■■ process optimisation
39TenCate annual report 2013 | BUSInESS OVERVIEW |
STRATEGYThe strategy in the sector is derived from the group strategy, which is
based on TenCate’s business model for value chain management. This
strategy continued to be implemented in 2013. The market policy is
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. Cost leadership is a key pillar of the business
model. For non-wovens, the geosynthetics market is mainly volume-
driven. The same applies increasingly to the market for synthetic turf
fibres. As a one-stop shop for the project market, TenCate nevertheless
has an important competitive advantage. The company has cost-
effective production sites in Asia (geosynthetics) and dubai (synthetic
turf yarns). The logistical lines to the market are short.
Both market groups work to a large extent with partners in the chain.
The TenCate Geosynthetics market group works closely with specialist
consulting firms, dredging companies and construction firms, in order
to strengthen the focus on end-solutions.
In the synthetic turf market TenCate is almost at the beginning of the
value chain. In the synthetic turf segment, the company has
strengthened its position 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. This policy also results in growing co-operation with
the TenCate Geosynthetics market group.
VALUE PROPOSITIONThe value proposition for both geosynthetics and synthetic turf
solutions is concentrated largely in the field of sustainability. Water
shortages, or an overabundance of water, are important factors which
determine demand in the global market. Governments are focusing
increasing attention on the sustainability aspects of infrastructure,
civil engineering and sports projects. In many cases geosynthetics
have a demonstrably lower CO2 footprint than the more traditional
construction materials (concrete, rockfill). 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 specifications. The rise of synthetic
turf is mainly due to its greater playability, water savings and lower
maintenance cost compared to natural grass.
TenCate Geotube® Norfolk
TenCate Geotube® technology was used to restore
and strengthen a spit of land in norwich (UK)
between the River Bure and Salhouse Broad.
Salhouse Broad resulted from the cutting of turf.
The spit of land between this peat pool and the Bure
has suffered greatly from erosion over the last sixty
years. If the water separation were to give way, this
landscape, which is an important habitat for wild
animals, would suffer severe damage. It therefore
had to be restored and strengthened. The work was
carried out using TenCate Geotube® containers filled
with local dredged material to form a 170-metre-long
bank. Behind the containers dredge spoil was used to
return 7,000 m² of reedland and the waterline to its
original state. With stability, erosion protection and
fauna in mind, TenCate Geotube® containers are
being sown with reeds and grasses. This is
vegetation which occurs frequently here and should
therefore root quickly. The work itself had a minimal
impact on the environment.
40 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Sectors
STRATEGYXennia 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 field of digital inkjet technology. This
initiated key process innovation in the field of textile finishing. The first
(trial) production based on this technology in TenCate Outdoor Fabrics
began in 2013.
Xennia Technology refined its strategy in 2013, with a focus on
chemicals (ink formulations), software (control of printing systems)
and specific solutions (industrial inkjet processes). Supplies of
components for inkjet printers (print engines) were reduced. Xennia
Technology develops inkjet systems and inks (coating fluids)
particularly for functional additions to materials (smart materials) as
well as the decoration of various substrates (paper, textiles, plastics,
metal, ceramics and glass). Access to the market will be strengthened
through partnerships and efforts will be made to accelerate growth in
ink revenues.
TenCate Enbi has staged a major turnaround in the last few years.
With production sites in Europe, the United States and China, the
company has a unique position in the supply of components to leading
producers of printers and copiers. TenCate Enbi has also focused
successfully on the Asian market, where significant revenue growth
has been achieved in recent years.
In view of the relatively low quality awareness among end-users in the
synthetic turf market, TenCate continues to focus on higher quality
standards and the total cost of ownership. An optimum and safe
playing experience throughout the economic life of the product is of
primary importance.
TenCate has production sites in Europe, north America and Asia,
enabling it to respond flexibly and effectively to demand from local
markets. The collaboration with TenCate, a supplier of a wide portfolio
of materials, provides market participants logistical and purchasing
advantages.
The value proposition is accompanied by 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.
OTHER ACTIVITIES
The Other Activities sector comprises three entities■■ Xennia Technology
Specialist inkjet technology for industrial applications, such as the
printing, coating and finishing 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 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 finishing 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 office market, TenCate Enbi
serves niche markets, such as postal sorting machines, ATMs, photo
printers and insulation (based on foam).
41TenCate annual report 2013 | BUSInESS OVERVIEW |
CORPORATE HUMAN RESOURCESTenCate’s human resources policy is based on:
■■ Ensuring a safe work environment for employees■■ Increasing and maintaining employees’ skills, professional
knowledge and knowhow■■ Qualification, development and mobilisation of employees■■ Retaining and stimulating talent■■ developing leadership and entrepreneurial qualities■■ promoting internal co-operation.
GENERAL INFORMATIONOne of the key aspects of corporate human resources in 2013 was the
refinement of the organisational structure and the development of the
management.
Salaries worldwide rose moderately in 2013. Increments determined
under collective labour agreements, government-set minimum wages
and promotions were respected. A critical assessment was again
made of both the quality and quantity of the manpower factor.
Steps were initiated to make the corporate organisational structure
more market-oriented. The distinction in market dynamics between
the various continents is one of the main motives for structuring the
organisation, as well as the product market-technology combinations,
on a more continental basis.
The number of employees with employment contracts in the existing
companies decreased by 198 FTEs in 2013. Employee numbers rose in
America (48), Europe (as a result of the acquisition of Amber
Composites) and the Middle East. At the end of 2013 TenCate
employed 4,256 people worldwide (including the Edel Grass joint
venture).
ORGANISATIONAL DEVELOPMENTThe absolute priorities are to increase TenCate’s commercial strength
and the marketing and sales of the innovations which the company has
developed in recent years. That 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 and in each region/
continent. It is essential to translate and implement the strategy
appropriately.
MANAGEMENT DEVELOPMENTTenCate aims to fill at least 60% of vacant management positions
internally. The continued development of management, including at
senior levels, is essential. At the beginning of 2013 the continental
management teams in north America took part in a concise and
inspiring TenCate Executive programme aimed at strategic
entrepreneurship, strategic marketing and leadership. The European
management teams will take part in the same programme in early
2014.
The annual update of the succession planning at international
management level and the respective key specialists took place in
2013. TenCate has appropriate successors for over 60% of vital posts.
A number of them can occupy the vacant positions immediately. Others
will require around two more years to gain the necessary skills and
experience. One-third of them have the potential and need to develop
for another five years.
The trainee programme was further expanded in 2013. It is currently
being conducted in the dutch businesses. The aim is to extend this
programme further into the other countries/regions of the world in
which TenCate is strongly represented. young, academically trained
Corporate information
OWN EMPLOYEES
(in number of staff years)
year-end
2008
year-end
2009
year-end
2010
year-end
2011
year-end
2012
Year-
end
2013
delta
vs
2012
netherlands 931 862 785 819 795 774 – 21
Other Europe 612 569 724 672 630 659 29
United States 1,573 1,314 1,542 1,604 1,547 1,595 48
Asia / Australia 936 777 878 1,030 1,211 935 – 276
Middle East 385 283 342 228 271 293 22
Total 4,437 3,805 4,271 4,353 4,454 4,256 – 198
42 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Corporate information
Work began in 2013 on the more integrated deployment of competence
management in HR processes with added value (recruitment,
development, assessment and succession planning).
EMPLOYMENT CONDITIONSTenCate offers its employees a comprehensive and market-compliant
package of employment conditions. Annual benchmark assessments
are carried out for this purpose, in collaboration with parties including
Hay Group and local employer organisations. TenCate operates a
uniform remuneration policy for the management of all businesses.
The incentive system for senior management is also determined
centrally, on the basis of the results of the respective TenCate market
group and/or the Group as a whole.
TenCate operates businesses in 25 countries worldwide, each of
which has its own employment law, legal system and culture. The
operating companies therefore conduct their own personnel policy
geared to the local situation, taking into account both the conditions
specified by the Group as a whole and the market group and the
general principles.
CORE VALUESOne of TenCate’s core values is reliability. The integrity code applies to
everyone employed by TenCate. The code is part of each individual
contract of employment. A corporate compliance officer and a
confidential adviser have been appointed to support the code.
An employee satisfaction survey was conducted in the dutch TenCate
businesses in 2013. The response was positive and representative,
with an overall satisfaction score of 7.5.
OCCUPATIONAL SAFETY AND WELFARE TenCate’s policy is focused on implementing and/or organising 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.
and recently graduated people will be recruited for two years over and
above the normal complement to carry our two or three projects in the
field of business development, sales & marketing, R&d and/or
operations. The aim is to acquire specific 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.
TenCate supplies materials for the Falcon 9
TenCate Advanced Composites supplied composites
to Space Exploration Technologies Corp. (SpaceX) of
the United States for the improved version of its
Falcon 9 transport rocket. This is a two-stage rocket
developed and built by SpaceX to transport satellites
and the dragon space capsule. The rocket was
launched successfully on 29 September 2013 from
Vandenberg Air Force Base in Santa Barbara
(California, USA). The Falcon 9 and the dragon were
contracted by nASA to supply the ISS international
space station. TenCate Advanced Composites USA is
providing SpaceX among other things with more
high-temperature prepregs for the structure of space
craft and bulk moulding compound, a thermoset
composite used for injection moulding processes.
43TenCate annual report 2013 | BUSInESS OVERVIEW |
The focal points of the business development policy are:■■ TenCate ABdS™ active blast countermeasure system■■ TenCate automotive composite activities■■ Inkjet technology■■ development of new synthetic turf systems and the associated
market■■ Growth activities in the Water & Environment market group
(TenCate Geosynthetics)■■ development of activities in new geographic markets (China, Japan
and South America)
The buy & build strategy is co-ordinated from the corporate business
development department. This means in particular that acquisition and
divestment processes are controlled and co-ordinated at holding
company level.
CORPORATE BRANDINGTenCate’s brand policy is focused on further strengthening and
expanding its image in the market, relying on the strong TenCate
corporate brand that forms the basis for corporate 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, in order to emphasise the 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. TenCate also conducts an
active protection policy. That applies to all its intellectual property.
Action is taken if any infringements are identified, both independently
and with the help of external specialists.
CORPORATE INFORMATION TECHNOLOGYWith the completion of the establishment of the three regional IT
shared service centres in the north America, EMEA and Asia/pacific
regions, TenCate focused on the further improvement of information
provision in 2013.
The IT organisation was adapted, with the objective of further
harmonising ERp systems. To this end an ERp competence centre was
established to support local businesses in the implementation and
support of these ERp applications.
INVESTMENTSA number of ERp systems were replaced in 2013, including in the
United States, further reducing the diversity of ERp systems in
operation. Additional investment also took place in IT infrastructure.
The final separate e-mail system is being replaced and brought within
TenCate standard environment.
GREEN ITMeasures were again taken and investments made to develop the
Green IT strategy in 2013:■■ The purchasing of large copiers was brought under a single master
agreement; immediate benefits include lower consumption of
energy and materials by this green equipment ■■ The number of individual printers was further reduced■■ More information is supplied digitally and via the intranet.
CORPORATE BUSINESS DEVELOPMENTCorporate business development supports the development and
implementation of the company’s strategic technology roadmap and
co-ordinates activities relating to innovation grants. It also provides
support for TenCate’s introduction to new geographic and other
markets, in close collaboration with the operating business units.
44 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Corporate information
DEVELOPMENTS IN 2013Further work took place on the positioning of the corporate brand
worldwide in 2013. The market groups are continuing to apply the
co-ordinated brand strategy in a consistent manner.
It was already evident in previous years that this strategy was also
bearing fruit in terms of brand value.
TenCate registered various new patents and thus further expanded its
patent portfolio in 2013. This is appropriate for an innovative
organisation that constantly develops new products incorporating new
techniques or technologies. The brand portfolio can be viewed on the
website. The patent portfolio is not disclosed, due to competition
considerations. TenCate has more than 670 patents.
CORPORATE SOCIAL RESPONSIBILITYTenCate’s sustainability policy forms an integral part of the pursuit of
continuity in the company, which has existed for over 310 years. It is
reflected in the common denominator and the common goal of the
TenCate organisation: to protect people and their working and living
environments – protecting people. It is also based on the forward-
looking vision, mission and strategy of the Executive Board.
As a multinational company, TenCate is aware of the effect its actions
have on the social environment. By maintaining the company on the
basis of sustainable profitability, TenCate aims to play a part in
ensuring 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- proofing and heat and flame resistance.
Marsh island with geosynthetics
Trial projects are being conducted in the Markermeer
and IJmeer with the aim of creating a future-proof
ecological system. One of the projects is a marsh
between Trintelhaven and lelystad. This involves an
investigation into the feasibility of a marsh on a
muddy bed. The edges of the marsh island are being
built up with 180 units incorporating TenCate
Geocontainer® technology. On top of the containers a
layer of 60 units is being laid with TenCate Geotube®
technology. TenCate Geocontainer® and TenCate
Geotube® technology was chosen due to the duration,
relatively low costs and environmental friendliness.
The containers and tubes are being filled with sludge.
The water drains out through the pores while the
sand is left behind. As additional protection against
floating ice and wave action, the outer edge is being
covered with rubble. This layer will ultimately be
covered with clay and reeds. That will help purify the
water and give the island the appearance of a marsh.
A measurement period will then begin. The results of
the measurement of the trial marsh will be combined
with the results of other experiments. The intention is
that in 2015 all results will lead to a recommendation
to the Government on possible action in the
Markermeer and IJmeer.
45TenCate annual report 2013 | BUSInESS OVERVIEW |
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 fields 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 to
make corporate social responsibility in particular visible, measureable
and controllable. These range from environmental management
systems (ISO certifications for quality, the environment and corporate
social responsibility) to financial and non-financial 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 fields. Open innovation and closed open
innovation are the keywords for the ‘new competition’: sustainable
co-operation. The theme of ‘sustainable procurement’ is also of
growing importance in specific market groups. As market leader,
TenCate aims to be among the front runners in the 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, efficient and eco-efficient
production, recycling and the bio-based initiatives currently being
developed.
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 fulfil the needs of customers and users in a flexible and
sustainable way. TenCate has a leading position in the pursuit of this
objective. By already working further on ground-breaking technologies
and techniques for the processing of natural, synthetic, bio-based,
biologically degradable, recyclable or secondary raw materials,
TenCate will increasingly be able to manufacture biologically,
chemically or mechanically recyclable products using cleaner and more
efficient production techniques. TenCate’s technology and product
road maps in particular chart the direction of future sustainable
innovations.
The corporate CSR team – which reports to the Executive Board –
specifies 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.
Organisation of corporate social responsibility
Executive Board■■ Vision, mission, strategy, business model, including corporate social responsibility■■ Defining and monitoring critical performance indicators (KPIs), i.e.
■■ General indicators■■ Specific indicators (CSR)
Corporate CSR team
Corporate risk manager
Group HR director
Head of corporate communication
Corporate information manager
Corporate CSR controller
Corporate investor relations manager
■■ Advice for Executive Board concerning corporate social responsibility■■ Practical progress of CSR policy■■ Definition and monitoring of specific indicators (CSR)
46 | TenCate annual report 2013 | BUSInESS OVERVIEW
. Corporate information
All four market groups in nijverdal have been certified in accordance
with the CSR performance ladder at level 3: TenCate protective &
Outdoor Fabrics by Bureau Veritas, TenCate Advanced Composites by
lRQA and TenCate Geosynthetics and TenCate Grass by dEKRA. The
CSR performance ladder is built around three core components based
on the international CSR guidelines (ISO 26000). In the first place the
certificate 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.
demonstrable co-ordination and dialogue also take place with
stakeholders. Every market group reports to them regularly on CSR
matters. The most relevant of the 33 CSR indicators (subdivided into
seven core CSR themes, the same as in ISO 26000) have also been
incorporated in the CSR management system for each market group.
CSR performance ladder level 3 certification 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 certification is based on at least one of the ISO 14001,
ISO 9001 and AS/En9100 certification standards.
DEVELOPMENTS IN 2013TenCate limited the environmental risks as fully as possible during the
2013 reporting year. The group managements were supported by the
CSR team worldwide with initiatives and projects promoting corporate
social responsibility. TenCate was active worldwide in numerous
projects related to or aimed at corporate social responsibility, involving
sponsorship, donations or participation in events. A full list can be
found on the dynamic annual report website (www.
tencateannualreports.com) and a summary appears on the corporate
website (www.tencate.com) under CSR projects.
TenCate provided sponsorship during the reporting year for a number
of sporting events, for around ten student teams by providing
composites and protective materials, for dozens of organisations,
including veterans’ and firefighters’ support associations, and for a
large number of events in local communities – partly through voluntary
work. TenCate Grass partnered with the Coöperatie Eerste divisie
(Cooperation First division) in 2013 in order to make high-quality
synthetic turf systems more accessible to dutch professional clubs. At
the end of last year many first division clubs were playing on
GreenFields® MX.
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
active on numerous national and international committees during the
year. The company has been working for decades with a number of
universities in Europe, including, in the netherlands, delft University
of Technology, the University of Twente and Saxion University of
Applied Sciences in Enschede. In Germany, TenCate works with
AZl Aachen, based at RWTH Aachen University in Aachen. In the
United Kingdom, TenCate works with AMRC in Sheffield.
47TenCate annual report 2013 | BUSInESS COnTEXT |
Business environment 48
Stakeholders 50
Materiality matrix 52
SWOT analysis 54
Risk management 56
Business context describes and explains the environment in which TenCate operates
BUSINESS CONTEXT
48 | TenCate annual report 2013 | BUSInESS COnTEXT
Business environment
BUSINESS ENVIRONMENTThe context in which TenCate operates can be described as the ‘risk
society’. Risks to human beings and society are to a large extent the
basis for the development of materials which offer solutions to
specific issues in society. TenCate is closely associated with this
context through the theme of ‘protecting people’. The worldwide
trends on which TenCate focuses are safety and protection as well as
sustainability and the environment.
The company expects these markets to grow over the long term. In the
short term, however, TenCate is dependent on the government as its
end-customer for 47% of revenues (2013). The dependence on
government spending in recent years has increased the uncertainty
surrounding organic developments in markets of relevance to TenCate.
Revenue trends are therefore difficult to assess and volatility has
increased. In the past, the risk profile was reduced by the global
spread of revenues, but pressure on government expenditure is now
evident in many geographic markets. The company has nevertheless
focused successfully on the development of private markets. TenCate
recorded 7% growth in non-government-related revenues in 2013.
In Europe, governments are under increased pressure to comply with
the financial conditions set by the European Commission. In the United
States, there were even automatic budget cuts (sequestration) in
2013. This impacted TenCate’s business environment.
PERSONAL PROTECTIONTenCate has a mission to protect people. This is reflected among other
things in the production of protective fabrics and armour composites
for personnel in wide range of jobs. The personal protection market is
a long-term growth market. In the short term, growth is dependent on
economic growth, which translates into the level of industrial output
and the availability of government resources for emergency and safety
services.
DEFENCEMeasured over the last 10 years, defence expenditure in Europe
reached a low point in 2013. In the United States, the discussions on
the government budget had a paralysing effect on expenditure. The
American market is by far the most important defence market. The
accelerated drawdown of US troops from foreign countries has led to
a considerable fall in demand. TenCate nevertheless occupies a
leading position in protective materials for army uniforms and armour
materials. In a shrinking market, TenCate’s leading position in armour
composites has been strengthened by a consolidation in the market
and by the company’s long-term association with the market.
MOBILITYThe global trend towards weight-saving in aircraft and vehicles
remains an important factor for a sustainable environment. There is a
growing awareness that the availability of fossil fuels is finite. Weight
savings make it possible to achieve a considerable reduction in fuel
consumption. The new market for automotive composites is being
driven by stricter regional legislation on CO2 emissions. TenCate
Advanced Composites operates in the market for composites which
can replace traditional heavy materials. The worldwide composites
market is growing fast. The new markets are expected to accelerate
this growth.
INFRASTRUCTURETenCate serves the infrastructure market through the production of
geotextiles for infrastructure works and synthetic turf for landscaping.
Investments in infrastructure works are largely dependent on
government spending, although recent natural disasters and the
phenomenon of global warming have increased the priority given to
water management and coastal protection. This will be a growth
market in the long term, partly in view of the increasing importance of
infrastructure for economic growth.
PersonalprotectionDefence
Mobility
Infrastructure
Watermanagement
Sport & leisure
Other
21%
8%
12%
30%
2%
21%
6%
2013
BUSInESS EnVIROnMEnT
49TenCate annual report 2013 | BUSInESS COnTEXT |
WATER MANAGEMENTTenCate produces geotextiles and systems for water management,
maritime projects and dewatering. TenCate Geosynthetics has
recorded strong growth in the worldwide Water & Environment
business unit in recent years. For TenCate, the water management
market is driven mainly by the increasing emphasis on protection of
the environment against water and rising water levels. The company
nevertheless also offers solutions for areas suffering from water
shortages.
SPORT AND LEISUREThe business environment in the Sport and leisure end-market
comprises the markets for synthetic turf systems and outdoor fabrics.
The synthetic turf market remains a growth market. The provision of
sports facilities is generally seen as a regional or central government
responsibility. Synthetic turf can also offer a solution where water is
scarce. TenCate has secured a strong position with the new synthetic
turf systems for sports, including at the top level, partly as a result of
the Group’s innovative technology. The brands with which TenCate
operates in local end-markets and the local business partners with
which TenCate has associated are in the top segment of the market.
TenCate has a strong quality image.
SUSTAINABILITYThe sustainability aspect is of constantly growing importance in the
business environment in which TenCate operates. not only are
governments increasingly adopting ‘sustainable procurement’, but
industrial partners are also imposing ever greater requirements. The
automotive composites market, for example, which is relatively new to
TenCate, is driven by the need for a sustainable mobility concept in the
market. Another example is the need for further development of
legislation on the sustainability and recycling of synthetic turf
systems. TenCate is anticipating this with the launch of GreenFields®
MX, the first synthetic turf system that is 100% recyclable. This will
provide benefits not only for the customer, but also for the
environment.
These developments are making high demands in terms of sustainable
production processes, recycling, sustainable energy consumption and
the CO2 footprint. TenCate deliberately seeks out these trends, since
they will lead to higher demands being made on the required materials,
including greater sustainability.
new developments will be necessary in the years ahead, both on the
demand side and in production processes, in order to respond to this
trend. However, this will be a gradual development process. It
demands a global approach in all parts of the company. TenCate keeps
this subject high on its agenda.
TenCate puts first digital inkjet machine into service
digital finishing based on inkjet technology is a new
process technology used to apply high-grade
functionalities to a textile base. That is done by
means of a drop-on-demand technique and pico
droplets. This means that coatings and finishes can
be applied extremely accurately to technical textiles.
This development heralds a revolution in process
technology. A wide variety of designs and
characteristics can now be applied to different
types of fabric at high speed.
Compared to existing technologies, the new
technology offers complete design freedom at low
cost. new functionalities can be introduced rapidly
into the production process. This delivers higher
quality at lower production cost, logistical benefits
and new marketing and sales possibilities. digital
inkjet technology also delivers savings of up to 60%
in energy consumption, up to 80% in water
consumption and up to 90% in dye and pigment
consumption.
50 | TenCate annual report 2013 | BUSInESS COnTEXT
Stakeholders
Major industrial partnerships in the value chain in which TenCate
operates were announced in 2013. The collaboration with BASF in
automotive composites, for example, was expanded with the addition
of Owens Corning. The three companies, each with their individual
capabilities, will jointly develop this new, promising market.
Fundamental image and reputation management was pursued through
end-user marketing and an active media policy. Relationships with
governments were strengthened to persuade end-customers of the
quality of TenCate products. presentations were given to members of
Congress in Georgia, in the United States. In the netherlands, regular
contact was maintained with the trade unions and the Central Works
Council.
MATERIALITY ANALYSISOn the basis of its business model, TenCate identified and grouped the
respective stakeholders at corporate level in 2013 for each
cornerstone or element of value chain management. Key stakeholders
were selected in each group for the materiality analysis. In addition to
the regular contacts and discussions, they were invited to take part in
a two-yearly qualitative dialogue focused on discussion and
prioritisation of material subjects. To that end a list of relevant
subjects was drawn up for TenCate, based on the one hand on relevant
standards for sustainable reporting and industrial guidelines (GRI,
SASB, ISO) and on the other hand on material subjects for peers,
suppliers and customers. TenCate applied quantitative and qualitative
criteria to filter this list, arriving at a list of specific subjects of
Stakeholder management within TenCate supports the organisation in
achieving its strategic objectives. By informing and influencing
external and internal stakeholders, TenCate aims to initiate a dialogue
with them and create and maintain constructive relationships. The
company does so by effectively managing the expectations and
experiences of the stakeholders concerned.
DIALOGUETenCate took various initiatives in 2013 to maintain and strengthen
relationships with numerous stakeholders. The company played an
active part in many committees with a view to establishing, exploiting
or intensifying open innovation and partnerships. Examples of
partnerships are the Thermoplastic composites Research Centre
(TpRC), the Thermoplastic Affordable primary Aircraft Structure
consortium (TApAS), the European Thermoplastic Automotive
Composites (eTAC) consortium and the Aachener Zentrum für
Integrativen leichtbau (AZl). A list of the innovation networks in
which TenCate participates can be found at www.annualreports.com.
A Capital Markets day for analysts and shareholders was held in
november at the TenCate Advanced Armour production site in
primarette. Financial stakeholders were informed about developments
in the strategy of the Advanced Armour group and the Grass group.
presentations were given at various financial centres in Europe during
roadshows for financial stakeholders. The Annual General Meeting of
Shareholders was held in the Heracles Almelo Business Club in April
2013.
Shareholders and financial relations
Media, policymakers andbranche organisations
Universities, colleges and institutions
GovernmentsEmployees and representatives
Customers Partners Suppliers
Table of stakeholders of TenCate
51TenCate annual report 2013 | BUSInESS COnTEXT |
relevance to TenCate and its stakeholders. The invited internal and
external key stakeholders were asked during individual discussions to
validate these material subjects and state the degree of importance to
the stakeholders concerned or their organisation on the basis of a
quantitative rating system.
The relevance to TenCate’s strategy was determined by the company
itself. The material subjects were then ranked in order of importance
to TenCate’s strategy. On the basis of this ranking a materiality matrix
was composed, as shown in this annual report. The corporate dialogue
will be repeated internally and externally in 2014 with other groups of
key stakeholders, with whom it will be repeated again two years later.
The market group entities which were certified in accordance with the
CSR performance ladder (level 3) have conducted their own annual
dialogue with stakeholders of relevance to these business units since
2012. A materiality matrix will also be compiled for these units in
2014. This market group dialogue will now also be supported twice a
year by a digital magazine covering all relevant CSR subjects.
FOLLOW-UPThe materiality analysis provides support for the control of TenCate’s
value creation process. The value chain management business model
plays a guiding role in this regard. The results of the corporate
dialogue were discussed in the corporate CSR team, which then drew
up recommendations for the Executive Board. The results of the
market group dialogues were discussed by the CSR teams concerned.
The responsible managements are involved in the continued follow-up
of the results and action points.
As well as setting objectives for social, ecological and economic
aspects of corporate social responsibility, the company’s impact on the
social environment will be made increasingly measurable. The current
stakeholder dialogue, materiality analysis and materiality matrix will
play a central role in this regard. They will provide an increasingly
incisive view over the years, making it easier to identify the internal
and external factors of importance to TenCate and to determine where
the impact is greatest, what to aim for and where to make
adjustments.
The materiality analysis is robust and was devised with the
involvement of many stakeholders. The subjects considered most
material are those which have the greatest impact according to the
analysis. TenCate realises that the insights obtained must be
developed further as part of the value creation process to enable the
ultimate impact to be measured.
52 | TenCate annual report 2013 | BUSInESS COnTEXT
Materiality matrix
•Technology innovation
•Economic performance
•Product differentation
•Energy efficient products
•Community involvement
•Procurement
•Product responsibility
•Employee well-being
•Greenhouse gas
reduction
•Water •
Energy efficiencyoperations
Waste
•
Diversity andequal opportunity
• •Employee training and
development
•Life Cycle Analyses
•Materials
•Employee health
& safety
•Corporate governance
• Social
• Ecological
• Economical
• Technological
•Cost leadership
•End-user marketing
Impo
rtan
t to
core
sta
keho
lder
s
Important to TenCate
+++
+++
53TenCate annual report 2013 | BUSInESS COnTEXT |
The materiality matrix comprises material (relevant) subjects which
affect TenCate’s performance. It establishes a connection between
TenCate’s strategic objectives, value proposition and governance
model. The greater the importance of the subject for both society and
business operation, the greater the materiality.
Material factors are plotted on the horizontal axis in respect of their
importance to TenCate’s strategy, such as the approach to
sustainability, innovation policy and value chain management. These
factors are plotted on the vertical axis in respect of their importance
to key and other stakeholders, such as customers, shareholders,
partners and employees.
By associating a relative value with these factors, it is possible to see
which subjects are most relevant and where TenCate is working to
improve performance and intensify the dialogue with all stakeholders.
The matrix is used as a management mechanism in relation to the
chosen critical performance indicators and CSR objectives. This
approach helps in determining the most relevant focal points for
sustainable business operation.
Representatives from almost all groups of core stakeholders were
approached for the corporate dialogue in 2013. The diagram shows the
core stakeholders involved. The only group not included in the
qualitative dialogue on this occasion was that of suppliers. For this
group TenCate relies on the ongoing dialogue of the market groups
covered by the CSR performance ladder.
The corporate dialogue has given rise to a robust materiality matrix
which clearly highlights the relevance of TenCate’s strategy. Both the
external and internal stakeholders consider the company’s economic
performance and – with minor differences of emphasis – the four
cornerstones of TenCate’s business model to be of the greatest
importance. Another striking feature of the matrix is that external and
internal stakeholders focus to some extent on other areas. The
subjects under ‘environmental management’ are deemed important
mainly by the internal stakeholders and less so by the external
stakeholders. This could indicate that external stakeholders are not
yet sufficiently aware, or have not been made sufficiently aware, of
the impact which TenCate’s products and solutions have on matters
such as ‘energy efficiency’ and ‘greenhouse gas reduction’. This
provides opportunities to intensify the existing end-user marketing,
particularly with regard to sustainability aspects. The detailed results
of this qualitative dialogue are analysed by the Executive Board, the
managements concerned and the corporate CSR team. The results are
taken into account in TenCate’s ongoing policy definition and
implementation. The five most material subjects – technological
innovation, economic performance, product differentiation, cost
leadership and end-user marketing – are analysed in detail in this 2013
annual report.
54 | TenCate annual report 2013 | BUSInESS COnTEXT
SWOT analysis
Strengths Weaknesses
■■ 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 co-operation 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 flexible
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.
■■ TenCate offers its customers highly innovative products and solutions,
but as a result of the fragmentation of markets with specific
end-customer requirements, the sales organisation is still
insufficiently developed to generate rapid revenue growth with new
products.■■ TenCate generates a relatively small proportion of revenues in
emerging markets. 22% of revenues were generated outside Europe
and the United States in 2013.■■ Although government-related sales have declined in recent years as a
proportion of total revenues, the dependence on this market remains
high. These revenues are often project-based, which can result in
shocks in periodic revenue reporting. ■■ As a manufacturing company, TenCate must ensure sufficient
utilisation of production capacity even in the event of disappointing
revenues. This may have consequences for margins in a particular
period. Some volume production remains necessary.
Opportunities Threats
■■ Business development covering a number of key points provides focus
and ensures effective deployment of people and resources.■■ The increasing attention paid to fuel savings and reduction of CO2
emissions in the aviation and automotive industries offers
opportunities.■■ TenCate has maintained its innovation policy under difficult market
conditions and has further developed as a company, with consolidation
taking place in certain market sectors. The consistency of its strategic
policy has strengthened the competitive position.■■ 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. ■■ Emerging markets still lag behind in terms of standards and
specifications in some fields. However, these markets are largely
prepared to use modern technologies, enabling them to make up any
lost ground.
■■ Macroeconomic uncertainty. Continuing pressure on European and US
government budgets. Although the proportion of revenues generated
in the defence market has decreased sharply in recent years, this
market still provides an important source of profit, in view of the
high-quality character of the products involved.■■ A large part of TenCate’s revenues are generated by large projects.
Any delay or cancellation of these projects may have a major impact
on the composition of revenues and profitability in the short term.■■ A low cotton price in the world market causes price pressure at the
lower end of the market, which can work through to the higher-quality
market segment on which TenCate concentrates. In some markets the
end-customer may sacrifice functionality in favour of price. ■■ TenCate supplies innovative synthetic turf systems which offer the
best solution for the customer. Buyers in the synthetic turf market
often overlook the specific sporting performance and the associated
sustainability requirements in favour of price.
The SWOT analysis is a permanent part of the strategic planning of
each market group within TenCate. 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 mainly in the unique
characteristics whereby the company can successfully implement its
Vision, Mission and Strategy. These characteristics are summarised
below under Strengths and flow directly from the key value drivers
(see page 20). The improvement points stated here are a summary of
the internal weaker points observed in the organisation.
55TenCate annual report 2013 | BUSInESS COnTEXT |
Challenges
Exploiting opportunities and/or averting threats from a position of strength
■■ TenCate’s strength flows from the business model comprising the four
cornerstones of innovation, cost leadership, product differentiation
and end-user marketing. The exploitation of these four cornerstones
leads to sustainable value creation for stakeholders.
■■ TenCate supplies innovative solutions, such as composites, which can
provide solutions for requirements such as fuel savings and reduced
CO2 emissions in the aviation and automotive industries.
■■ There is increasing demand for high-quality protective fabrics for
personnel. TenCate provides solutions which meet the highest
standards and can limit safety risks.
■■ TenCate is well positioned to collaborate with external partners
(co-creation) in order to offer new solutions and accelerate time to
market.
■■ TenCate’s technological base enables it to initiate ground-breaking
developments.
■■ The dependence on government spending can be reduced by means of
marketing targeted at end-users, with a focus on the development of
private markets.
■■ After a few years, products developed for the aerospace market, for
example, also make their way into other markets which make high
demands on functional materials.
■■ TenCate can respond to a wide range of functional requirements of
user groups in local niche markets.
■■ TenCate products and solutions provide functional added value for the
customer. End-customers can be persuaded to adopt new solutions by
collaboration with bodies representing certain target groups.
Improving weaknesses and averting threats■■ A strengthening of the sales organisation and partnerships in Asia, the
Middle East and South America can lead to a stronger position in new
markets. Emerging markets are prepared to use modern technologies.
■■ A strengthening of marketing and sales activities, particularly for new,
high-quality products with high added value. The aim of this is to
achieve revenue growth in the short term through broad acceptance in
the market by means of targeted end-user marketing.
■■ Reduced dependence on government spending through increased
focus on private markets. The increase in revenues of TenCate
protective Fabrics from TenCate Tecasafe® plus and the private
end-markets of TenCate Geosynthetics are intended to reduce this
dependence.
■■ The threat of constant pressure on government budgets in Europe and
the United States can be limited by further geographic expansion.
■■ TenCate endeavours to maintain flexibility in production, with
consideration increasingly given to partnerships and outsourcing of
production.
56 | TenCate annual report 2013 | 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 been
developed for that purpose, which are regularly updated by and
discussed with the Group management. The main risks and the
applicable risk control models are described briefly below. A full
description of the risk management can be found on the TenCate
website (www.tencate.com/nl/corporate-governance).
STRATEGIC RISKSIn 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 unit and adjust its
course accordingly. A second model used is the SWOT analysis (see
page 54). This analysis is used as a basis for agreements with the
management on measures to reduce risks and identify opportunities in
the markets.
MARKET RISKSThe major risk factor in demand for TenCate products is government
expenditure. By building flexibility into cost structures, it is possible to
offset the consequences of any drop in demand to a certain extent.
OPERATIONAL RISKS TenCate’s organisational 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 RISKSTenCate’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 RISKSTenCate 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 Financial Committee of
the Supervisory Board twice a year.
FINANCIAL RISKSThe financing of the company is for the most part centralised through
corporate treasury. The main financing source is the syndicated loan.
The original syndicated loan amounted to € 450.0 million and was
reduced to € 400.0 million at the Group’s request. € 190.3 million of
this facility was drawn as at 31 december 2013. This loan is due to
mature on 8 december 2015. The Group’s policy is to arrange
refinancing in good time.
The main covenant concerns the net debt / EBITdA ratio. In view of the
specific seasonal pattern in TenCate’s financing requirement, different
quarterly debt / EBITdA ratios have been agreed, substantially
reducing the risk of a breach of covenant.
Since a substantial part of TenCate’s assets are intangible (principally
goodwill), an impairment test is carried out on these assets at least
once a year. This is shared with the Supervisory Board and the
external auditor. The values of the intangible assets are assessed on
this basis. This did not result in any impairment charge in 2013. Full
details of the impairment test can be found in paragraph 37.2.
57TenCate annual report 2013 | BUSInESS COnTEXT |
The risk of an interest rate rise in the subsequent years is hedged in
principle to various percentages by means of derivative financial
instruments. The effect of changes in the value of these derivative
financial 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 for at least the next six months by
means of currency options or is offset internally against the translation
risk. The foreign currency transaction risk is hedged by means of
foreign exchange forward contracts or currency 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, as well as US dollar purchases by
subsidiaries in the eurozone.
TenCate has placed the pension provision for dutch employees with
Stichting pensioenfonds Koninklijke Ten Cate. The pension fund has
taken measures in its investment policy to lower the risk profile.
TenCate uses the OCI method to take account of actuarial gains and
losses, which can lead to substantial changes in Group equity.
RISK MANAGEMENT AND CONTROL SYSTEMSA whistleblower 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 filed and the performance, results,
outlook and certain risk management aspects are discussed once
every quarter. The risk management also forms part of the
consultations with the Financial Committee of the Supervisory Board.
All managers and controllers sign a letter of representation twice
a year declaring their compliance with financial reporting / internal
control requirements.
EVALUATION OF RISK MANAGEMENT AND CONTROL SYSTEMSThe Executive Board is of the opinion that:
■■ The risk management and control systems provide reasonable
assurance that the financial 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 field 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-benefit assessments are constantly made when assuming
risks and taking control measures;■■ Human failings and even simple errors or mistakes can have major
consequences;■■ Conspiracies by officials 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.
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, which does not apply to Royal Ten
Cate.
58 | TenCate annual report 2013 | BUSInESS COnTEXT
. Risk management
CORPORATE RISK MANAGEMENTThe 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 fire, explosion and
natural disaster, such as floods, earthquakes, storms and hurricanes.
In co-operation 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
the FM Global Highly protected Risk Award is presented.
Other initiatives are also deployed to maintain a high level of safety
culture within TenCate. Examples are refresher courses for the
company emergency service and the handling of chemicals and highly
inflammable materials. The corporate risk manager also 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 2013In the autumn of 2013, the insurer FM Global granted the Highly
protected Risk Award to three businesses. These were the TenCate
Advanced Armour plant in primarette (France) and the TenCate
protective Fabrics spinning and non-woven mill at Senoia (Georgia,
USA). A total of nine TenCate production sites have received this
award.
Various refresher courses were organised in nijverdal in the spring
and autumn of 2013, including for the company emergency service.
International Achievement Award for contribution to sustainable city
Close to Tianjin (China), to the southeast of the
capital Beijing, a new city is emerging: Tianjin
Eco-City. It covers an area of 34 km2 and is based on
sustainability. One of the constituent parts of the city
is Qingjing lake. TenCate Geosynthetics played a key
part in transforming this 30-year-old polluted
wastewater impoundment into a pristine lake using
TenCate Geotube® technology. The tubes were filled
with polluted sediments, dewatered, stacked in four
layers and integrated into the landscape.
This contribution was recognised by the presentation
of the Outstanding Achievement Award to the Water
& Environment business unit of TenCate
Geosynthetics by the Industrial Fabrics Association
International (IFAI). TenCate Geosynthetics has won
an IFAI award every year for the past eight years.
This is the fourth award for the Water & Environment
business unit. The market increasingly appreciates
the sustainability benefits of geotextiles (service life
and low environmental impact).
59TenCate annual report 2013 | GOVERnAnCE |
Executive Board 60
Supervisory Board 61
Report of the Supervisory Board 62
Corporate governance 65
In Governance the company explains how management and supervision are organised within TenCate
GOVERNANCE
60 | TenCate annual report 2013 | GOVERnAnCE
as at 1 January 2014
Executive Board
L. de Vries (1951), president and Chief Executive Officer
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 Strategy Board Twente■■ Member of Industrial Board Advanced Materials Manufacturing Oost-nederland
D.C. Clarke BBA (1958), Group director of TenCate Advanced Armour and TenCate Advanced Composites nA
Group directors
Corporate management
F.J. Meurs MBA (1967), Group director of TenCate protective Fabrics and TenCate Advanced Composites EMEA
E.J.F. Bos (1961), Corporate director of Finance
J.H.A.J. Gritter (1968), Corporate director of Human Resources
R.P. Janse (1967), director of Corporate legal Affairs, Secretary of the Company
D.M. Olsen MBA (1954), Group director of TenCate protective Fabrics Americas & ApAC
W.L. Moore BSc (1963), Group director of TenCate Geosynthetics
G.J.M. Vliegen (1966), Group director of TenCate Grass
F.R. Spaan (1955), Corporate director of Business development
At the beginning of 2014, the first steps were taken towards a new, continent-based
management of businesses. The new organisational structure is consistent with the
aim of more market-focused operation. Up-to-date details of the Group management
can be found on the Company profile page on our website.
61TenCate annual report 2013 | GOVERnAnCE |
E. ten Cate (1945) 1 *
Commenced in office 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
P.F. Hartman (1949) 2 *
Commenced in office 2013
End of current term 2017
Vice Chairman of Air France KlM
Chairman of the Supervisory Board of Texel Airport n.V.
Member of the Supervisory Board of Air France KlM S.A.
Member of the Supervisory Board of delta lloyd Group n.V.
Member of the Supervisory Board of Fokker Technologies Group B.V.
Member of the Supervisory Board of CAI - Compagnia Aerea
Italiana s.p.A.
Member of the Supervisory Board of Kenya Airways
Chairman of ACARE (Advisory Council for Aviation Research and
Innovation in Europe)
Chairman of the Executive Board of Connekt
Until 1 July 2013, Chairman and director of KlM n.V.
All members of the Supervisory Board are of dutch nationality.
J.C.M. Hovers (1943) Chairman 1, 2
Commenced in office 2008
End of current term 2016
Chairman of the Supervisory Board of plieger nV
non-executive board member of Teleconnect Inc
Member of the Supervisory Board of Randstad Groep nederland bv
Former Chief Executive Officer of Stork nV and OCE nV
P.P.A.I. Deiters (1943) deputy Chairman 2
Commenced in office 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
as at 1 January 2014
Supervisory Board
1 Member of the Financial Committee.
2 Member of the combined Remuneration, Selection and Appointments Committee.
* Chairman.
From left to right: E. ten Cate, p.p.A.I. deiters, J.C.M. Hovers and p.F. Hartman.
62 | TenCate annual report 2013 | GOVERnAnCE
ANNUAL REPORTWe hereby present the 2013 annual report as prepared by the
Executive Board, incorporating the financial statements. The financial
statements have been audited by KpMG Accountants nV and were
discussed with the Executive Board on 26 February 2014, in the
presence of the auditor. The unqualified auditor’s report is included in
this report in ‘Other information’.
We are of the opinion that the annual report fulfils the transparency
requirements and forms a good basis on which the Supervisory Board
can account for its supervision.
We propose that you adopt the financial 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.
COMPOSITIONThe current members of the Supervisory Board are Messrs
p.p.A.I. deiters, E. ten Cate, J.C.M. Hovers and p.F. Hartman.
Mr Hartman was appointed as a member of the Supervisory Board at
the last General Meeting of Shareholders, held on 18 April 2013.
At the end of the General Meeting to be held on 17 April 2014,
Mr deiters will retire as a member of the Supervisory Board upon the
expiry of his fourth four-year term of office. We are very grateful to
Mr deiters for his contribution to the development of Royal Ten Cate
into a modern industrial company. We shall miss his wealth of relevant
experience and his unique entrepreneurial personality. The
Supervisory Board is currently endeavouring to find a suitable
candidate to be proposed as a successor to Mr deiters.
A vacancy arose on the Supervisory Board as a result of the departure
of Mr Van Gelder on 4 March 2013. His successor will be proposed at
the General Meeting of Shareholders of 17 April 2014.
The nomination of the candidate followed extensive consultations
within the Supervisory Board. Candidates were sought on the basis of
the profile defined for members of the Supervisory Board. After a long
and intensive process, supported by external experts, the Supervisory
Board resolved to propose the candidate. If the General Meeting
makes no recommendation(s), the Supervisory Board intends to
propose Mrs M.J. Oudeman for appointment as a member of the
Supervisory Board for a term of four years at the General Meeting of
Shareholders of 17 April 2014.
The company aims to conduct a policy under which at least 30% of
members of the Executive Board and the Supervisory Board are female
and at least 30% are male. The company acknowledges the
importance of diversity, including with regard to the composition of its
Executive Board and Supervisory Board. The proposed appointment of
Mrs Oudeman to the Supervisory Board is already a step in the
intended direction. The company will also endeavour to select female
candidates when future vacancies arise. However, in view of the
industry in which the company operates, it is difficult to find suitable
candidates who also sufficiently fulfil the other required profile
characteristics.
SUPERVISIONThe Supervisory Board held plenary meetings with the Executive
Board on seven occasions in 2013. It also met independently on three
occasions. The meetings discussed the composition and performance
of the Executive Board and the individual directors. detailed
consideration was also given to the succession of the CFO, who left
the company on 1 September.
The Supervisory Board also assessed its own performance, as well as
that of the committees and the individual members of the Board.
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 principal conclusions concerned the
appointment of a new secretary to the Supervisory Board, who would
also serve as secretary to the company, the strengthening of
knowledge in the company and among its senior executives through an
increase in the number of company visits and more direct engagement
of management development efforts. Increased diversity in a number
of areas, such as gender, international experience, technical/
technological knowledge and age, was placed high on the agenda.
Report of the Supervisory Board
63TenCate annual report 2013 | GOVERnAnCE |
COMMITTEES The Supervisory Board has two committees: the Financial Committee
chaired by Mr Ten Cate and the combined nomination, Remuneration,
Selection and Appointments Committee chaired by Mr Hartman. Their
task is to analyse matters within their specific remit and to prepare
resolutions to be adopted in the plenary meetings of the Supervisory
Board. Mr deiters was succeeded by Mr Hartman as chairman of the
combined nomination, Remuneration, Selection and Appointments
Committee in 2013.
Financial Committee
The Financial Committee met with the Executive Board of TenCate on
four occasions in 2013. As preparation for the regular meetings of the
full Supervisory Board, these meetings discussed in detail the 2012
annual figures, the 2013 first-quarter figures, the 2013 half-yearly
figures, the 2013 third-quarter figures and the 2014 budget. A number
of meetings were combined with meetings of the Supervisory Board.
Consideration was also given to a number of specific subjects during
the meetings. particular attention was devoted to the impairment
tests, debt and working capital, the tax position, risk management and
claims, the management letter from the external auditor and the
follow-up to his recommendations.
Combined Nomination, Remuneration, Selection and
Appointments Committee
The Remuneration Committee met on three occasions in 2013,
considering matters such as the current remuneration policy. The aim
was to bring the current Executive Board remuneration policy more
closely into line with pay in companies of similar type and size. In the
view of the Supervisory Board, this would take proper account of the
quality of the performance rendered. It was decided to leave the
Executive Board remuneration policy unchanged pending the results of
a new external evaluation, based partly on an updated peer group. The
remuneration of the Executive Board will be clearly positioned as the
upper end of the pay pyramid of the entire company.
Corporate social responsibility
The Supervisory Board is delighted with the Executive Board’s
development of policy on corporate social responsibility.
The Supervisory Board also held discussions with the external auditor
independently of the Executive Board on two occasions. These
discussions did not give rise to any particular measures.
The Supervisory Board met in full on all occasions.
during the joint meetings, the Supervisory Board considered matters
such as the strategy of the sectors within TenCate, the SWOT
analyses, risk management, proposed acquisitions, the valuation of
TenCate’s balance sheet and the developments concerning recent
acquisitions. The Supervisory Board made visits to operating
companies in denmark, France and the netherlands.
TenCate’s financial results were discussed on a quarterly basis. The
figures for the first half of 2013 were discussed in the presence of
KpMG, the external auditor. particular consideration was given to the
company’s debt, investments and working capital each quarter.
Representatives of the Supervisory Board also attended consultative
meetings of the Central Works Council. They participated in the
discussions and took note of the activities and events within the
company.
CORPORATE GOVERNANCEThe 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 of the company. These variations and the
associated interpretations better reflect the company’s operating
methods. The variations applied by TenCate can be viewed on the
company’s website.
INDEPENDENCEThe Supervisory Board considers all its members to be independent
within the meaning of best-practice clause III.2.2 of the Corporate
Governance Code.
no shares or options of Royal TenCate are held directly or indirectly by
any members of the Supervisory Board.
64 | TenCate annual report 2013 | GOVERnAnCE
. Report of the Supervisory Board
The members of the Executive Board were not granted any salary
increase in 2013, nor any variable salary component (in respect of the
2012 financial year).
The full report can be found on the website under Corporate
Governance documents. The remuneration of the Executive Board
appears in note 54.2 on page 142 of this report.
COMPOSITION OF THE EXECUTIVE BOARDMr Cornelese left the company on 1 September. We are grateful to Mr
Cornelese for his effort and commitment on behalf of TenCate over the
past years.
After extensive deliberations and assessments of various candidates,
the Supervisory Board, in consultation with the Executive Board,
resolved to propose Mr Eef Bos for appointment as a member of the
Executive Board and as CFO for a term of four years at the General
Meeting of 17 April 2014. Mr Bos was appointed as Corporate director
of Finance with effect from 1 July 2013, in which capacity he also
performed the duties of CFO on a temporary basis.
The Supervisory Board wishes to express its sincere gratitude to the
management and employees of TenCate for their commitment and
performance during 2013.
Almelo, 26 February 2014
Supervisory Board
J.C.M. Hovers, Chairman
p.p.A.I. deiters, Vice-Chairman
E. ten Cate
p.F. Hartman
REMUNERATION POLICYPrinciples 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 management 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 reflect the strategic and financial objectives
and be to a large extent performance-oriented, with a proper
balance between short- and long-term results and objectives; ■■ The remuneration must not include any incentives which give rise
to behaviour promoting personal interests in conflict with the
company’s interests;■■ An annual scenario analysis is drawn up with regard to the possible
outcomes of the remuneration policy.
Remuneration report
The 2013 remuneration report, including the plan to develop a new
remuneration policy, has been published 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 2013. In the case of the CEO, Hay level 30 is applied. The variable
remuneration component payable for target-level performance is 50%
of the fixed salary. This is also the maximum level. Under the prevailing
scheme, Mr de Vries was granted 60,000 options with an exercise
price of € 17.73.
For the CFO in office until 1 September 2013, a fixed annual salary at
Hay level 26 was applied, with a variable salary component up to a
maximum of 40% of the fixed salary. Under the prevailing scheme,
Mr Cornelese was granted 40,000 options with an exercise price of
€ 17.73. The option rights granted to Mr Cornelese lapsed upon his
departure from the company.
65TenCate annual report 2013 | GOVERnAnCE |
Corporate 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 financial 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 profile of the members of the Supervisory Board is first
discussed at the General Meeting of Shareholders at the time of
adoption and on each subsequent modification;■■ The General Meeting of Shareholders and the Central 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.
66 | TenCate annual report 2013 | GOVERnAnCE
TenCate rolls out orange carpet for embassies
The embassies of the netherlands in Abu dhabi,
Beijing, london, Oman, paris, Tokyo and Washington
rolled out an orange carpet on Tuesday 30 April 2013.
The dutch embassies in Indonesia, Russia and dubai
and the consulate-general in Hong Kong followed
soon afterwards. The occasion was the coronation
on 30 April of that year. Each carpet was hand-
made by GreenFields using textured polyethylene
monofilament orange and white synthetic turf fibres
from TenCate Grass. The two-by-four-metre carpet
is suitable for outdoor use, as the synthetic turf
fibre is UV-stabilised and colourfast. Each carpet
bears the coat of arms of the dutch government.
These diplomatic representations have taken on an
economic role, so there is increasing contact with the
embassies and consulates general in these countries.
67TenCate annual report 2013 | pERFORMAnCE |
Report of the Executive Board 68
Sector revenues and results 72
PERFORMANCEIn Performance the company provides a commentary on the results achieved during the reporting year
68 | TenCate annual report 2013 | pERFORMAnCE
REVENUESRevenues declined by 4% to € 1,012 million in 2013 (organic decrease
of 3%). The currency effect (particularly the decrease in the value of
the US dollar against the euro) had a negative impact of 2% on
revenues. The effect of acquisitions / divestments amounted to 1%.
The decrease in revenues was almost entirely attributable to the lower
revenues generated in defence markets. The continued decline in
demand from the US Army for TenCate defender™ M products was
largely responsible for this decrease. The focus on growth in private
markets resulted in a 7% increase in these market segments. Growth
was achieved particularly in the TenCate Advanced Composites market
Report of the Executive Board
2013 ANALYSIS BY SECTOR
in millions of euros
2012* 2013 difference organicof which currency
acquisi-tion/
divestment
Net revenues
Advanced Textiles & Composites 460.6 427.8 – 7% – 8% – 2% 3%
Geosynthetics & Grass 518.7 517.8 0% 2% – 2% 0%
Other activities 69.7 66.4 – 5% – 3% – 2% 0%
1,049.0 1,012.0 – 4% – 3% – 2% 1%
Operating result before amortisation (EBITA)
Advanced Textiles & Composites 23.5 21.3 – 9% – 10% – 3% 4%
Geosynthetics & Grass 31.5 27.9 – 11% – 10% – 1% 0%
Other activities – 4.9 – 0.5 90% 91% – 1% 0%
50.1 48.7 – 3% – 3% – 2% 2%
Amortisation – 14.5 – 13.1
Operating result (EBIT) 35.6 35.6 0%
net financial expenses – 12.1 – 10.1
Result before profit tax 23.5 25.5 9%
profit taxes – 8.2 – 8.5
Results from ordinary operations after profit tax 15.3 17.0 11%
net result from associated companies – 0.3 0.1
non-controlling interest – 5.9 – 1.9
Net income 20.9 19.0 – 9%
* Adjusted for accounting policy change in pension system.
EBITA margins 2012 2013
Advanced Textiles & Composites 5.1% 5.0%
Geosynthetics & Grass 6.1% 5.4%
Consolidated 4.8% 4.8%
69TenCate annual report 2013 | pERFORMAnCE |
group. Revenues in the industrial market for protective fabrics also
developed positively.
Revenues in the Advanced Textiles & Composites sector declined by
7% to € 428 million. In organic terms, these revenues declined by 8%.
The currency effect was –2%. Acquisitions and divestments,
particularly the acquisition of Amber Composites at the beginning of
2013, increased revenues by 3%.
Revenues in the Geosynthetics & Grass sector remained almost
unchanged overall. In organic terms, revenues rose by 2%. The
currency effect was –2%. The Grass group recorded slight growth,
whereas revenues in the Geosynthetics group fell short of
expectations. The Asian markets showed the first decrease in demand
for many years. There was also a decline in large public-sector
infrastructure projects in these markets. After an initially mediocre
start to the year due to the persistent winter weather, revenues in the
United States and Europe picked up during the year.
Revenues from other activities declined by 5% (organic –3%; currency
effect –2%). Xennia Technology, under a partly new management
team, reviewed its business portfolio in 2013, switching the focus to
activities generating high added value. This resulted in lower revenues
but a strong improvement in results.
TenCate Enbi’s revenues held steady. The company was successful in
obtaining new qualifications.
OPERATING RESULT BEFORE AMORTISATION AND NET PROFITCost savings were insufficient to compensate fully for the further
decline in defence revenues. The operating result before amortisation
of intangible assets (EBITA) decreased to € 48.7 million. This amount
includes € 5.9 million of non-recurring costs, mainly in TenCate
protective Fabrics.
normalised EBITA, taking into account the aforementioned
non-recurring costs, amounted to € 54.6 million (2012: € 58.1 million
before € 8.0 million of non-recurring costs).
EBITA in the Advanced Textiles & Composites sector declined by 9% to
€ 21.3 million (2012: € 23.5 million). In organic terms, EBITA declined by
10%. The currency effect was –3%. The effect of acquisitions and
divestments amounted to +4%. ■■ The further decline of revenues from TenCate defender™ M had a
considerable impact on the result of the TenCate protective Fabrics
market group.■■ despite the decline in revenues from vehicle armour projects, the
TenCate Advanced Armour market group achieved higher EBITA as
a result of cost measures. ■■ TenCate Advanced Composites achieved a higher result due to a
good performance in the space market.
EBITA in the Geosynthetics & Grass sector declined by 11% to € 27.9
million. In organic terms, EBITA declined by 10%. The currency effect
was –1%.■■ The decrease in EBITA was mainly caused by the TenCate
Geosynthetics market group. The year got off to a difficult start due
to persistent winter weather. In Asia, revenues declined due to a
decrease in the project market (infrastructure). Higher prices in the
commodities market also had a temporary negative effect on
margins.■■ The improvement in results in the Grass group stagnated due to
temporarily high marketing costs associated with the market
launch of new synthetic turf systems and volatile raw material
costs.
EBITA in the Other Activities sector improved considerably to –€ 0.5
million (2012: –€ 4.9 million). This improvement in results was mainly
attributable to the change of strategy at Xennia Technology.
EBIT remained steady at € 35.6 million in 2013.
The Group’s net profit amounted to € 19.0 million in 2013 (2012: € 20.9
million). The decrease in profit was mainly due to the loss of a
considerable part of the defence revenues. These revenues have
above-average margins due to the high-quality nature of these
products.
70 | TenCate annual report 2013 | pERFORMAnCE
. Report of the Executive Board
WORKING CAPITALWorking capital decreased by € 7.0 million in 2013 compared to 2012,
as a result of a decrease in revenues. The working capital measured in
days remained unchanged at 93.
in millions of euros 2012 days 2013 days
Balance at end of
previous year 277.1 93 237.4 93
Acquisitions /
(divestments) 0.4 –1.2
Organic increase /
(decrease) –39.3 7.9
Exchange rate differences –0.8 –13.7
Balance at end of year 237.4 93 230.4 93
INVESTMENTSA restrained investment policy was conducted in 2013. Total
investments in 2013 amounted to € 14.4 million (2012: € 16.6 million).
The level of investments rose considerably in the second half of the
year compared to the first half.
in millions of euros 2012 2013
Tangible fixed assets 12.0 9.8
development costs and other intangible assets 4.6 4.6
16.6 14.4
The main investment projects in 2013 were:■■ development costs of TenCate Advanced Armor USA: TenCate
ABdS™ active blast countermeasure system■■ TenCate Grass: texturisation capacity■■ TenCate protective Fabrics USA: replacement of machine■■ ERp systems of TenCate Advanced Composites and TenCate
Advanced Armor USA.
COMPOSITION OF THE COMPANYThe following companies were acquired and interests increased in
2013:■■ TenCate acquired Amber Composites ltd of the United Kingdom in
January 2013. Amber is a British producer of thermoset composites
for industry and the automotive market.■■ The interest in TigerTurf in TenCate Grass was increased from 80%
to 100% in February 2013.■■ The interest in Xennia Technology was increased from 78.95% to
90.88% in May 2013.
PERSONNEL COSTSThe number of staff years (excluding temporary personnel) decreased
from 4,454 to 4,256 at the end of 2013. The largest reduction was in
TenCate protective Fabrics. personnel costs amounted to € 217.6
million (2012: € 215.4 million).
TAXESThe effective tax rate decreased from 34.9% to 33.3% in 2013. The
decrease is due particularly to lower losses in countries in which no
full deferred tax assets are recognized.
The decrease in the weighted average tax rate from 31.1% to 30.6% is
due in particular to changes in the various countries’ share in the
result before profit tax. Compared to 2012, a smaller share of the
result was generated in countries with relatively high tax rates in
2013.
71TenCate annual report 2013 | pERFORMAnCE |
CASH FLOW AND FINANCINGThe cash flow from operating and investing activities decreased to
€ 42.6 million in 2013. This was mainly due to the lower movement in
working capital compared to 2012.
in millions of euros 2012 2013
Result after profit tax and associated companies 15.0 17.1
depreciation 37.1 34.8
Amortisation 14.5 13.1
Other items 13.7 18.7
Cash flow before increase/decrease in working
capital 80.3 83.7
Increase/decrease in working capital 38.3 13.5
Interest paid/taxes paid –16.8 –22.1
Cash flow from operating activities 101.8 75.1
Investments –16.6 –14.4
divestments 0.3 0.8
Acquisitions –15.7 –22.2
deconsolidation – 4.2
Other items –1.4 –0.9
Cash flow from operating and
investing activities 68.4 42.6
TenCate in strategic alliance with BASF and Owens Corning
BASF, Owens Corning and TenCate are jointly
focusing on the large-scale use of thermoplastic
composites in the automotive industry. Collaboration
in the value chain is necessary for two reasons: to
develop and introduce automated process
technologies in this industry and to set standards
in new materials. The aim is to develop optimum
solutions in thermoplastic composites for mass
production in the automotive industry. Auto
manufacturers are increasingly interested in
industrial applications for light, strong, energy-
efficient and cleaner solutions, such as composites.
Composites contribute to weight-saving in vehicles
and hence lower CO2 emissions.
72 | TenCate annual report 2013 | pERFORMAnCE
Advanced Textiles & Composites sector
19countries protect army units with
TenCate Defender™ M
4-kilolightweight
aircraft seat withTenCate Cetex® technology
TenCate innovates actively in more than
15 knowledge networks
73TenCate annual report 2013 | pERFORMAnCE |
KEY FIGURES OF ADVANCED TEXTILES & COMPOSITES
in millions of euros unless stated otherwise 2009 2010 2011 2012 2013
Revenues 397.3 448.4 538.4 460.6 427.8
Operating result before amortisation (EBITA) 31.7 43.8 70.3 23.5 21.3
EBITA margin (%) 8.0 9.8 13.1 5.1 5.0
Operating result (EBIT) 27.0 38.6 64.7 18.5 15.0
Investments 4.2 4.5 8.3 9.4 7.8
depreciation and amortisation 14.2 15.2 15.3 15.7 16.6
net invested capital (year-end) 234.0 281.7 314.3 286.5 284.6
number of staff years (year-end) 1,340 1,519 1,582 1,697 1,542
EBITA as percentage of average net invested capital 12.0 16.7 23.6 7.5 7.9
Revenue growth of 12% was recorded in the industrial market for
protective fabrics (TenCate Tecasafe® plus). The strengthening of
marketing and sales in the TenCate protective Fabrics market group,
focused on the end-markets, began to deliver benefits.
The TenCate Advanced Composites market group recorded revenue
growth of 16% in 2013. The market for space composites showed
strong growth and TenCate made good progress with composites for
the latest generation of aircraft.
After the successful acquisition of Amber Composites in January 2013,
the first successes were recorded in the development of composites
for the Formula 1 market and the automotive industry. Important
commercial and strategic alliances were also announced in this
market. TenCate is confident that demand for new material solutions
will increase strongly in the future.
TenCate Advanced Armour recorded increased revenues in the market
for personal ballistic protection (antiballistic vests, inserts, helmets
and screens). The market group developed a new portfolio of
lightweight protection products aimed at the police market (law
enforcement).
Sustainable innovation is one of the pillars underpinning TenCate’s
strategy. Technological progress was made in July on the basis of the
defined technology roadmap with the commissioning of the first
machine based on digital inkjet technology for TenCate protective &
Outdoor Fabrics.
REVENUES AND RESULTS OF THE ADVANCED TEXTILES & COMPOSITES SECTORThe Advanced Textiles & Composites sector recorded a 7% decline in
revenues to € 427.8 million in 2013 (2012: € 460.6 million). The sector’s
operating result before amortisation (EBITA) recorded a larger
decrease in relative terms, declining by 9% to € 21.3 million. The EBITA
margin of the Advanced Textiles & Composites sector amounted to
5.0% (2012: 5.1%). EBITA as a percentage of the average net invested
capital amounted to 7.9% (2012: 7.5%).
The decrease in revenues was mainly due to lower revenues from the
defence market. The revenues of the Advanced Textiles & Composites
sector in this end-market declined by 40% in 2013. The decline was
reflected in the lower revenues from TenCate defender™ M and the
lower revenues from armour composites for vehicles in Europe and the
United States. lower government expenditure had a negative impact
on defence budgets in the countries of importance to TenCate. In the
United States, the defence budget was even subjected to an automatic
cut in 2013 after prolonged uncertainty surrounding the government
budget. This market development was unrelated to the company’s
continued strong market positioning and the positive developments in
the TenCate ABdS™ active blast countermeasure system. demand for
new developments in vehicle protection will ultimately be high, partly
having regard to recent experiences in war zones. TenCate is therefore
well positioned for upgrade and new vehicle programmes.
74 | TenCate annual report 2013 | pERFORMAnCE
. Advanced Textiles & Composites sector
Revenues from TenCate Tecasafe® plus rose strongly particularly in
Asia and the EMEA region. The strengthening of the sales
organisation, focused on new markets, led to a strengthening of the
market position and revenue growth.
In Asia, the activities of the TenCate-Union protective Fabrics joint
venture in Thailand were discontinued, with a negative impact on
revenues and results.
The relatively low cotton price in 2013 resulted in a large supply of
competing finished cotton products in markets of relevance to
TenCate. The lower cotton price had a negative impact on the
profitability of the entire TenCate protective & Outdoor Fabrics market
group. Finished cotton products provide less protection and have
shorter service lives. End-users often purchase them purely on the
basis of price.
PERFORMANCE OF THE TENCATE PROTECTIVE FABRICS & OUTDOOR FABRICS MARKET GROUPThe revenues and profitability of the TenCate protective Fabrics &
Outdoor Fabrics market remained under pressure throughout the year,
particularly as a result of lower revenues in the defence market in the
United States and a relatively low cotton price in the world market.
The TenCate protective Fabrics & Outdoor Fabrics market group
generated 63% of its revenues in the Americas. The American defence
market, which is immensely important to TenCate, faced automatic
budget cuts (sequestration) at the beginning of 2013, resulting in a
7.9% cut in the defence budget for that year. The sequestration had a
major negative impact on US Army demand for TenCate defender™ M
after the first quarter. Although a large number of countries have
qualified TenCate defender™ M and placed initial or repeat orders,
sales in these new markets were unable to reverse the overall sharp
decline in volumes.
The TenCate ABdS™ active blast countermeasure system is in the test
phase. In this context, modest revenues were recorded.
Business development activity, particularly in digital printing,
automotive composites and the TenCate ABdS™ active blast
countermeasure system, led to certain costs being incurred in 2013
without any significant countervailing revenues. Some of the business
development costs were not capitalised and therefore depressed the
EBITA of the Advanced Textiles & Composites sector. These
developments are nevertheless expected to make an important
contribution to results in the future.
TENCATE PROTECTIVE FABRICS & OUTDOOR FABRICS
ProtectiveFabricsArmourCompositesSpace /AerospaceComposites
61%17%
22%
56%
16%
28%
2012 2013
IndICATIVE BREAKdOWn OF REVEnUES In THE AdVAnCEd
TEXTIlES & COMpOSITES SECTOR
GEOGRApHIC REVEnUES
REVEnUES By CUSTOMER GROUp
(IndICATIVE)
REVEnUES By End-MARKET
(IndICATIVE)
America
EMEA
Asia Pacific63%
6%
31%2013
Governmental
Non-governmental
39%
61%
2013
Personal protectionDefence
Sport & leisure74%
20%
6%
2013
75TenCate annual report 2013 | pERFORMAnCE |
DEFENSE & TACTICALTenCate’s revenues in the defense & Tactical end-market decreased
sharply in 2013, despite a good first quarter, as a result of contracting
defence expenditure, mainly in the United States and Europe. There
nevertheless remains an important focus on the protection of military
personnel in the defence industry. TenCate defender™ M, TenCate’s
most important protective fabric for the defence industry, has
patented, inherently heat and flame-resistant characteristics which
will not wash out or wear off, combined with cost-efficient pricing.
European defence budgets reached their lowest level in the last 10
years in 2013. In the wake of the financial crisis, European
governments were faced with the need to make sustained spending
cuts. The number of countries which have qualified TenCate
defender™ M rose further in 2013. An important breakthrough was
achieved in South America with the order for the Colombian air force
in collaboration with Complementos Industriales ltda.
The number of armed forces which have included TenCate
defender™ M in their standard personal equipment also increased in
2013. TenCate has supplied TenCate defender™ M to 19 different
countries. The list of wearing trials by different international armed
forces remains long, but growth is expected to be moderate due to the
geographic fragmentation of the market. The US Army nevertheless
remains the largest potential market, in view of its size.
EMERGENCY RESPONSERevenues in the emergency response end-market remained at a level
comparable to those of the previous year in 2013. The firefighting
market in the United States, traditionally the most important market
for TenCate in this market segment, remained sluggish as a result of
savings, mainly by local authorities. With the TenCate Tecasystem™
and TenCate Tecashield®, TenCate supplies all components of
firefighters’ clothing: the outer layer, the moisture-regulating inside
layer, thermal protection fabric, thermal lining and reinforcement
fibres. TenCate is responding to the government cost-cutting trend by
offering cost-effective products with comparable or higher protection
than more expensive traditional products.
TenCate is the market leader in the firefighting market in the United
States. Together with European partners, TenCate is also mobilising
this expertise to raise the level of protection for firefighters in other
geographic markets. For example, in addition to successes elsewhere
in Europe, an order was received at the beginning of 2013 from two
fire brigades in the netherlands involving the use of TenCate Millenia
light™ from the TenCate Tecashield® collection. As part of end-user
marketing, various study days were organised to inform fire brigades
about the possibilities offered by TenCate in this market.
progress was also made in Asia, where an order was won in Thailand
from the Bangkok fire brigade. TenCate maintained its strong position
with the Australian Wildland firefighters. An order was also received
in Kuwait for the supply of protective fabrics for 20,000 new uniforms
for the brigade’s officers and firefighters. The use of TenCate
Tecasafe® plus by firefighters in Kuwait demonstrates the growing
demand for this product outside the industrial market. Wearing
comfort is an important decision factor, particularly in the heat of the
desert.
TenCate’s portfolio of protection products is so broad that it can meet
specific local conditions and market requirements worldwide.
dEplOyMEnT OF MIlITARy pERSOnnEl By THE UnITEd STATES
Afganistan
Iraq
0
50
100
150
200
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Iraq Afghanistan
x 1,000
Source: US dept. of defense
76 | TenCate annual report 2013 | pERFORMAnCE
. Advanced Textiles & Composites sector
Sales activity for TenCate Tecasafe® plus was also intensified in the
Asian markets, where revenues grew mainly in the oil and gas
industry.
OUTDOOR TenCate Outdoor Fabrics develops and produces tent cloth and
awnings and operates particularly in the European leisure and tent
hire market. TenCate focuses particularly on the upper market segment
and the professional market. Thanks to end-user marketing combined
with TenCate’s strong brand position, strong revenue growth was
achieved in 2013.
Innovations based on digital production processes are intended to
introduce a completely new customer-specific business concept
enabling the entire value chain to undertake a major renewal process.
This is reflected not only in new products, but also a new customer
approach, potential for e-commerce and mass customisation.
SUSTAINABILITYThe CSR performance ladder certificate of the TenCate protective
Fabrics market group in the netherlands was extended at level 3 in
2013. A series of stakeholders from the value chain were involved in
an ongoing dialogue at the time of implementation in 2012. discussions
also took place on customer satisfaction and regular contacts were
maintained concerning good practice in 2013. The required actions
were defined by the management. The plan-do-Check-Act cycle is
being implemented for three years in respect of all 33 CSR indicators.
These indicators have been classified under one of the seven key CSR
themes in the ISO 26000 guideline. For many years this market group
has operated a code of conduct to be signed by foreign suppliers in the
value chain, aimed at combating child labour, breaches of human rights
and corruption as well as to ensure compliance with local laws and
regulations. This is fully in line with IlO conventions and Un
declarations. The validity of the signed declarations was confirmed on
site with a number of suppliers in countries such as pakistan. no
breaches of this TenCate protective Fabrics code of conduct were
recorded in 2013.
INDUSTRIAL SAFETY AND WORKWEARThe Industrial Safety market is the most important end-market of the
TenCate protective Fabrics and Outdoor Fabrics market group. The
products provide protection for personnel in industry. TenCate’s
revenues in this end-market declined slightly in 2013, despite a
growing worldwide market share for TenCate Tecasafe® plus in this
market and new product launches.
The strengthening of the sales organisation is one of the factors
underpinning the success of TenCate Tecasafe® plus. product
characteristics such as the wearing comfort, durability and safety of
this protective fabric are usually seen as key advantages by industrial
customers. The main industries in which TenCate Tecasafe® plus is
used for personnel protection are the oil and gas, chemical,
petrochemical and metal industries.
TenCate supplies composites for Airbus A350 XWB
The Airbus A350 XWB made its first official flight on
Friday 14 June 2013. This aircraft comprises 53%
composites. By comparison, the A340 and the A380
comprise 15% and 23% composites respectively.
The fuselage of the Airbus A350 is held together with
thousands of clips made of TenCate thermoplastic
composites. Fokker Aerostructures manufactured the
wing valves. There are five different versions of the
A350 family, ranging in length from 60.5 to
73.8 metres. The wing span is 64.0 metres.
77TenCate annual report 2013 | pERFORMAnCE |
TenCate protective Fabrics in nijverdal started using the 5S lean
management method for optimum quality in processing in 2013. This
will lead to further quality improvements, shorter completion times,
cost reductions and increased safety in this market group. The
‘Excellence performance’ project has led to a new logistical
management concept which will ultimately contribute to lower
inventories. Eco-Tl lighting was also installed, the compressor air was
reduced and the steam traps were optimised.
The first digital inkjet machine for printing and finishing entered
service in June 2013, initially for the awning products of TenCate
outdoor fabrics. This innovative production method delivers a steep
reduction in energy, water and chemical consumption.
The introduction of environmentally responsible fibres has greatly
reduced the antimony content of wastewater. This is beneficial for
wastewater processing within TenCate. These environmentally
responsible fibres were successfully incorporated in numerous
products in the industrial clothing market in 2013 under the TenCate
Tecasafe® plus brand name. A concept was developed with partners
during the past year for the recycling of fibres as part of the ‘closing
the loop’ initiative.
The company emergency personnel in the nijverdal market groups
were trained and given additional instruction where necessary last
year. The combined production sites in nijverdal-noord have been
using green electricity since the beginning of 2013, considerably
reducing the CO2 footprint of these sites. These dutch TenCate
businesses jointly conducted an employee satisfaction survey and an
employee health survey in 2013. Action points were defined on the
basis of the results. An age-aware personnel policy was also jointly
formulated. These business units also jointly played an active part in
the TenCate Talent program, as part of the corporate HR policy in the
TenCate people program. Finally, these market groups in nijverdal
organised wearing trials for the purchase of new industrial clothing for
all these production sites.
Ballistic protection for Daimler Zetros GLF
TenCate Advanced Armour has been selected as a
supplier to daimler AG for the ballistic protection of
the daimler Zetros GlF. Hundreds of these trucks are
being supplied to the German army. TenCate
Advanced Armour developed the kits (a pack of
protective panels) jointly with daimler. This resulted
from the strategic decision to supply to major
customers in the automotive industry. The protective
panels supplied by TenCate Advanced Armour were
fixed to the front and sides of the cab. The market
group also supplied spall-liners for the interior of the
cab to protect the crew against splinters from the
armour caused by projectile strikes. Spall-liners add
only minimal weight to the vehicle and thus have
limited impact on the manoeuvrability, speed and
operating range.
78 | TenCate annual report 2013 | pERFORMAnCE
. Advanced Textiles & Composites sector
PERFORMANCE OF THE TENCATE ADVANCED COMPOSITES MARKET GROUPThe TenCate Advanced Composites market group recorded revenue
growth of 16% in 2013, coupled with increasing profitability. The
space market was the principal pillar supporting this growth. The
increase in revenues is due partly to the strategic acquisition of the UK
company Amber Composites, which was announced in January 2013.
Amber Composites is a producer of thermoset composites for the
industrial and automotive markets. The acquisition of Amber
Composites led to an acceleration of activities in the European market
in the field of thermoset composites, alongside the existing production
of thermoplastic composites. TenCate had hitherto been active in
thermoset composites predominantly in the United States. The supply
lines to users of these materials have to be short, so TenCate had an
interest in starting production additionally in Europe. The acquisition
of Amber Composites therefore represents an important geographic
expansion and brings greater balance to TenCate’s portfolio, in terms
of geography, technology and product portfolio. The results of Amber
Composites in 2013 were in line with forecasts made at the time of the
acquisition.
A slight decline in revenues was recorded in the market for composites
for the aviation industry. After a delay in the first half of the year as a
result of technical problems surrounding the market launch of aircraft,
revenues improved in the second half.
The market for space composites continued to develop strongly.
TenCate occupies a strong position in this market, particularly in the
United States.
progress was made in the development of the market for automotive
composites with the announcement of various joint ventures. The
development of new materials and new production processes will take
a number of years to generate significant revenues in this market.
Revenues in this segment began to flow in the Formula 1 and sports
car markets in particular in 2013. TenCate can continue to build on
these initial market positions to achieve the intended growth in this
market segment.
AEROSPACE COMPOSITESRevenues from composites for the aviation industry decreased in 2013
as a result of temporary delays in the value chain in the first half of the
year. After lengthy delays in supplies for the Airbus A380 and A350
and the Boeing 787 in 2012 and early 2013, revenues increased in the
second half of the year.
The Airbus A350 is of great importance to TenCate, in view of the
quantity of material used in a single aircraft. TenCate supplies material
for thousands of clips to connect the fuselage sections. The successful
test flights of the Airbus A350 since the summer of 2013 and the
Airbus order book currently comprising more than 800 aircraft
(combined A350 800/900/1000 order book) provide grounds for
confidence in future revenues for this type of aircraft for TenCate.
TENCATE ADVANCED COMPOSITES
GEOGRApHIC REVEnUES
REVEnUES By CUSTOMER GROUp
(IndICATIVE)
REVEnUES By End-MARKET
(IndICATIVE)
America
EMEA
Asia Pacific63%
8%
29% 2013Governmental
Non-governmental
22%
78%
2013PersonalprotectionMobility
99%
1%
2013
79TenCate annual report 2013 | pERFORMAnCE |
Composites were supplied for the Falcon 9 rocket for SpaceX. The
Falcon 9 is a two-stage rocket developed by SpaceX and built for the
safe and reliable transportation of satellites and the dragon space
capsule. SpaceX is the first commercial company to reach the
International Space Station (ISS). A thermoset composite frame was
produced for the heat shield on the Curiosity Mars lander. Composites
were supplied for the Mars Atmosphere and Volatile Evolution
(MAVEn) space probe for lockheed Martin.
AUTOMOTIVE COMPOSITESThe introduction of thermoplastic composites in the automotive
industry is an important business development for the future in the
TenCate Advanced Composites market group. Under pressure from the
European Commission, CO2 emission standards have to be reduced by
40% in 2020 compared to the 2007 level. This legislation compels
automobile manufacturers to seek weight savings. Compared to
traditional materials, composites are 30-50% lighter and therefore
ideal for achieving such savings.
The acquisition of Amber Composites has given TenCate accelerated
access to the automotive market, particularly for sports cars and
motor racing. Thermoset composites are used almost exclusively in
these markets. In contrast to these materials, thermoplastic
composites, a technology in which TenCate has occupied a leading
position in the aviation market for over 30 years, are ideal for use in
serial production. A major obstacle which must be overcome is the
adaptation of the product chain for structural and other components,
since companies are not yet geared to processing this type of material.
In March 2013, BASF and TenCate welcomed the glass fibre
reinforcement manufacturer Owens Corning as a partner in the
strategic alliance for thermoplastic automotive composites. The aim of
this collaboration is to develop optimum solutions in thermoplastic
composites for mass production in the automotive industry. This
solution-focused approach from different technological perspectives is
necessary in order to support and supervise the introduction of fibre-
reinforced thermoplastics in all parts of the automotive industry.
The Airbus A350 comprises over 50% composites. By comparison,
composites in the A340 and A380 make up 15% and 23% respectively.
The next generation of aircraft is expected to have an even higher
percentage of composites. The further increase in the use of
thermoplastic composites in the aircraft industry, particularly for
Airbus, was emphasised with the extension of the Thermoplastic
Affordable primary Aircraft Structure (TApAS) consortium in June.
This joint venture linking eight dutch companies and institutions in the
aviation industry produced an innovative fuselage panel for Airbus
made of TenCate Cetex® thermoplastic composites.
A long-term agreement was signed with Fokker Aerostructures in June
for the supply of thermoplastic composites. The material is being
supplied to Fokker for use in the production of components for Airbus,
Boeing, Gulfstream, dassault and AgustaWestland. new initiatives
were developed in 2013 outside the long-term contracts for the
construction of the aircraft in which TenCate has been involved since
the design stage. The ice protection panels for the Airbus A400 will be
manufactured using TenCate Cetex®.
The revenues of TenCate’s production facilities in the United States
increased in 2013. The increasing availability of communication
services during passenger flights, particularly in the United States, led
to high demand for radomes manufactured from thermoset composites.
The order book for the Boeing 787 (787-8/9/10), which is important to
TenCate, now exceeds 900 aircraft.
In China, further steps were taken in collaboration with local parties in
the aviation industry in the development of thermoplastic composites
in new Chinese-made aircraft. At the beginning of 2014, a marketing
and development agreement was signed with Shanghai leadgo-tech
to support the market for composites for the Chinese aviation industry.
SPACE COMPOSITESdemand from the space industry increased strongly in 2013. From its
production site at Morgan Hill in the United States, TenCate supplies a
wide range of advanced composites for the space industry, including
high-quality prepregs for space structures to moulding compounds for
use in fibre-reinforced injection-moulded components.
80 | TenCate annual report 2013 | pERFORMAnCE
. Advanced Textiles & Composites sector
In September 2013 TenCate signed an initial co-operation agreement
with Kringlan Composites to develop solutions for the manufacture of
components based on thermoplastic composite technology. The main
development which Kringlan Composites has initiated at present is the
design and development of a fully carbon-reinforced composite wheel
for vehicles in the upper segment. Such a wheel has a great weight-
saving effect and reduces the unsprung mass of the vehicle.
The co-operation was also entered into to support the market launch.
The product was still in the demonstrator phase at the end of 2013.
Kringlan Composites expects market release in 2014, after completion
of all the necessary safety tests by automobile manufacturers.
According to Kringlan Composites, limited serial production is possible
approximately one year after market release. The solution developed
by Kringlan will be the first series-produced composite wheel. It may
also mark the introduction of TenCate thermoplastic composites in
serial production in the automotive sector. The wheel currently fulfils
standard safety and integrity requirements in terms of material stress.
TenCate is also involved in a number of other projects (demonstrators)
which should make their way into new types of vehicle in the future.
INDUSTRIAL COMPOSITESThe uses of thermoset and thermoplastic composites outside the
above areas of application developed positively in 2013. progress was
made in the use of thermoplastic composites for pipelines in the oil
and gas industry. The first steps were taken in the market for consumer
electronics. Composites were also supplied to the sports market
through pMC Baycomp, which was acquired in 2012.
Tooling is also an attractive market for composites. TenCate focuses
on the production of composites for moulds (tooling) used in a wide
range of manufacturing processes, including in the aircraft and
automotive industries. A joint venture was entered into with a local
partner in China in 2013. An alliance was entered into with 3M in the
United States for the American tooling market.
Growth in the industrial composites market is expected to continue at
a rapid pace from a still modest level in the TenCate portfolio.
JEC 2013 Innovation Award
In March 2013 the prestigious JEC Innovation Award
was presented to the partners Fokker Aerostructures,
AgustaWestland, TenCate Advanced Composites
and Ticona GmbH at the JEC Composites Show
in paris for the first horizontal tailplane made of
thermoplastic composites for the AgustaWestland
AW 169, a new-generation helicopter. The value of
the innovation lies primarily in a 15% weight saving
compared to other composite solutions, resulting
in lower nOx and CO2 emissions and lower fuel
consumption.
The development of the horizontal tail began in
July 2011. Four AW169 helicopters were equipped
with a new horizontal tail towards the end of 2012.
The weight saving was achieved through the rigidity
of the thermoplastic material. Fokker has designed
and developed this integrated solution as a single-
component torsion box. The production time and
costs were reduced by the use of simple preforms.
AgustaWestland expects the new AW169 to be
highly successful in the business market.
81TenCate annual report 2013 | pERFORMAnCE |
TenCate was selected by Embraer for the design of the ballistic
protection for the Embraer A-29 Super Tucano military aircraft.
TENCATE ABDS™ ACTIVE BLAST COUNTERMEASURE SYSTEMA major focus of the development of new product-market-technology
combinations is the TenCate ABdS™ active blast countermeasure
system. This system is a cost-effective solution which can dramatically
reduce the impact of a roadside bomb explosion.
Good progress was made with the development of this system during
the reporting year. In September 2013 a long-term agreement was
signed with the US Army Research, development and Engineering
Command (RdECOM) for collaboration in research and development
(CRAdA).
TenCate presented the TenCate ABdS™ active blast countermeasure
system at the AUSA conference in October.
TenCate is positioning the TenCate ABdS™ active blast
countermeasure system as a survivability solution, potentially in
combination with the existing production of vehicle armour. Orders
being placed with TenCate at present are related to specific testing
programmes. There will be continued demand from armed forces for
improved vehicle protection in the years ahead. new generations of
army vehicles will incorporate lighter solutions than traditional vehicle
armour.
PERFORMANCE OF THE TENCATE ADVANCED ARMOUR MARKET GROUPThe TenCate Advanced Armour market group recorded a 16% decline
in revenues in 2013. Government spending on vehicle armour in
particular was under pressure during the reporting year. This market is
historically the most important market for TenCate Advanced Armour.
TenCate believes in the long-term potential of the market for vehicle
armour, potentially in combination with the TenCate ABdS™ active
blast countermeasure system (survivability solution).
TenCate Advanced Armour was able to offset declining market
demand for vehicle armour in part against increased revenues in the
market for personal protection (law enforcement). The collaboration
with dSM dyneema was intensified for the launch of innovative
products and in the provision of personal protection solutions.
Sales activity was intensified on a geographic level. TenCate Advanced
Armour opened a new marketing and sales office in Singapore to serve
the Asian market more effectively. Since then, new orders have been
received from shipbuilders and vehicle manufacturers in Asia. A three-
year contract was announced with a shipbuilder in Singapore in
September 2013 for the armouring of seagoing vessels for the Middle
East.
The market for aerospace armour solutions developed in line with
expectations. Supplies for Eurocopter recovered somewhat after a
cautious start in 2013.
In the Brazilian market, good progress was made with Embraer.
Aerotron Brazil, the main contractor for the Embraer KC-390 project,
selected TenCate as its technical and industrial partner and as a
supplier of materials and special processes. In november 2013
TENCATE ADVANCED ARMOUR
GEOGRApHIC REVEnUES
REVEnUES By CUSTOMER GROUp
(IndICATIVE)
REVEnUES By End-MARKET
(IndICATIVE)
America
EMEA
Asia Pacific
46%
1%
53%2013
Governmental
Non-governmental
98%
2%
2013PersonalprotectionDefence
50% 50%2013
82 | TenCate annual report 2013 | pERFORMAnCE
. Advanced Textiles & Composites sector
SUSTAINABILITYThe CSR performance ladder certificate of the TenCate Advanced
Composites market group in the netherlands was continued on level 3
at the end of 2013. Stakeholders in the value chain were involved in
the introduction of this CSR management system and regular
consultations took place on good practice last year. The plan-do-
Check-Act cycle is also being implemented in this market group for
three years in respect of all 33 CSR indicators.
After the previous introduction of lean manufacturing for maximum
value generation for customers with as little waste as possible, the 5S
approach continued to be implemented in 2013. This approach
comprises the complete separation, sorting, standardisation,
systematisation and cleaning of production. The previously installed
clean rooms for laminate production are making a major contribution
to optimum production quality.
Further attention was devoted to the recycling of thermoplastic
composites in 2013. This is important partly because numerous new
composites were qualified during the past year. The collaboration with
knowledge institutions in the netherlands, the United Kingdom and
Germany was also intensified, including with the TpRC innovation
centre in Enschede, the University of Sheffield Advanced
Manufacturing Research Centre (AMRC) in Sheffield (United Kingdom)
and the Aachener Zentrum für Integrativen leichtbau in Aachen
(Germany). In the production process in nijverdal, a larger proportion
of the process cooling water was reused, leading to energy savings.
83TenCate annual report 2013 | pERFORMAnCE |
Sector Geosynthetics & Grass
20sustainable drinking water systems for sanitation and
sport in South Africa
14GreenFields® TX
top-flight hockey pitches for2014 Hockey World Cup in
The Hague, the Netherlands
Water Innovation Award
2013 for vertical sand-tight
geotextile to combat piping
84 | TenCate annual report 2013 | pERFORMAnCE
. Sector Geosynthetics & Grass
REVENUES AND RESULTSThe revenues of the Geosynthetics & Grass sector remained almost
unchanged at € 517.8 million in 2013 (2012: € 518.7 million). The
operating result before amortisation (EBITA) declined by 11% to € 27.9
million (2012: € 31.5 million); EBITA as a percentage of the average net
invested capital decreased to 7.0% (2012: 7.3%).
The revenues of the TenCate’s geosynthetics market group declined
slightly, while TenCate Grass showed a slight rise.
Revenues in the infrastructure end-market in the Geosynthetics &
Grass sector declined slightly. Revenues in Asia fell well short of
expectations. The marketing focus on water management and
environmental solutions generated revenue growth, although this
revenue source is still of limited size at present. The Water
Management end-market accounted for 6% of the total revenues of
the TenCate Geosynthetics market group in 2013.
The decrease in the operating result of the Geosynthetics & Grass
sector was mainly attributable to a decrease in profitability of the
TenCate Geosynthetics market group. The unfavourable composition of
revenues and volatile input costs of polyethylene (pE) and
polypropylene (pp) had a negative impact on profitability. The results
in the Grass group were affected by high marketing costs and volatile
raw material costs. The ongoing integration of the downstream
activities had the effect of lowering costs.
KEY FIGURES GEOSYNTHETICS & GRASS
in millions of euros unless stated otherwise 2009 2010 2011 2012 2013
Revenues 392.1 469.3 525.9 518.7 517.8
Operating result before amortisation (EBITA) 16.8 31.4 26.3 31.5 27.9
EBITA margin (%) 4.3 6.7 5.0 6.1 5.4
Operating result (EBIT) 13.8 27.7 20.8 25.1 23.6
Investments 9.0 9.9 12.2 5.3 4.9
depreciation and amortisation 25.3 26.2 28.9 30.7 25.9
net invested capital (year-end) 332.7 380.8 429.5 399.7 369.1
number of staff years (year-end) 1,795 2,128 2,160 2,102 2,034
EBITA as percentage of average net invested capital 4.1 8.2 6.2 7.3 7.0
TREnd In pRICES OF pOlyETHylEnE And pOlypROpylEnE
Polyethy index
Polyprop index
1,000
1,200
1,400
1,600
1,800
13-1-2012 28-6-20134-1-2013
Polyethy index Polyprop index
In US$
85TenCate annual report 2013 | pERFORMAnCE |
The new GreenFields™ MX synthetic turf system had a good
introduction into the market, bringing a clear improvement in terms of
quality and sports characteristics. The market group is supplying
synthetic turf to a growing number of professional clubs in the Jupiler
league in the netherlands. The GreenFields™ MX synthetic turf system
is one of the pillars of the company’s innovation strategy. With the
combination of weaving and extrusion technology within a single
company, a distinctive system has been developed which is fully
recyclable. GreenFields™ MX is being introduced into the United States
in 2014. The production capacity for this unique system is scheduled to
be expanded in 2014, building on this system’s growing revenue
contribution within the total portfolio.
Geosynthetics
Grass upstreamGrass downstream
57%25%
18%
57%25%
18%
2012 2013
IndICATIVE BREAKdOWn OF REVEnUES In
THE GEOSynTHETICS & GRASS SECTOR
TenCate Grass in landscaping project in Riyadh
The world’s largest landscaping project using
synthetic turf was completed in March 2013 close to
the King Khaled international airport in Riyadh (Saudi
Arabia). It involves a two-colour landscape covering
an area of 160,000 m2. The site is a sand-strewn pitch
of two-tone green monofilament yarns. These yarns
have been developed specially for this project by the
TenCate Grass R&d team in dubai to fulfil a 10-year
UV guarantee. Riyadh has the highest solar activity
in the world.
The client was the Arriyadh development Authority
(AdA). The AdA chose TenCate Grass and Hatko
Sports of Turkey as the supplier and installer
respectively. Hatko Sports and TenCate have already
completed a number of projects in recent years.
The project in Riyadh took just 150 days from supply
through to installation.
86 | TenCate annual report 2013 | pERFORMAnCE
. Sector Geosynthetics & Grass
Revenues over the reporting year as a whole rose slightly in the EMEA
region, despite the slow start. Cost savings in the European companies
were largely negated by rising wage costs at European production
sites and higher input prices.
AMERICASlocal and central governments were the largest customers for the
Geosynthetics group in the United States. After a challenging second
half of 2012 as a result of political uncertainty in the United States,
barely any recovery took place in the market for geotextiles in 2013.
According to the American Road & Transport Builders Association
(ARTBA), expenditure on highways in the United States declined by
7% in 2013 to US$ 43 billion. Expenditure on bridges rose by 6% in the
same period to US$ 30 billion. These markets are of great importance
to TenCate Geosynthetics.
An important milestone was reached in the United States with the
completion of the TenCate Mirafi® RSi series. TenCate Geosynthetics
introduced the TenCate Mirafi® RSi series to the United States in 2010
with strong geotextiles for subsoil reinforcement and stabilisation.
This introduction was followed up in 2011 with the development of
geotextiles for less heavy applications. The TenCate Mirafi® RSi series
was complemented in May 2013 by geotextiles for the reinforcement
of highway and railway projects.
PERFORMANCE OF THE TENCATE GEOSYNTHETICS MARKET GROUP The year got off to a sluggish start in the TenCate Geosynthetics
market group due to prolonged adverse weather in Europe and the
United States. This delay was made up during the reporting year.
declining economic growth in Asia had a negative impact on the
revenues of the Geosynthetics group as a whole.
The sustained pressure on government budgets depressed revenues in
the global market in geotextiles for infrastructure. In the Geosynthetics
group, TenCate is 53% dependent on government markets. The
dependence varies from region to region.
The margins of the TenCate Geosynthetics market group were under
pressure throughout the year, however, as a result of lower revenues
in Asia, delays in major projects and volatility in raw material costs.
EMEAThe winter weather had a negative impact on the market in geotextiles
for infrastructure in Europe, particularly in the first half of the year.
According to the European Association of Geosynthetic product
Manufacturers (EAGM), sales volumes of geotextiles fell by 6% during
this period. TenCate Geosynthetics was able to hold its own in this
challenging market with increased market shares in the United
Kingdom, Scandinavia, Benelux, Russia and Eastern Europe.
Government spending in Europe remained sluggish in the second half
of the year, putting downward pressure on revenues.
TENCATE GEOSYNTHETICS
GEOGRApHIC REVEnUES
REVEnUES By CUSTOMER GROUp
(IndICATIVE)
REVEnUES By End-MARKET
(IndICATIVE)
America
EMEA
Asia Pacific
40%
22%
38%
2013Governmental
Non-governmental53%47% 2013
Infrastructure
Watermanagement
Sport & leisure
89%
6% 5%
2013
87TenCate annual report 2013 | pERFORMAnCE |
The Geosynthetics group is confident of future growth in Asia. The
sales organisation in Asia was strengthened in 2013, with a particular
focus on Indonesia, Thailand, Burma and China. The company made
various changes to the management of the Asian activities in 2013,
which should bear fruit in 2014.
WATER & ENVIRONMENTThe revenues of the worldwide Water & Environment business unit
rose by 17% in 2013. In Europe and Africa in particular, TenCate
Geosynthetics supplies products for attractive projects and achieved
revenue growth. In order to strengthen the Geosynthetics group’s
position in the water and environment market, a worldwide sales and
marketing organisation was established for this market. This structure
allows a faster response to growing demand for water management
and environmental solutions. End-user marketing was strengthened in
2013 through collaboration with engineering firms which can
experience the benefits of TenCate technology for their projects at an
early stage.
The Water & Environment business unit developed the TenCate
Geotube® carbon footprint calculator in 2013 for use in dewatering
and breakwater projects. This calculator determines the CO2 footprint
of water management projects based on actual marketing and
database information, enabling a quantitative assessment to be made
of the sustainability benefits of TenCate Geotube®. TenCate expects
sustainability to become an increasingly important criterion in
projects.
The market group made progress in South America, where the sales
and marketing organisation was strengthened. In Brazil, TenCate
Geosynthetics grew thanks to an increase in investments in
infrastructure related to the football World Cup in 2014 and the
Olympic Games in 2016.
The revenues of the TenCate Geosynthetics market group in the
Americas rose slightly in 2013, despite a negative exchange rate
effect. The input costs of the most important materials, polyethylene
(pE) and polypropylene (pp), were volatile particularly in the first
quarter. This had a negative impact on profitability. The emphasis
during the reporting year was placed on cost savings in order to
compensate for the volatility of raw material costs.
ASIA-PACIFICTenCate Geosynthetics recorded a sharp decline in revenues in Asia in
2013. After a positive start to the year, revenues in Asia slumped in
the second half. TenCate Geosynthetics had to contend with a weak
market, particularly in China. In Southeast Asia, revenues were under
pressure due to decreasing economic growth in the region. This had a
negative impact on local infrastructure investments. Exchange rate
effects associated with the strengthening of the euro also put
downward pressure on revenues.
0
10
20
30
40
201320122011201020092008
26.1 25.127.3 27.4 28.6
30.4
US$ billion
0
20
40
60
80
201320122011201020092008
56.060.8
55.148.5 46.2 43.0
US$ billion
VAlUE OF InFRASTRUCTURE pROJECTS – HIGHWAyS VAlUE OF InFRASTRUCTURE pROJECTS – BRIdGES
Source: ARTBA Analysis of US Census Bureau data Source: ARTBA Analysis of US Census Bureau data
88 | TenCate annual report 2013 | pERFORMAnCE
. Sector Geosynthetics & Grass
SUSTAINABILITYTenCate Geosynthetics in nijverdal was certified in accordance with
the CSR performance ladder at level 3 at the beginning of 2013.
Stakeholders in the value chain were involved in the introduction of
this CSR management system and regular dialogue took place on good
practice last year. The plan-do-Check-Act cycle is also being
implemented in this market group for three years in respect of all 33
CSR indicators. At the other two TenCate Geosynthetics production
sites in Europe, both ISO 9001 and ISO 14001 have been implemented
and certification took place in 2013.
last year a single haulier was selected, making it possible to increase
the efficiency of transport movements, analyse CO2 emissions per
shipment and reduce the impact where possible. Collaboration with
suppliers has also been intensified in order to reduce waste and
optimise the recycling of residual yarn. The collaboration with the
European industry organisation EAGM and relevant knowledge
institutions has been expanded to facilitate continuing innovation.
A risk inventory and evaluation took place and the company emergency
response plan in this market group in the netherlands was updated in
2013. As part of the age-aware personnel policy, the shift roster was
made flexible on the basis of altered working hours. Tests were
conducted with biodegradable TenCate Geotube® containers for
specific applications in 2013, with a view to the sustainability of the
product portfolio. An initial trial installation was completed in the
Markermeer. This special fabric proved to be reproducible and is
expected to enter production in the year ahead. An analysis of waste
flows will be made in 2014 to reduce the environmental impact.
TenCate Geosynthetics declared joint winner of the Water Innovation Award 2013
The entry ‘Vertical sand-tight geotextile’ submitted by
the Rivierenland Water Board in the netherlands won
the Water Innovation Award for 2013 in the dry Feet
category. piping is a major failure mechanism in dykes, in
which water seeps through an embankment, dyke or other
engineering structure as a result of a huge difference in
the level of the water on either side. The flow of water
under the dyke may be so great that sand boils that carry
along sand particles occur on the polder side of the dyke.
Because sand is carried along with the flow, ‘pipes’
are created under the dyke that may cause it to burst.
Vertical sand-tight geotextile is an innovative preventive
measure used to avert piping. Together with deltares,
the department of Waterways & public Works in the
netherlands, TenCate Geosynthetics and others, the
Rivierenland Water Board has developed and tested this
vertical sand-tight geotextile. The protective principle of
the vertical sand-tight geotextile is based on the fact that
the geotextile filter allows water, but not sand, to pass
through. A pipe which develops on the polder side is
stopped by the geotextile, thus ensuring that the sand
remains trapped under the dyke and that piping cannot
occur. This solid solution is not dependent on a minimum
requirement for seepage length. The innovative technique
was derived from TenCate Geotube® technology.
89TenCate annual report 2013 | pERFORMAnCE |
The growth of the replacement market, particularly in the United
States and Europe, also had a positive impact on revenues in the
market group. TenCate Grass generated approximately 15% to 20% of
revenues from the replacement of synthetic turf pitches. The third
generation of synthetic turf football pitches achieved a breakthrough
at the beginning of this century and the market developed rapidly.
Many of these pitches are now due for replacement. The advantage
for TenCate Grass and the customer is the relatively low installation
costs for the replacement of a pitch. The replacement market is
expected to grow further in the years ahead.
The profitability of the upstream activities improved slightly in 2013.
Higher production volumes resulted in better utilisation of production
sites in dubai, the netherlands and the United States. The capacity for
texturised fibres (fibres with a particular structure) at the production
sites was almost doubled in 2013. The main markets for these fibres
are landscaping and the hockey market. These fibres compact the
surface and give the top layer a more natural look and feel. With the
2014 Hockey World Cup in prospect, TenCate Grass expects growing
demand for these fibres. Matches will be played on the GreenFields®
TX system during the tournament.
TenCate Grass made good progress with the integration of the
downstream activities. These are the GreenFields and TigerTurf
subsidiaries and the 50% holding in Edel Grass. The costs of the
downstream activities were reduced. TenCate Grass will continue to
integrate these activities in 2014. The cost savings in the Grass group
were nevertheless negated by temporarily high marketing costs and
volatile raw material costs.
PERFORMANCE OF THE TENCATE GRASS MARKET GROUP TenCate Grass recorded slight growth in revenues in 2013. This rise
was mainly driven by volume growth in synthetic turf fibre production
(upstream). The improvement in results of the Grass group stagnated
due to temporarily high marketing costs and volatile raw material
costs.
TenCate Grass benefited from a cautious recovery in the synthetic turf
market in 2013. In the United States, the more prosperous states
increased their spending on sport. Market demand for sports pitches
in Europe remained low. The situation in some countries, such as the
netherlands and Scandinavia, was an exception. Synthetic turf is on
the rise particularly in densely populated urban areas and acceptance
is growing. Climate can also be a decisive factor in the choice of
synthetic turf. There is also increasing quality awareness in these
markets. Government spending cuts in the main countries of southern
Europe affected profitability in the synthetic turf industry. A number of
companies in Europe in particular decided to discontinue fibre
production and purchase from third parties. Companies in the
installation market also discontinued their operations, enabling
TenCate to capture a growing market share.
TENCATE GRASS
GEOGRApHIC REVEnUES
REVEnUES By CUSTOMER GROUp
(IndICATIVE)
REVEnUES By MARKET THEME
(IndICATIVE)
America
EMEA
Asia Pacific
25%19%
56%
2013Governmental
Non-governmental60%
40%
2013Sport & leisure
Infrastructure
80%
20%
2013
90 | TenCate annual report 2013 | pERFORMAnCE
. Sector Geosynthetics & Grass
SUSTAINABILITYThe TenCate Grass market group extended the CSR performance
ladder certificate at level 3 in the netherlands during the reporting
year. In this context it applies a code of conduct which aims to exclude
child labour, breaches of human rights and corruption. At the same
time a global mobility policy has been implemented, under which
TenCate Grass customers have been supplied from the nearest
geographic location since the beginning of 2013. deliveries to
customers from the site in nijverdal have been made by trucks
compliant with the Euro 6 exhaust gas standard since 2013.
preparations were also made for the replacement of the industrial
clothing in the nijverdal market group by conducting wearing trials.
The 5S methodology was successfully completed in the course of 2013
for both yarn and backing production in the netherlands. Increased
attention was also devoted to personal protective equipment and
investments were made in this area. Hearing protection at TenCate
Grass in nijverdal has now been standardised. Two themed months
were organised last year, one concerning welfare and the other
concerning sustainability. Adjustments were also made to a number of
machines in order to increase process safety, such as fall protection in
machinery. The inflow of recycled material was increased compared to
2012. Various activities were conducted to reduce rejects and waste.
When machines and components are replaced, low-energy
alternatives are deliberately chosen, such as texturing and
compounding.
The adapted three-shift roster was established in 2013, on the basis of
constructive consultation with employees and the works council.
Efforts were made last year to reduce the physical and mental stress
on employees by using a new type of hyperbola for weight reduction
and by making adjustments to the line planning.
Market demand for synthetic turf products manufactured using the
innovative weaving technology grew strongly during the reporting
year, making the product portfolio sustainable.
TenCate also conducted the skin-comfort innovation project with
Radboud University in nijmegen last year with the aim of further
increasing the sliding friendliness of synthetic turf. preparations also
continued for the development of the next generation of synthetic turf
systems in 2013, with the aim of achieving the ultimate balance in
terms of characteristics and costs.
LANDSCAPING MARKETThe landscaping market accounted for approximately 20% of total
revenues in 2013. These revenues have grown substantially in recent
years due to an increasing focus on the look and feel of the projects.
A number of attractive projects were completed with TenCate
synthetic turf in 2013. The world’s largest landscaping project using
synthetic turf was completed in March close to King Khalid
International Airport in Riyadh (Saudi Arabia). It involved a two-colour
landscape covering an area of 160,000 m2. The clients appreciated the
importance of the high quality of the TenCate synthetic turf for
landscaping. This market is expected to see continued positive growth
in the years ahead.
GREENFIELDS® MX IN PROFESSIONAL FOOTBALLThe acceptance of synthetic turf as a professional playing surface took
off in 2013. GreenFields will supply synthetic turf to a growing number
of Jupiler league clubs. The Grass group is increasingly positioning
itself in high-quality synthetic turf systems. The awarding of this
contract was important for the image of synthetic turf because it is
the first professional football division to switch partly to synthetic turf
pitches. GreenFields began laying the first pitches in the summer of
2013. A decisive factor for the winning of the tender was the natural
playing experience provided by the GreenFields® MX system. This
synthetic turf also looks natural on TV pictures.
The GreenFields® MX system brings together a number of the
company’s manufacturing capabilities. It is the first patented 3d
woven synthetic turf system. This system makes it easy for a
player to get his foot under the ball, as in the case of natural grass.
It also allows unimpeded turning, acceleration and rotation, as on
a natural surface. That prevents excessive stress on muscles.
An important innovation in the GreenFields® MX system is that
it is the first fully recyclable synthetic turf system. TenCate Grass
expects an increasing focus on sustainability and recycling.
The growing replacement market for synthetic turf systems
is expected to strengthen this focus.
91TenCate annual report 2013 | pERFORMAnCE |
Other activities
Xennia Technology’s inks are characterised by high quality, intense
colours and low consumption. TenCate remains important for Xennia
Technology in the development of digital solutions in the field of
technical textiles. This market is still in the start-up phase. According
to market assessments, digital processes are set to account for an
increasingly important share of production processes in the global
textile sector as a whole. Important factors for growth and further
acceptance of this technology are lower ink prices, increased
production speeds and increased reliability of production systems.
These developments are also of importance for TenCate as a user of
such systems. Xennia Technology can play an important role in this
regard.
Xennia Technology also contributed to the digitisation of production
processes in other industries. It is a major challenge for the company
to foster more support for these solutions in the market through a
strengthening of marketing and sales activities, which will lead to
revenue growth.
REVENUES AND RESULTSThe Other Activities sector comprises the companies Xennia
Technology and TenCate Enbi and the Holding & Services activities.
The revenues of the Other Activities sector amounted to € 66.4 million
in 2013 (2012: € 69.7 million). EBITA amounted to – € 0.5 million (2012:
– € 4.9 million). This improvement was mainly attributable to Xennia
Technology.
PERFORMANCE OF XENNIA TECHNOLOGYXennia Technology saw revenues decline in 2013 compared to the
previous year. The company completed its strategic reorganisation
during the year. The business portfolio was given greater focus, with
the emphasis placed on the marketing of developed products,
knowledge and skills. Costs were also lowered. Xennia Technology
consequently recorded an improved result during the year on lower
revenues. Cash flow also improved strongly. Collaboration with
business partners led to an increase in ink revenues in the second half
of the year. An increased focus on ink revenues and partnerships is
expected to sustain the growth in ink revenues.
TenCate protective & Outdoor Fabrics was the launch customer for
Xennia Technology’s UV-curable inks in 2013. Third parties, including
Reggiani Macchine, were also buyers of inks for the textile market.
Xennia Technology has a flexible and high-calibre team of developers,
particularly in the field of chemicals and software. It concentrates
particularly on niche markets, where inks have high added value and
are distinct from commoditised products. Xennia Technology is able to
respond to customer-specific requirements in the market.
KEY FIGURES OTHER ACTIVITIES
in millions of euros unless stated otherwise 2009 2010 2011 2012* 2013
Revenues 52.7 66.8 74.5 69.7 66.4
Operating result before amortisation (EBITA) – 7.0 9.8 5.9 – 4.9 – 0.5
Operating result (EBIT) – 8.1 8.3 4.1 – 8.0 –3.0
Investments 4.1 6.9 5.2 1.9 1.7
depreciation and amortisation 3.2 3.5 3.7 5.2 5.4
number of staff years (year-end) 670 624 611 655 680 * Adjusted for accounting policy change pensions.
92 | TenCate annual report 2013 | pERFORMAnCE
. Other activities
PERFORMANCE OF TENCATE ENBIThe revenues of TenCate Enbi remained almost unchanged in 2013
compared to 2012. EBITA rose as a result of more efficient production
and the focus on the growing production printing market. TenCate Enbi
is mostly dependent on the market for rollers used in printers of major
customers (OEMs).
Good progress was made with the diversification strategy in new
markets, such as the heating and insulation market. This strategy led
to a rise in revenues in Europe. Revenues at the Asian production site
rose as a result of successful qualifications among Asian OEMs.
production capacity at this site will have to be expanded in the near
future. lower revenues were recorded at the production sites in the
United States.
TenCate Enbi is well positioned in production printing, a growing
market characterised by high recurrent volumes and margins. The
long-term outlook for TenCate Enbi is positive. The company is
qualified for various new printer platforms of Asian printer
manufacturers.
TenCate selected to design ballistic protection for Embraer A-29 Super Tucano
The Brazilian aircraft builder Embraer selected
TenCate Advanced Armour to design aerospace
armour for the Embraer EMB 314. This military
aircraft, also named the A-29 Super Tucano, is a
turboprop aircraft for light attack, counter insurgency,
air support, air reconnaissance missions and pilot
training. The aircraft is currently being used by the
air forces of Angola, Brazil, Burkina Faso, Chile,
Colombia, dominican Republic, Ecuador, Indonesia
and Mauritania. Orders for the A-29 have been placed
by Senegal and the United States. The US Air Force
has already announced that it has selected the A-29
of Embraer defesa & Segurança for its light Air
Support programme.
93TenCate annual report 2013 | OUTlOOK |
Outlook for 2014 94
Action plans for 2014 95
Corporate initiatives in 2014 96
In Outlook the company provides details of the outlook and action plans for 2014 and subsequent years
OUTLOOK
94 | TenCate annual report 2013 | OUTlOOK
STRATEGY AND OBJECTIVESThe strategy will remain unchanged overall. Having regard to the buy
& build policy, a restrained approach to acquisitions will remain
appropriate in 2014. TenCate aims to strengthen its technology
positions, particularly in the production of composites and related
processes. This appears to be achievable particularly through organic
growth. TenCate expects investments in this area to increase.
The strategic objectives for 2014 are focused particularly on creating a
stable basis for growth in promising geographic markets in which
TenCate remains underrepresented. TenCate aims to make progress in
local partnerships. The policy on the development of private markets
will be vigorously pursued. The markets which hold promise for
TenCate materials are oil and gas extraction, mining, the automotive
industry, the aerospace sector and the electronics industry.
The qualitative and quantitative strengthening of marketing and sales
activities remains a priority in order to exploit opportunities in an
improving market and to raise the quality of revenues. In times of
economic decline, the proportion of volume products increases in
relative terms, because good capacity utilisation is necessary in order
to cover production costs sufficiently.
GENERAL OUTLOOKAccording to the most recent forecasts by the International Monetary
Fund (IMF) of January 2014, global economic growth will accelerate
from 2.9% in 2013 to 3.7% in 2014. The IMF forecasts that mature
markets will show accelerating growth, while emerging market growth
will decrease.
TenCate generates a relatively large proportion of revenues in the
United States and Europe and expects to achieve revenue growth at
least in line with the above growth estimate in most businesses.
Revenue growth in composites as a whole is expected to be
considerably higher. The market for automotive composites is still in
the initial phase.
The defence market is expected to fall short of the above growth
estimate. Revenues within the TenCate defender™ M portfolio will
decline further due to the limiting of foreign deployments of US troops.
This decrease will be only partly offset by growth in revenues outside
the United States.
As a result of the strengthening of the market position, TenCate
believes it will achieve revenue growth in the armour composites
market.
The growth in protective fabrics for the industrial market is expected
to continue.
The revenue growth of TenCate Geosynthetics is expected to be in line
with the above macroeconomic forecasts. The outlook for growth in
the worldwide synthetic turf market is cautiously positive. The
breakthrough by innovative synthetic turf systems in dutch top-flight
football (Jupiler league) has set a new standard.
Outlook for 2014
95TenCate annual report 2013 | OUTlOOK |
Action plans for 2014
ADVANCED TEXTILES & COMPOSITES SECTOR■■ Further growth in industrial market for protective fabrics and
international revenues (outside US) from TenCate defender™ M
portfolio.■■ Revision of commercial strategy of TenCate protective Fabrics
EMEA with focus on core customers and brand values.■■ Implementation of digital printing and finishing strategy.■■ Strengthening of internal co-operation in TenCate Advanced
Armour market group.■■ Aim to accelerate market introduction of TenCate ABdS™ active
blast countermeasure system.■■ progress in new business (automotive composites).
GEOSYNTHETICS & GRASS SECTOR■■ Strong growth in Water & Environment solutions with proactive
market approach, focused on prevention and sustainability.■■ Acceleration of growth in revenues from synthetic turf systems
(solution-focused market approach targeted at ease of use, quality
and sustainability).■■ Continuation of profit recovery, particularly in Grass group.
OTHER ACTIVITIES■■ development of organisations focused on independence and
sustainable growth.■■ Continuation of recovery in results at Xennia Technology and
pursuit of co-operation with strong market participants to
accelerate revenue growth.
CORPORATE■■ Organisational changes aimed at continent-based management to
achieve more market-driven and flexible organisation, making use
of local market knowledge.■■ Further development of partnerships.■■ Further increase in financial solidity.■■ Strengthening of TenCate’s position in Asia (contacts with local
operators, key projects, growth in share of revenues).
96 | TenCate annual report 2013 | OUTlOOK
CORPORATE SOCIAL RESPONSIBILITYThe steps which TenCate took in 2013 to develop its corporate social
responsibility will be continued in 2014.
The integration of CSR data in the financial discipline will be continued
in 2014. As in the previous year, the TenCate entities concerned will
receive full feedback on their collective and individual CSR
performance on two occasions in 2014. A comparison will again be
made over several years and with comparable business entities. These
insights can be used in order to refine the social, ecological and
economic aspects of enterprise. At the same time, market groups will
be requested to supply a plan detailing how they will further improve
their sustainability performance in the years ahead to allow greater
disclosure. The following CSR-related projects and activities are
already planned for 2014:
Industrial clothing The introduction of new protective industrial
clothing for all four market groups in the netherlands is scheduled for
May 2014. The switch to technologically advanced TenCate protection
products will contribute to the optimisation of personal protection.
The organisation of washing and maintenance of clothing on a
collective basis will also have positive environmental effects.
Factory of the future A project is due to be launched in mid-2014
aimed at using technological innovations to introduce production
processes with the lowest possible environmental impact. For that
purpose TenCate is opening a field lab in which pilot production can
take place and tests can be carried out.
Smart factory A project group is being formed in 2014 to further
optimise the product creation process in the netherlands. This project,
which is being promoted by the regional government and is fully in line
with the Factory of the Future project, will involve co-operation with
partners including philips Consumer lifestyle in drachten, Fokker
Aerostructures in Hoogeveen, the University of Groningen and the
University of Twente. The ultimate aim of this project is to create an
automated 24/7 ‘smart factory’. The sustainability aspect will be an
increasingly important part of the design of future production
processes.
Stakeholder dialogue The policy in this field will be continued and,
where possible, intensified further in 2014. The aim will be to establish
a clear dialogue which, right across the organisation, is geared as
closely as possible to the corporate dialogue in terms of content and
practical arrangements. A digital magazine will be used to support the
stakeholder dialogue.
CSR Performance Ladder The certification of all three TenCate
Geosynthetics production sites in Europe in accordance with ISO
14001 in 2013 laid the foundation for obtaining an international
certificate for the CSR performance ladder at level 3. preparations for
this certification of corporate social responsibility covering the
combined European activities of TenCate Geosynthetics are being
made in 2014.
Sponsorship TenCate and its subsidiaries are sponsoring
organisations with a social and/or sporting background in numerous
fields in 2014. TenCate Advanced Composites also aims to sponsor
teams of technical students from universities and colleges in 2014 to
increase their knowledge of these advanced materials and give them
greater experience of the processing of the materials. At corporate
level, TenCate will again support numerous local, regional, national
and international initiatives and events through sponsorship, donations
and practical support in 2014.
Eco-innovation TenCate digital Textiles in nijverdal will continue to
work on the digital printing and finishing of awning and other outdoor
fabrics or substrates as part of the digifin project in 2014 and 2015.
This eco-innovation is being co-financed by the European Union under
the Competitiveness and Innovation Framework programme. This is
being implemented by the Executive Agency for Competitiveness and
Innovation in close collaboration with the Environment directorate-
General of the European Commission. digital finishing by means of
high-speed inkjet technology considerably improves the durability,
flexibility and economic performance of the textile industry, including
technical textiles. For further information see www.digifin.eu.
CORPORATE RISK MANAGEMENTduring the current year, the risk manager will work with the relevant
parties to raise three to five other TenCate production sites to FM
Global’s highest safety level. As preparation, the management of the
production sites concerned will implement the required organisational
and process changes relating to the relevant safety aspects. The risk
manager will once again visit almost all production sites worldwide in
2014 in order to maintain the safety culture in TenCate.
Corporate initiatives in 2014
97TenCate annual report 2013 | OUTlOOK |
Statement by the Executive Board
As the Executive Board of Royal Ten Cate, we have prepared the
annual report and the financial statements for 2013.
We declare that to the best of our knowledge:■■ The financial statements give a true and fair view of the assets,
liabilities and the financial 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, Wednesday 26 February 2014
Executive Board
l. de Vries, president and CEO
98 | TenCate annual report 2013 | OUTlOOK
99TenCate annual report 2013 | FInAnCIAl STATEMEnTS |
Financial statements 2013 100
Other information 151
Ten-year summary 154
Financial statements contain TenCate’s annual accounts and the accompanying explanatory notes
FINANCIAL STATEMENTS
100 | TenCate annual report 2013 | FINANCIAL STATEMENTS
Consolidated profit and loss account 102
Consolidated statement of comprehensive income 103
Consolidated balance sheet 104
Consolidated cash flow statement 106
Consolidated statement of changes in group equity 108
Notes to the consolidated financial statements 109
1 General information on royal Ten Cate nv 109
2 General principles for financial reporting 109
3 Principles for the preparation of the
financial statements 109
4 Consolidation principles 109
5 Foreign currencies 110
6 Derivatives 111
7 Hedge accounting 111
8 Segment reporting 111
9 Revenues 111
10 Government subsidies 111
11 Presentation in the profit and loss account 112
12 Lease payments 112
13 Financial income and expenses 112
14 Profit tax 112
15 Earnings per share 113
16 New standards and interpretations not yet applied 113
17 Principles for the preparation of the
cash flow statement 113
18 Intangible assets 113
19 Tangible fixed assets 114
20 Inventories 114
21 Trade debtors and other receivables 114
22 Cash and cash equivalents 115
23 Impairment 115
24 Share capital 115
25 Pension liabilities 116
26 Share-based payments 116
27 Provisions 116
28 Long-term debts 117
29 Trade creditors 117
30 Determination of fair value 117
Notes to the profit and loss account 118
31 Operating segments 118
32 Acquisitions and sale of participating interests 120
33 Personnel costs 120
34 General management costs 120
35 Net financial expenses 120
36 Profit tax 121
Notes to the consolidated balance sheet 122
37 Intangible assets 122
38 Tangible fixed assets 124
39 Investments in associated companies and
financial fixed assets 125
40 Deferred profit tax assets and liabilities 126
41 Inventories 127
42 Trade debtors 127
43 Other receivables 127
44 Cash and cash equivalents 127
45 Total shareholders’ equity 128
46 Earnings per share 129
47 Long-term debts 129
48 Pension liabilities 131
49 Provisions 133
Other information 134
50 Financial instruments 134
51 Liabilities not shown in the balance sheet 141
52 Investment liabilities 141
53 Contingent liabilities 142
54 Related parties 142
55 Estimates and judgments made by the management 143
Financial statements 2013
101TenCate annual report 2013 | FINANCIAL STATEMENTS |
Company financial statements 144
56 Company profit and loss account 144
57 Company balance sheet (before appropriation
of the result) 144
Notes to the company financial statements 145
58 Financial fixed assets 145
59 Equity 146
60 Called and paid-up capital 146
61 Ordinary shares 146
62 Share premium reserve 146
63 Legal reserve 146
64 Other reserves 146
65 Option plan 146
66 Provisions 150
67 Long-term liabilities 150
68 Short-term liabilities 150
69 Auditor’s fees 150
70 Liabilities not shown in the balance sheet 150
Other information 151
Independent auditor’s report 151
Provisions of the articles of association relating to
appropriation of profit 152
Proposed appropriation of profit 152
Ten-year summary 154
Glossary 156
Means of communication 158
Colophon 160
102 | TenCate annual report 2013 | FINANCIAL STATEMENTS
For the financial year ending on 31 December, in millions of euros Note 2012* 2013
Revenues 31 1,049.0 1,012.0
Cost of sales 843.6 809.2
Gross margin 205.4 202.8
Selling costs 67.5 72.2
Research and development costs 23.3 22.4
General management costs 34 79.0 72.6
Operating result (EBIT) 35.6 35.6
Financial income 35 0.4 0.5
Financial expenses 35 – 12.5 – 10.6
Net financial expenses – 12.1 – 10.1
Result before profit tax 23.5 25.5
Profit tax 36 – 8.2 – 8.5
Result after profit tax 15.3 17.0
Net result from associated companies – 0.3 0.1
Result after profit tax and associated companies 15.0 17.1
Result attributable to:
Non-controlling interest – 5.9 – 1.9
Shareholders of the company (net income) 20.9 19.0
Weighted average number of shares x 1,000 46 25,895 26,225
Weighted average number of shares after dilution (x 1,000) 46 26,040 26,366
Net earnings per share (euro) 46 0.81 0.72
Diluted net earnings per share (euro) 46 0.80 0.72
* Adjusted for accounting policy change pensions.
The notes in sections 1 to 70 form an integral part of these financial statements.
Consolidated profit and loss account
103TenCate annual report 2013 | FINANCIAL STATEMENTS |
For the financial year ending on 31 December, in millions of euros Note 2012* 2013
Result after profit tax and associated companies 15.0 17.1
Other comprehensive income (after profit tax)
Currency translation differences for foreign activities 45 – 3.8 – 11.4
Effective portion of changes in hedging reserve (hedge accounting) 45 0.6 2.3
Actuarial gains and losses on pensions** – 16.6 13.6
Other comprehensive income after profit tax – 19.8 4.5
Comprehensive income after profit tax – 4.8 21.6
Comprehensive income attributable to:
Non-controlling interest – 5.9 – 1.6
Shareholders of the company 1.1 23.2
* Adjusted for accounting policy change pensions.
** Items which are never reclassified to the profit and loss account. Other comprehensive income may be reclassified.
The notes in sections 1 to 70 form an integral part of these financial statements.
Consolidated statement of comprehensive income
104 | TenCate annual report 2013 | FINANCIAL STATEMENTS
In millions of euros Note 31 December 2012 31 December 2013
NON-CURRENT ASSETS
Goodwill 37 214.5 214.6
Other intangible assets 37 54.9 55.6
Tangible fixed assets 38 196.7 165.7
Investments in associated companies 39 4.1 3.9
Financial fixed assets 39 12.9 14.2
Deferred profit tax assets 40 30.0 24.0
Total non-current assets 513.1 478.0
CURRENT ASSETS
Inventories 41 226.4 223.8
Assets
Trade receivables 42 140.0 128.7
Profit tax receivables 3.8 0.1
Other receivables 43 15.9 18.3
Cash and cash equivalents 44 26.7 21.6
Total current assets 412.8 392.5
Total assets 925.9 870.5
Consolidated balance sheet
105TenCate annual report 2013 | FINANCIAL STATEMENTS |
in millions of euros Note 31 December 2012 31 December 2013
GROUP EQUIT Y 45
Share capital 66.2 67.0
Share premium reserve 43.4 42.6
Translation reserve 3.1 – 8.6
Hedging reserve – 3.9 – 1.6
Reserve for own shares – 15.1 – 14.1
Other reserves and undistributed result 363.5 389.0
Total shareholders’ equity 457.2 474.3
Non-controlling interest – 1.9 – 1.0
Group equity 455.3 473.3
NON-CURRENT LIABILITIES
Long-term debts 47 220.3 195.1
Pension liabilities 48 42.3 24.1
Provisions 49 11.4 9.9
Deferred profit tax liabilities 40 8.8 7.5
Total non-current liabilities 282.8 236.6
CURRENT LIABILITIES
Cash loans, overdrafts 44 35.4 14.7
Repayment of long-term debts 47 0.9 1.0
Trade creditors and other payables 142.4 139.2
Provisions 49 2.8 4.4
Profit tax liabilities 6.3 1.3
Total short-term debts 187.8 160.6
Total liabilities 470.6 397.2
Total group equity and liabilities 925.9 870.5
The notes in sections 1 to 70 form an integral part of these financial statements.
106 | TenCate annual report 2013 | FINANCIAL STATEMENTS
For the financial year ending on 31 December, in millions of euros note 2012* 2013
CASH FLOW FROM OPERATING ACTIVITIES
Result after profit tax 15.0 17.1
Adjustments for:
Depreciation 38 37.1 34.8
Amortisation 37 14.5 13.1
Net financial expenses before exchange rate differences 35 12.2 10.1
Profit tax 36 8.2 8.5
Net result from associated companies 0.3 – 0.1
Result from sale of tangible fixed assets 34 – – 0.2
Costs of option scheme 2.0 1.6
Change in provisions and pension liabilities – 9.0 – 1.2
Cash flow from operating activities before movements
in working capital: 80.3 83.7
Movements in working capital:
Inventories 42.3 – 1.9
Receivables 18.7 7.7
Current liabilities – 22.7 7.7
38.3 13.5
CASH FLOW FROM OPERATING ACTIVITIES 118.6 97.2
Interest paid – 12.3 – 9.4
Profit tax paid – 4.5 – 12.7
Net cash flow from operating activities 101.8 75.1
* Adjusted for accounting policy change pensions.
Consolidated cash flow statement
107TenCate annual report 2013 | FINANCIAL STATEMENTS |
For the financial year ending on 31 December, in millions of euros note 2012* 2013
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of tangible fixed assets 0.3 0.8
Interest received 0.1 –
Acquisition of subsidiaries less cash acquired 32 – 15.7 – 22.2
Deconsolidation of subsidiary less cash 32 – 4.2
Investments in intangible assets 37 – 4.6 – 4.6
Investments in tangible fixed assets 38 – 12.0 – 9.8
Increase in long-term receivables – 1.5 – 0.9
Net cash flow from investing activities – 33.4 – 32.5
Net cash flow from operating and investing activities 68.4 42.6
CASH FLOW FROM FINANCING ACTIVITIES
Income from exercise of share options 0.5 1.0
Repayment of long-term debts – 51.5 – 27.8
Drawing of long-term debts – 7.6
Dividend paid to shareholders – 12.2 – 7.6
Net cash flow from financing activities – 63.2 – 26.8
Change in cash and cash equivalents 5.2 15.8
Cash and cash equivalents on 1 January 44 – 12.7 – 8.7
Exchange rate and translation differences in cash and cash equivalents – 1.2 – 0.2
Cash and cash equivalents on 31 December 44 – 8.7 6.9
* Adjusted for accounting policy change pensions.
The notes in sections 1 to 70 form an integral part of these financial statements.
108 | TenCate annual report 2013 | FINANCIAL STATEMENTS
in millions of eurosShare
capitalShare
premium
Reserve for translation
differencesHedging reserve
Reserve for own shares
Other reserves
and undis-tributed
result Total
Non- controlling
interestsGroup equity
Balance as at 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 profit tax *) 20.9 20.9 – 5.9 15.0
Actuarial gains and losses on defined
benefit pension schemes *) – 16.5 – 16.5 – 0.1 – 16.6
Currency translation differences – 3.9 – 3.9 0.1 – 3.8
Hedging result after profit 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 /
1 January 2013 66.2 43.4 3.1 – 3.9 – 15.1 363.5 457.2 – 1.9 455.3
COMPREHENSIVE INCOME
Result after profit tax 19.0 19.0 – 1.9 17.1
Actuarial gains and losses on
defined-benefit pension schemes 13.6 13.6 – 13.6
Currency translation differences – 11.7 – 11.7 0.3 – 11.4
Hedging result after profit tax 2.3 2.3 2.3
Total – – – 11.7 2.3 – 32.6 23.2 – 1.6 21.6
TRANSACTIONS WITH SHAREHOLDERS
Dividend to shareholders 0.8 – 0.8 – 7.6 – 7.6 – 7.6
Share-based payment transactions 1.6 1.6 1.6
Issue of repurchased shares 1.0 1.0 1.0
Deconsolidation of non-controlling interest – 1.7 1.7
Acquisition of non-controlling interest – 1.1 – 1.1 0.8 – 0.3
Total 0.8 – 0.8 – – 1.0 – 7.1 – 6.1 2.5 – 3.6
Balance as at 31 December 2013 67.0 42.6 – 8.6 – 1.6 – 14.1 389.0 474.3 – 1.0 473.3
* Adjusted for accounting policy change pensions.
The notes in sections 1 to 70 form an integral part of these financial statements.
Consolidated statement of changes in group equity
109TenCate annual report 2013 | FINANCIAL STATEMENTS |
ACCOUNTING STANDARDS
1 GENERAL INFORMATION ON ROYAL TEN CATE
Koninklijke Ten Cate nv (Royal Ten Cate) (the Company) is established
in Almelo, the Netherlands. The consolidated financial statements of
the Company comprise the financial 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 financial statements have been prepared by the Executive Board.
The 2013 annual report and accounts were discussed at the meeting
of the Supervisory Board on 26 February 2014. They were released for
publication on 27 February 2014. They will be presented to the
General Meeting of Shareholders for adoption on 17 April 2014.
The parent company financial statements form part of Royal
Ten Cate’s 2013 financial 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 financial statements.
The original financial statements were drafted in Dutch. This docu-
ment 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 financial statements have been prepared in accord-
ance 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
The new standard IAS 19 (2011) has been applied with effect from
2013. The expected investment return as part of the pension expense
is calculated on the basis of the discount rate used to determine the
pension liability. The change of accounting policy has the following
effect on the results and equity:
2012 2013
Cost of sales 1.3 1.3
Selling costs 0.2 0.2
Research and development costs 0.1 0.1
General management costs 0.3 0.3
Profit tax – 0.5 – 0.5
Total decrease in profit 1.4 1.4
Actuarial gains and losses 1.9 1.9
Taxes on actuarial gains and losses – 0.5 – 0.5
Total increase in other comprehensive income 1.4 1.4
Furthermore, the IFRS7 standard has been applied with effect from
2013.
3 PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL
STATEMENTS
The financial statements are presented in millions of euros (the euro
being the Company’s functional currency) unless stated otherwise.
The financial statements have been prepared on the basis of histor-
ical cost, except for derivative financial instruments (derivatives),
which are carried at fair value.
In preparing the financial statements, the Executive Board has used
estimates and assumptions which affect the application of accounting
standards and reported amounts stated in the consolidated financial
statements (see note 55). The actual results may differ from such
estimates. The estimates and underlying assumptions are continu-
ously 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 consist-
ently by the Group’s subsidiaries and joint ventures for the periods
presented in these consolidated financial statements. Certain
comparative information has been adjusted for the sake of compara-
bility.
4 CONSOLIDATION PRINCIPLES
4.1 Business combinations
Business combinations are recognised from the date on which control
passes to the Group. Control means the Group is able to determine an
entity’s financial and operational policy in order to obtain benefits
from the entity’s activities. In assessing control, the Group takes
account of potential voting rights which can be exercised at that time.
Notes to the consolidated financial statements
110 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated financial statements
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 financial and operational policy are
taken on the basis of unanimity. Joint ventures are proportionally
consolidated.
Other participating interests over which no significant influence is
exercised are carried at fair value and the dividend is stated in the
profit 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 elimi-
nated in the preparation of the consolidated financial statements.
Unrealised gains on Group transactions with proportionally consoli-
dated joint ventures and investments are stated in accordance with
the equity method and 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
estimated exchange rate on the transaction date. Currency trans-
lation differences are stated in the profit 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 profit and loss account as part of the result of the sale.
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 identified
assets acquired and the accepted liabilities is then deducted. If the
difference is negative, a book profit from an advantageous purchase
is stated directly in the profit and loss account. Any non-controlling
interests are carried at their proportionate share of the carrying
amount of identifiable 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
profit 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 there-
fore included.
4.3 Subsidiaries
Subsidiaries are undertakings in which the Company directly and/or
indirectly has a controlling interest. The financial statements of
subsidiaries are included in the consolidated financial statements
from the first 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-con-
trolling interests are allocated to the non-controlling interests, even if
a deficit 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 significant
influence on the financial and operational policy, but in which it has no
controlling interest. Significant influence 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 first-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.
111TenCate annual report 2013 | FINANCIAL STATEMENTS |
ating Decision Maker (CODM) committees, which take the important
operating decisions in the segment.
The operating results of an operating segment are assessed periodi-
cally 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
fixed 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 profit tax receivables and cash and cash
equivalents. The unallocated liabilities comprise interest-bearing
loans and profit 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 profit and loss
account when the main risks and benefits of ownership have been
transferred to the purchaser.
Revenues from services supplied are recognised in the profit and loss
account in proportion to the extent of performance of the work
applying on the reporting date.
No revenues are recognised if the extent of the revenues cannot be
reliably determined and if significant 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 manage-
ment 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 recog-
nised 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 profit and loss account.
10 GOVERNMENT SUBSIDIES
Subsidies granted as compensation for expenses incurred by the
Group are systematically stated as income in the profit 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 fulfil the attached conditions.
Subsidies granted to compensate the Group for the cost of an asset
The rates of the main currencies against the euro are as follows:
Closing rate Average rate
2012 2013 2012 2013
US dollar 1.32 1.38 1.29 1.32
British pound 0.81 0.83 0.81 0.85
Danish krone 7.46 7.46 7.44 7.46
UAE dirham 4.86 5.05 4.73 4.86
Malaysian ringgit 4.04 4.51 3.98 4.15
Singapore dollar 1.61 1.74 1.61 1.65
Chinese yuan 8.22 8.34 8.12 8.15
Australian dollar 1.27 1.54 1.25 1.36
6 DERIVATIVES
The Group uses derivatives in order to hedge exchange rate and
interest rate risks resulting from operating, financing 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 first-time inclusion.
The resulting income or expense is stated directly in the profit 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 deriva-
tive on the reporting date, taking into account the current exchange
rates, the current interest rate and the credit risk.
7 HEDGE ACCOUNTING
The Group applies cash flow hedge accounting to interest rate deriva-
tives. During the hedging relationship, the effective portion of the
changes in the fair value of the derivative is stated directly in other
comprehensive income of the hedging reserve in equity. The ineffec-
tive portion of the changes in the fair value of the derivatives is
stated directly in the profit and loss account. If the hedged future
transactions are stated in the profit and loss account, the transfer
takes place from equity to the profit 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 reve-
nues 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 Oper-
112 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated financial statements
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
profit and loss account at the time at which the Group’s right to
payment is established.
14 PROFIT TAX
The tax on profit for the financial year includes the profit tax that is
payable, available for set-off and deferred in respect of the reporting
period. The profit tax is stated in the profit and loss account, except
where it relates to items which are included directly in equity or in
other comprehensive income. Profit tax that is payable and available
for set-off in respect of the reporting period is the profit 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
firm decision has been taken by the reporting date, and any correc-
tions to profit tax payable in respect of previous years. Additional
taxes on profit from dividend payments are stated at the same time
as the liability to pay the respective dividend.
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 financial
reporting and the fiscal 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 fiscal value of subsidiaries, associated companies, joint
ventures and other participating interests. The amount of the provi-
sion for deferred profit tax liabilities is based on the method by which
the carrying value of the assets and liabilities is expected to be real-
ised or settled, using tax rates which, on the reporting date, have
been specified by law or in material terms.
Deferred profit tax assets and liabilities are offset if there is a legally
enforceable right to offset the profit tax assets and liabilities and
such assets and liabilities relate to profit tax imposed by the same tax
authority on the same taxable entity, or on different taxable entities
which intend to offset the profit tax assets and liabilities or whose
profit tax assets and liabilities are realised simultaneously.
A deferred profit 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 profits will be available
which can be applied for the realisation of the timing difference.
Deferred profit tax assets are reviewed on each reporting date and
are systematically stated as cost of sales in the profit and loss
account during the useful life of the asset.
11 PRESENTATION IN THE PROFIT AND LOSS ACCOUNT
The allocation of costs to the functional cost accounts can be
specified 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.
■■ Research and development costs: comprises research costs with
the aim of acquiring new technological knowledge and develop-
ment 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.
12 LEASE PAYMENTS
Lease payments in respect of operational leasing are stated in the
profit 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 profit and loss account
over the lease term.
Financial lease payments are stated partly as financial expenses and
partly as a repayment of the outstanding liability. The financing 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.
13 FINANCIAL INCOME AND EXPENSES
Financial income and expenses include the interest income and
expenses on invested and borrowed monies, interest charges on
financial lease payments, foreign exchange rate differences, divi-
dends 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
profit and loss account on the basis of the effective interest method.
Material financial 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
113TenCate annual report 2013 | FINANCIAL STATEMENTS |
18 INTANGIBLE ASSETS
18.1 Goodwill
Details of the valuation of goodwill on first-time inclusion can be
found in note 4.1. Goodwill is valued at cost less accumulated impair-
ments. The carrying value of the goodwill on investments in associ-
ated companies is included in the carrying value of the respective
investment. An impairment loss on an associated company is allo-
cated 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 scientific or technical knowledge and insights are stated as an
expense in the profit 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 sufficient resources to
complete the development and use or sell the asset. The capitalised
expenses include material costs, direct labour costs, financing costs
and an appropriate portion of directly attributable overheads. Other
development costs are stated as an expense in the profit 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 rela-
tionships, trademark rights, patents, software and similar rights.
These intangible assets are valued at cost less accumulated amorti-
sation and accumulated impairments (see note 23). Costs of internally
generated goodwill and trademarks are stated as an expense in the
profit and loss account when they are incurred.
reduced if it is no longer likely that the associated tax benefit will be
realised.
15 EARNINGS PER SHARE
The Group presents ordinary and diluted earnings per share for the
ordinary share capital. The net earnings per ordinary share are calcu-
lated 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.
16 NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED
A number of new standards, amendments to standards and interpre-
tations were not yet in force in 2013 and have therefore not been
applied to these consolidated financial statements:
■■ IFRS 11 – Joint arrangements, which becomes compulsory in
2014 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 2014. The expected impact is limited.
The other new or amended standards are not expected to have any
material effect on the Group’s consolidated financial statements.
17 PRINCIPLES FOR THE PREPARATION OF THE CASH FLOW
STATEMENT
Cash flows from operating activities are presented on the basis of the
indirect method. Cash flows in foreign currencies are converted at the
exchange rate on the date of the cash flow or on the basis of aver-
ages. Changes which have not resulted in cash flows, such as
exchange rate differences, acquisitions, financial 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 flow from financing activities.
Dividends received are stated in the cash flow from investing activi-
ties, and interest paid is stated in the cash flow from operating activi-
ties. 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 flow
statement.
114 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated financial statements
minimum lease payments at the inception of the lease, less accumu-
lated 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
fixed asset are capitalised provided the future economic benefits
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 profit 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 profit and loss account on the
basis of the straight-line method over the estimated economic life of
each component of a tangible fixed asset. Land is not depreciated.
The estimated economic life is as follows:
■■ buildings 33 years
■■ fixtures and installations in buildings 10 years
■■ plant and equipment 7 – 10 years
■■ inventory 5 years
■■ computers and office 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 (first in, first out) principle
and includes the costs incurred for the acquisition of the inventories,
their production or conversion and bringing them to the existing loca-
tion and condition. In the case of inventories of finished 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 produc-
tion capacity. The net realisable value is the estimated sale price in
ordinary operations, less the estimated costs of completion and the
sale costs.
21 TRADE DEBTORS AND OTHER RECEIVABLES
Trade 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
18.3 Expenses after first-time inclusion
Expenses after the first-time inclusion of capitalised intangible assets
are capitalised only if they lead to an increase in the future economic
benefits embodied in the particular asset to which they relate.
All other expenses are charged to the profit 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 profit
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 fixed assets are valued at cost less accumulated deprecia-
tion (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 prepara-
tion 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 financing costs.
Where tangible fixed assets consist of components with differing
useful lives, these are stated as separate items under tangible fixed
assets.
The profit or loss on the sale of a tangible fixed asset is determined by
comparing the sales proceeds with the carrying value of the tangible
fixed asset. The net difference is stated under general management
costs in the profit and loss account.
19.2 Leased assets
Leases in which the Group actually assumes all the risks and benefits
of ownership are classified as financial leases. Tangible fixed assets
which are acquired by means of financial leases are valued on first-
time inclusion at the lower of fair value and the present value of the
115TenCate annual report 2013 | FINANCIAL STATEMENTS |
ment are combined in such a way that the level at which such impair-
ment is tested reflects the lowest level at which goodwill is moni-
tored in internal reporting. Goodwill acquired in a business
combination is allocated to groups of cash generating units which are
expected to benefit 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 flows is calculated
using a discount rate before tax which reflects both the current
market valuations of the time value of money and the specific 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 gener-
ating 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.
24 SHARE CAPITAL
24.1 Share capital
The share capital is classified 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. Repur-
chased shares are classified in the reserve for own shares and
presented as a deduction from total equity.
customers for the contract work carried out up to the reporting date.
This item is carried at cost plus the profit 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 specific projects and an allocation of the fixed and variable
indirect costs incurred.
Projects in progress commissioned by third parties under contracts in
which the amount of costs incurred plus the recognised profit 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 profit, 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 flow
statement.
23 IMPAIRMENT
The carrying value of the Group’s assets, except that of inventories
(see note 20) and deferred profit tax assets (see note 14) is examined
at each reporting date in order to determine whether there are indica-
tions of impairment. If there are such indications, an estimate is made
of the realisable value of the asset. In the case of goodwill and intan-
gible assets which are not yet available for use, the realisable value is
estimated at each reporting date. This also applies if there is an indi-
cation of impairment.
An impairment is recognised when the carrying value of an asset or
the cash generating unit thereof is higher than the estimated realis-
able value. It is first charged to any allocated goodwill and then
deducted proportionately from the carrying value of the other assets.
For the testing of impairments, assets which cannot be tested individ-
ually are combined into the smallest distinguishable group of assets
which, as a result of continuous use, generates cash flow that is
broadly independent of the incoming cash flows from other assets or
groups of assets (the cash generating unit). Taking into account the
maximum size of an operating segment before aggregation (the ‘oper-
ating segment ceiling test’), cash generating units to which goodwill
has been allocated for the testing of goodwill with regard to impair-
116 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated financial statements
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 outflow of resources will be required to settle such
liability and such outflow can be reliably estimated. If the effect of
this is material, the provisions are determined by discounting the
expected future cash flows using a discount rate before profit tax
which reflects the current market valuations of the time value of
money and, if necessary, the specific risks of the liability. Interest
accrual is stated as a financial expense.
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 provi-
sions are accumulated over the respective period as in the case of
defined benefit pension schemes, except that actuarial gains or losses
are recognised in the profit 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 envi-
ronmental pollution is recognised when the pollution occurs.
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 defined contribution pension
schemes are charged to the profit and loss account in the period to
which they relate.
25.2 Defined benefit schemes
The Group’s net liability in respect of defined benefit 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 propor-
tion of the higher entitlement which relates to employees’ past
service is stated as an expense in the profit 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 profit and loss account.
Actuarial gains and losses in respect of a pension scheme are cred-
ited 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 benefits 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
117TenCate annual report 2013 | FINANCIAL STATEMENTS |
■■ Intangible assets
The fair value of patents and trademarks acquired as part of a busi-
ness combination is determined on the basis of the discounted esti-
mated 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 flows. The fair value of other
intangible assets is based on the expected present value of the cash
flow from the use and ultimate sale of the asset.
■■ Inventories
The fair value of inventories acquired as part of a business combina-
tion 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 profit margin reflecting 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 flows, on the basis of the market
interest rate applying on the reporting date. This fair value is deter-
mined for information purposes or if the trade debtors and other
receivables are acquired by means of a business combination.
27.5 Onerous contracts
A provision is recognised in the balance sheet for onerous contracts if
the benefits which the Group expects to obtain from a contract are
lower than the unavoidable costs of fulfilling 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.
28 LONG-TERM DEBTS
When included for the first time, interest-bearing loans received are
stated at fair value less directly attributable transaction costs. After
first-time inclusion, interest-bearing loans are carried at amortised
cost, with the difference between the cost and the redemption price
being stated in the profit and loss account on the basis of the effec-
tive 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 financial and non-financial
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 deter-
mining the fair value is provided in the section of these notes applying
specifically to the respective asset or the respective liability.
■■ Tangible fixed assets
The fair value of tangible fixed assets included as a result of a busi-
ness combination is the estimated amount for which an item of
immovable 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 fixed assets and
inventories is based on the listed market prices of comparable assets
and items where available, and on replacement costs where appli-
cable.
118 | TenCate annual report 2013 | FINANCIAL STATEMENTS
Notes to the profit and loss account
31 OPERATING SEGMENTS
The Group consists of three segments, as described below. The
segments offer a range of products and services, are managed sepa-
rately 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 profes-
sional wear, outdoor fabrics, composites for personal and vehicle
protection and composites for industrial applications and technolog-
ical applications in aerospace.
■■ Geosynthetics & Grass
Manufacture and sale of fabrics, non-wovens and grids for civil engi-
neering, environmental projects, recreational and industrial applica-
tions and manufacture and sale of synthetic turf fibres, systems and
backing for a range of applications.
■■ Other Activities
Manufacture and sale of rubber and foam rollers for the office equip-
ment industry and related products, development, production and
sale of inkjet technology and related components for industrial appli-
cations, as well as country holding companies and service companies.
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 oper-
ating result, as stated in the internal management report to the
CODM. The CODM is formed by the Executive Board.
119TenCate annual report 2013 | FINANCIAL STATEMENTS |
31.1. Analysis by operating segment
in millions of eurosAdvanced Textiles &
Composites Geosynthetics & Grass Other activitiesEliminations between
segments Consolidated
2012 2013 2012 2013 2012* 2013 2012 2013 2012* 2013
EXTERNAL REVENUES 460.6 427.8 518.7 517.8 69.7 66.4 – – 1,049.0 1,012.0
Revenue from transactions
between segments – – – – – – – – – –
Depreciation and amortisation – 15.7 – 16.6 – 30.7 – 25.9 – 5.2 – 5.4 – – – 51.6 – 47.9
Operating income 18.5 15.0 25.1 23.6 – 8.0 – 3.0 – – 35.6 35.6
Financial income 1 0.3 0.5
Financial expenses 1 – 12.5 – 10.6
Profit tax – 8.2 – 8.5
Net result of associated
companies – – – 0.3 0.1 – – – – – 0.3 0.1
ASSETS AND LIABILITIES
Assets of segments 341.9 334.7 454.8 426.6 65.0 60.3 – – 861.7 821.6
Investments in associated
companies – – 4.1 3.9 – – – – 4.1 3.9
Unallocated assets – – – – – – – – 60.1 45.0
Total assets 341.9 334.7 458.9 430.5 65.0 60.3 – – 925.9 870.5
Liabilities of segment 2 62.7 67.3 74.8 78.4 61.7 32.7 – – 199.2 178.4
Unallocated liabilities – – – – – – – – 271.4 218.8
Total liabilities 62.7 67.3 74.8 78.4 61.7 32.7 – – 470.6 397.2
Investment expenditure 9.4 7.8 5.3 4.9 1.9 1.7 16.6 14.4
1 2012: excluding € 0.1 million of consolidated exchange rate differences (2013: € 0).2 Excluding intercompany loans.* Adjusted for accounting policy change pensions.
31.2 Analysis by geographic location
Revenues by originNon-current
assets by origin*
2012 2013 2012 2013
Netherlands 209.4 221.0 59.0 54.3
Other Europe 192.0 189.5 97.3 106.0
North America 468.9 449.7 153.2 140.8
Asia / Australia /
Middle East 178.7 151.8 160.7 138.7
Total 1,049.0 1,012.0 470.2 439.8
* Non-current assets exclude financial instruments and deferred profit tax assets
120 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the profit and loss account
The pension costs amount to € 10.1 million. This figure includes € 5.1
million (2012: € 1.6 million) in respect of defined benefit schemes (see
note 48.3) and an expense of € 5.0 million (2012: € 4.5 million) in
respect of defined contribution schemes. The income in respect of
defined benefit schemes includes non-recurring income of € 0.1
million (2012: € 3.3 million) (see note 48).
The average number of employees (permanent and temporary) in the
Group in 2013 was 4,735 (2012: 4,941).
34 GENERAL MANAGEMENT COSTS
The general management costs include the following other operating
expenses and income.
Government subsidies amount to € 1.1 million (2012: € 1.7 million) and
relate particularly to subsidised research and development projects.
In 2013 the book profit on the sale of tangible assets amounts to € 0.2
million (2012: € 0).
35 NET FINANCIAL EXPENSES 2012 2013
Interest income 0.3 0.5
Foreign currency exchange rate differences 0.1 –
Financial income 0.4 0.5
Interest expenses – 8.9 – 7.4
Realised change in fair value of derivatives
for which hedge accounting is applied – 3.4 – 3.0
Ineffective portion of change in fair value
of derivatives for which hedge accounting
is applied – 0.1 – 0.1
Result of derivatives for which no hedge
accounting is applied – 0.1 – 0.1
Financial expenses – 12.5 – 10.6
Net financial expenses – 12.1 – 10.1
32 ACQUISITIONS AND SALE OF PARTICIPATING INTERESTS
32.1 Acquisitions
On 15 January 2013 the Group acquired full control of Amber Compos-
ites Ltd of the United Kingdom (100% interest). Amber is a British
manufacturer of thermoset composites for industry and the automo-
tive market. The acquisition will allow an acceleration of activities in
the European thermoset composites market. For reporting purposes,
this acquisition has been included in the Advanced Textiles &
Composites sector.
The acquisitions are being accounted for in accordance with the
acquisition method (IFRS 3). The acquisition amounts have been allo-
cated to the identified acquired assets and liabilities, based on the
fair value. The expected synergy effects for the Group result in an
amount of € 6.9 million of goodwill paid for the acquisition. The acqui-
sition has no material impact on the assets and liabilities.
In 2013 an amount of € 22.2 million was paid in respect of acquisi-
tions, including € 5.0 million relating to acquisitions in prior years. The
effect of the acquisition on 2013 revenues amounts to € 10.7 million.
The effect of the acquisition on the 2013 result after tax is -€ 0.3
million. The revenues and net results would not differ materially if the
acquisition had taken place on 1 January 2013. The Group incurred
expenses of € 0.6 million in connection with the acquisitions,
comprising particularly external legal expenses and due diligence
costs.
32.2 Deconsolidation
TenCate – Union Protective Fabrics Asia Ltd was deconsolidated in
2013 because the Group no longer has control over the company. The
deconsolidation did not generate a result. The cash flow from
investing activities amounts to € 4.2 million as a result of the decon-
solidation of a bank debt.
33 PERSONNEL COSTS 2012 2013
Wages and salaries 154.9 151.5
Social charges 32.3 31.6
Costs of option scheme 2.0 1.6
Pension costs* 6.1 10.1
Temporary personnel 14.5 15.7
Other personnel costs 5.6 7.1
215.4 217.6
* Adjusted for accounting policy change pensions.
121TenCate annual report 2013 | FINANCIAL STATEMENTS |
36 PROFIT TAX 2012* 2013
Profit tax payable
Current financial year – 10.6 – 12.3
Recognition of previously unrecognised tax
losses 0.1 0.7
Underprovision (overprovision) in previous
years – 10.5 – 11.6
Deferred profit tax
Origination and reversal of temporary
differences – 0.5 2.7
Recognition of previously unrecognised
tax losses 0.1 –
Change in unrecognised temporary
differences 2.7 0.1
Change in tax rates – 0.3
2.3 3.1
Total profit tax charge in profit
and loss account – 8.2 – 8.5
* Adjusted for accounting policy change pensions.
Reconciliation with applicable profit tax rate 2012* 2013
Result before profit tax 23.5 25.5
Tax on profit at average weighted local profit tax rate 31.1% 7.3 30.6% 7.8
Non-tax-deductible costs 5.5% 1.3 3.9% 1.0
Tax-exempt income / deductions – 14.5% – 3.4 – 11.4% – 2.9
Change in tax rates 0.0% – – 1.2% – 0.3
Losses in reporting year for which no deferred tax asset has been recognised 31.6% 7.4 14.1% 3.6
Change in tax losses from previous years for which no deferred tax asset has been recognised – 0.9% – 0.2 – 2.7% – 0.7
Change in unrecognised deferred tax assets in respect of temporary valuation differences – 11.5% – 2.7 – 0.4% – 0.1
Other differences – 6.4% – 1.5 0.4% 0.1
Tax charge in the profit and loss account 34.9% 8.2 33.3% 8.5
* Adjusted for accounting policy change pensions.
The decrease in the weighted average tax rate from 31.1% to 30.6%
was due in particular to changes in the various countries’ shares in
the result before profit tax. In comparison with 2012, a smaller share
of the result was generated in countries with a relatively higher tax
rate in 2013.
The decrease in the effective tax rate from 34.9% to 33.3% is due
particularly to the decrease in losses in countries in which no full
deferred tax assets are recognized.
122 | TenCate annual report 2013 | FINANCIAL STATEMENTS
37 INTANGIBLE ASSETS Goodwill Development
costs
Other intangible
assets Total
Cost
Balance as at 1 January 2012 214.5 13.3 99.5 327.3
Acquired 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
Acquired through business combinations 6.9 – 10.6 17.5
Additions – 3.3 1.3 4.6
Exchange rate differences – 7.0 – 0.6 – 2.9 – 10.5
Balance as at 31 December 2013 216.9 20.1 112.1 349.1
Amortisation
Balance as at 1 January 2012 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
Amortisation – 2.1 11.0 13.1
Exchange rate differences – 0.2 – 0.1 – 2.0 – 2.3
Balance as at 31 December 2013 2.3 7.5 69.1 78.9
Carrying value
Balance as at 1 January 2012 212.0 10.3 50.7 273.0
Balance as at 31 December 2012 214.5 11.9 43.0 269.4
Balance as at 31 December 2013 214.6 12.6 43.0 270.2
37.1 Amortisation/impairment
The Group recognised no impairment losses on intangible assets in
2013 (2012: € 0).
37.2 Impairment testing for cash generating units which include
goodwill
The following units include goodwill items:
2012 2013
TenCate Grass 118.4 114.4
TenCate Advanced Armour 58.2 57.2
TenCate Advanced Composites 24.3 30.2
Xennia 9.4 9.2
Other activities 4.2 3.6
214.5 214.6
Notes to the consolidated balance sheet
The Group tested the existing goodwill for impairment. The CGU
structure for the Composites & Armour businesses was revised in
2013 as a result of a reorganisation and a change to the reporting
structure due to acquisitions in prior years. As a result of these
changes, the level at which goodwill is tested was brought into line
with the units of TenCate Composites (worldwide) and TenCate
Armour (worldwide). This change has no consequences for the result
of the impairment test.
The realisable value has been determined on the basis of the value in
use. The value in use is based on the future cash flows over the forth-
coming four years, based on historical empirical data, market expec-
tations and strategic plans. No growth rate is applied in the perpetual
cash flow for the period beyond four years. The value in use in 2013
123TenCate annual report 2013 | FINANCIAL STATEMENTS |
pressure. It is expected that the gross margin will rise in the years
ahead as a result of the expected purchasing advantages and contin-
uing reductions in production costs.
TenCate Advanced Armour
The assumptions used for the discount rate and revenue growth are
9.3% and 43% respectively. In the case of a discount rate of 12.9%
and revenue growth of 28%, the realisable value is close to the
carrying value. If the assumed gross margin growth deviates by less
than 3%, the realisable value still exceeds the carrying value.
The success of the development of the TenCate ABDS™ active blast
countermeasure system is expected to make an important contribu-
tion to the growth of the TenCate Advanced Armour unit. Whereas
ABDS generated no revenues in 2013, strong growth is expected in
the years ahead.
If the TenCate ABDS™ active blast countermeasure system is
excluded, the realisable value is close to the carrying value. An impor-
tant assumption in this regard concerns the expected 14% revenue
growth with an unchanged gross margin. Revenues in the defence
market have decreased sharply in recent years. As a result of a
strengthening of the market position, TenCate expects to achieve
growth in the armour market in the years ahead.
Xennia Technology
The assumptions used for the discount rate and revenue growth are
9.4% and 18% respectively. In the case of a discount rate of 12.0%
and revenue growth of 16%, the realisable value is close to the
carrying value. If the assumed gross margin growth deviates by less
than 3%, the realisable value still exceeds the carrying value.
Revenue growth and growth in the gross margin rate are expected in
the future at Xennia Technology as a result of the successful comple-
tion of the review of the business portfolio initiated in 2013 under a
new management team. A sharper focus is being applied to activities
with high added value.
Other units
With regard to the other units it was concluded that an adjustment to
one of these assumptions would not reasonably result in the carrying
value exceeding the realisable value.
has been determined in the same way as in 2012. On the basis of this
test, no goodwill impairment has been recognised. The changes in
2013 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 on government bonds, 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 9.2% to 9.4% (2012: 9.1%
to 9.3%).
Revenue growth
The expected revenue growth is expressed as the compound annual
growth in the first four years of the schedules used to test impairment
and is based on past experience, market expectations and strategic
plans.
Gross margin percentage
The gross margin is the margin based on cost prices (in accordance
with the inventory valuation principles) as a percentage of expected
revenues.
Sensitivity to changes in assumptions
The sensitivity of the principal assumptions has been investigated
and is particularly important with regard to the TenCate Grass,
TenCate Advanced Armour and Xennia Technology units, because in
the event of a relatively small change in the assumptions the carrying
value of these units exceeds the realisable value. The realisable value
exceeds the carrying value of these units by at least 15%.
TenCate Grass
The assumptions used for the discount rate and revenue growth are
9.4% and 3% respectively. In the case of a discount rate of 10.6% and
revenue growth of 1%, the realisable value is close to the carrying
value. If the assumed gross margin growth deviates by less than 3%,
the realisable value still exceeds the carrying value.
In the TenCate Grass unit there were higher raw material costs during
the reporting year, as a result of which the gross margin came under
124 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated balance sheet
38 TANGIBLE FIXED ASSETS Land and buildings
Plant and equipment
Other operating
assets
Assets under
construction Total
Cost
Balance as at 1 January 2012 143.2 453.6 51.2 2.1 650.1
Acquired 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
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
Acquired through business combinations – 1.5 0.3 – 1.8
Additions 0.6 6.1 1.9 1.2 9.8
Disposals – 0.2 – 6.9 – 1.4 – – 8.5
Deconsolidation – 1.7 – 3.2 – 0.4 – – 5.3
Exchange rate differences – 3.4 – 9.4 – 1.3 – 0.1 – 14.2
Balance as at 31 December 2013 138.4 443.8 51.5 3.9 637.6
Depreciation
Balance as at 1 January 2012 67.2 320.1 40.9 – 428.2
Depreciation 5.8 27.7 3.6 – 37.1
Disposals – 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
Depreciation 5.9 25.6 3.3 – 34.8
Disposals – 0.2 – 6.5 – 1.2 – – 7.9
Deconsolidation – 0.5 – 2.9 – – 0.3 – 3.7
Exchange rate differences – 1.4 – 6.6 – 0.6 – – 8.6
Balance as at 31 December 2013 76.2 351.4 44.6 – 0.3 471.9
Carrying value
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
Balance as at 31 December 2013 62.2 92.4 6.9 4.2 165.7
38.1 Impairment and reversal of impairment
The Group recognised no impairment of tangible fixed assets in 2013
(2012: € 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
financial leases.
The net carrying value of these assets as at 31 December 2013 was
€ 5.5 million (31 December 2012: € 4.2 million). The leased buildings,
plant and equipment serve as collateral for the financial lease liabili-
ties (see note 47).
125TenCate annual report 2013 | FINANCIAL STATEMENTS |
38.3 Collateral
As at 31 December 2013 no plant and equipment (2012: € 7.1 million)
were pledged as collateral.
39 INVESTMENTS IN ASSOCIATED COMPANIES AND FINANCIAL
FIXED ASSETS
39.1 Associated companies
The associated companies item at the end of 2013 relates to the 30%
interest in the shares of Hellas Construction Inc and the 25% interest
in the shares of Landscape Solutions B.V. The 49% interest in Green-
Fields (AllSports) UK ltd was sold at carrying value in 2013. The share
in the net income of associated companies amounted to € 0.1 million
(2012: -€ 0.3 million). The Group has the option from December 2011
of increasing its interest in Hellas 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 2013 (2012: € 0). The associated companies have a carrying value
of € 3.9 million as at 31 December 2013 (31 December 2012: € 4.1
million).
Associated companies and joint ventures
The summary financial data have not been adjusted in respect of the
percentage owned by the Group and can be analysed as follows as at
31 December:
2012 2013
Non-current assets 26.9 24.6
Current assets 30.7 34.5
Total assets 57.6 59.1
Current liabilities 21.4 24.8
Non-current liabilities 8.9 3.9
Total liabilities 30.3 28.7
Revenues 111.0 113.3
Costs 112.3 113.0
Profit/(loss) – 1.3 0.3
The changes in the associated companies were as follows:
2012 2013
Balance as at 1 January 4.6 4.1
Divestment – – 0.1
Result – 0.3 0.1
Exchange rate differences – 0.2 – 0.2
Balance as at 31 December 4.1 3.9
39.2 Financial fixed assets
The financial fixed assets comprise long-term receivables and invest-
ments.
The main long-term receivables and investments concern invested
pension assets at a number of American subsidiaries of € 10.0 million
(2012: € 9.6 million) and an advance payment in connection with long-
term lease rights in China and Malaysia amounting to € 2.0 million
(2012: € 2.1 million).
126 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated balance sheet
40 DEFERRED PROFIT TAX ASSETS AND LIABILITIES
The deferred profit tax assets and liabilities recognised in the balance
sheet are attributable to the following items:
Assets Liabilities Net
2012 2013 2012 2013 2012 2013
Intangible assets – – – 7.9 – 10.6 – 7.9 – 10.6
Tangible fixed assets – – – 11.4 – 9.4 – 11.4 – 9.4
Financial fixed assets – 0.1 – – – 0.1
Inventories 6.6 7.3 – – 6.6 7.3
Derivatives 1.3 0.5 – – 1.3 0.5
Other receivables – 0.1 – 0.3 – – 0.3 0.1
Pension provisions 7.5 3.2 – – 7.5 3.2
Other provisions 9.8 9.3 – – 9.8 9.3
Tax value of recognised loss carry-forwards 13.1 12.3 – – 13.1 12.3
Other items 2.5 3.7 – – 2.5 3.7
Deferred profit tax assets/liabilities 40.8 36.5 – 19.6 – 20.0 21.2 16.5
Set-off of assets and liabilities – 10.8 – 12.5 10.8 12.5 – –
Net deferred profit tax assets/liabilities 30.0 24.0 – 8.8 – 7.5 21.2 16.5
The changes in the temporary differences during the financial year
can be analysed as follows:
Balance as at 1 January
2012
Recognised in profit
and loss
Recognised in other
comprehen-sive income
Acquired through
business combinations
Balance as at 31 December
2012
Recognised in profit
and loss
Recognised in other
comprehen-sive income
Acquired through
business combinations
Balance as at 31 December
2013
Intangible assets – 9.1 2.5 – – 1.3 – 7.9 – 0.3 – – 2.4 – 10.6
Tangible fixed assets – 13.1 1.3 – 0.4 – 11.4 2.0 – – – 9.4
Financial fixed assets 0.1 – 0.1 – – – 0.1 – – 0.1
Inventories 5.6 0.8 – 0.2 6.6 0.7 – – 7.3
Derivatives 1.9 – 0.4 – 0.2 – 1.3 – – 0.8 – 0.5
Other receivables 0.7 – 1.0 – – – 0.3 0.4 – – 0.1
Pension provisions 2.2 – 1.1 6.4 – 7.5 0.3 – 4.6 – 3.2
Other provisions 9.6 – 0.1 – 0.3 9.8 – 0.5 – – 9.3
Tax value of recognised loss
carry-forwards 12.9 0.2 – – 13.1 – 0.8 – – 12.3
Other items 2.3 0.2 – – 2.5 1.2 – – 3.7
Deferred profit tax assets/
liabilities 13.1 2.3 6.2 – 0.4 21.2 3.1 – 5.4 – 2.4 16.5
The tax effect of the other comprehensive income in Group equity is
€ 5.4 million (2012: € 6.2 million) and relates to the actuarial results in
respect of pensions and the hedging reserve.
127TenCate annual report 2013 | FINANCIAL STATEMENTS |
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 profit and loss account under cost
of sales.
As at 31 December 2013 trade debtors with a value of € 6.5 million
(2012: € 6.5 million) were encumbered as security for credit facilities
amounting to € 6.5 million (2012: € 6.5 million). € 6.5 million of this
credit facility was utilised as at the end of 2013 (2012: € 6.5 million).
43 OTHER RECEIVABLES 2012 2013
Amount receivable in respect of other taxes 4.3 3.8
Derivatives at fair value 0.3 1.1
Construction contracts 2.1 1.7
Other receivables and prepayments 9.2 11.7
15.9 18.3
Amounts receivable in respect of other taxes relate mainly to reclaim-
able VAT.
As at 31 December 2013 the prepayments amounted to € 5.8 million
(2012: € 6.0 million).
As at 31 December 2013 the total costs and recognised profit associ-
ated with projects in progress, less recognised losses, amounted to
€ 16.3 million (2012: € 20.2 million). Trade debtors included no
amounts deducted in respect of projects in progress commissioned by
third parties (2012: € 0)
44 CASH AND CASH EQUIVALENTS 2012 2013
Bank balances 26.6 21.5
Cash balances 0.1 0.1
Cash and cash equivalents 26.7 21.6
Cash loans, overdrafts – 35.4 – 14.7
Cash in cash flow statement – 8.7 6.9
All amounts were freely available at the end of 2012 and 2013.
The realisation of the deferred profit tax assets depends on the future
taxable profit being higher than the profit from the reversal of taxable
temporary differences. On the basis of a projection of the estimated
taxable profit and the existing fiscal planning possibilities, it is
considered likely that sufficient taxable profit will be generated in
future to realise these deferred profit tax assets.
Deferred profit tax assets not recognised in the balance sheet
As at 31 December 2013 there were € 97.6 million (2012: € 89.4
million) of unused losses available for set-off. No deferred profit tax
asset has been recognised in respect of this amount because it is
currently unlikely that future taxable profit will be available to the
Group for the losses to be set off.
The amount of profit tax concerned as at 31 December 2013 is € 23.5
million (2012: € 22.2 million).
The expiry periods of the unused losses available for set-off are
shown in the table below:
2012 2013
Up to 5 years 17.5 19.3
After 5 years 27.7 30.9
Unspecified period 44.2 47.4
Unused losses available for set-off 89.4 97.6
41 INVENTORIES 2012 2013
Raw materials and manufacturing supplies 60.0 64.2
Semi-manufactures 50.3 47.6
Finished products 116.1 112.0
Inventories 226.4 223.8
In 2013 the reduction in the inventory value included as an expense
amounted to a net recoverable amount of € 8.1 million (2012: € 12.6
million). The reversal of the reduction in the inventory value in 2013
amounted to € 1.3 million (2012: € 0.2 million). The inventory value
included as an expense and the reversal have been stated under cost
of sales.
42 TRADE DEBTORS 2012 2013
Due from third parties 136.2 125.1
Due from associated companies 3.2 3.1
Due from joint ventures 0.6 0.5
Trade debtors 140.0 128.7
128 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated balance sheet
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
certificates thereof) for the period ending on 17 October 2014.
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 amounts relating to 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 to which
hedge accounting is applied and which are 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 distribu-
tion from the reserves.
The balance of the hedging reserve after tax on 31 December 2013 is
–€ 1.6 million (2012: -€ 3.9 million). The change in the hedging reserve
before tax amounts to € 3.1 million. € 3.0 million of this change has
been realised and € 0.1 million is the ineffective portion of the fair
value change to which hedge accounting is applied.
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 2013 at € 0.50 per € 2.50
par value share (2012: € 0.50), payable optionally in cash or as stock
dividend.
2012 2013
€ 0.50 per ordinary share (2012: € 0.50) 13.0 13.1
45 TOTAL SHAREHOLDERS’ EQUITY
A statement of changes in equity can be found on page 108.
45.1 Ordinary shares
Number x 1,000 2012 2013
In issue and fully paid as at 1 January 25,929 26,498
Issued stock dividend 569 294
Other – – 1
In issue and fully paid as at 31 December 26,498 26,791
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 2013 amounts to 26,791,367 ordinary shares of a par
value of € 2.50 (as at 31 December 2012: 26,497,666 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 17 October 2014.
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.
45.2 Repurchased ordinary shares
Number x 1,000 2012 2013
In issue and fully paid as at 1 January 620 584
Own shares for conversion of physical
securities 3 –
Exercise of options – 39 – 66
In issue and fully paid as at 31 December 584 518
Ordinary shares are repurchased to prevent earnings per share being
diluted by the granting of options. No own shares were repurchased
in 2012 and 2013.
129TenCate annual report 2013 | FINANCIAL STATEMENTS |
Weighted average number of ordinary shares
number x 1,000 2012 2013
Ordinary shares in issue on 1 January 25,929 26,498
Effect of ordinary shares held (including
repurchased shares) – 620 – 584
Effect of shares issued in connection with
stock dividend 569 294
Effect of shares issued as result of exercised
option rights 17 17
Weighted average number of ordinary
shares as at 31 December 25,895 26,225
46.2 Diluted earnings per share
The calculation of the diluted earnings per share as at 31 December
2013 is based on the net income of € 19.0 million (2012: € 20.9 million)
attributable to holders of ordinary shares and the weighted average
number of outstanding ordinary shares during the 2013 financial year
of 26,366,474 (2012: 26,040,448), calculated as follows:
2012 2013
Net profit for financial year attributable to
holders of ordinary shares 20.9 19.0
Weighted average number of ordinary shares
number x 1,000 2012 2013
Weighted average number of ordinary shares
as at 31 December 25,895 26,225
Effect of outstanding option rights 145 141
Weighted average number of ordinary
shares (after dilution) as at 31 December 26,040 26,366
47 LONG-TERM DEBTS 2012 2013
Syndicated loan 215.0 190.3
Financial lease liabilities 2.2 2.1
Other loans 4.0 3.7
Total 221.2 196.1
Less: repayment of loans in forthcoming
years – 0.9 – 1.0
220.3 195.1
45.7 Objective with regard to equity and financing
The objective with regard to equity and financing, as in 2012, is to
guarantee the continuity of the Company by means of attractive
returns for shareholders and by guaranteeing benefits for other stake-
holders. The capital structure is adjusted if necessary in line with
economic developments and risks relating to assets.
With regard to financing, 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:
2012 2013
Long-term debts 220.3 195.1
Short-term portion of long-term debts 0.9 1.0
Cash loans, overdrafts 35.4 14.7
Total debt 256.6 210.8
Less: cash and cash equivalents 26.7 21.6
Net debt 229.9 189.2
EBITDA* 90.3 83.5
Net debt / EBITDA 2.55 2.27
* EBITDA in accordance with agreements with banks adjusted to take account of the effect of acquired and divested businesses, non-recurring items and some compo-nents of the net financial expenses, such as currency translation differences: effect in 2013 € 0 (2012: +€ 1.2 million).
46 EARNINGS PER SHARE
46.1 Ordinary earnings per share
The calculation of the ordinary earnings per share as at 31 December
2013 is based on the net income of € 19.0 million (2012: € 20.9 million)
attributable to holders of ordinary shares and a weighted average
number of outstanding ordinary shares during the 2013 financial year
of 26,224,821 (2012: 25,895,322), calculated as follows:
2012 2013
Net profit for financial year attributable to
holders of ordinary shares 20.9 19.0
130 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated balance sheet
The aforementioned syndicated loan is subject to a number of cove-
nants, the principal of which are:
■■ total net debt/EBITDA less than 3.25 at the end of the first
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 financial lease liability relates to a building in Hungary and
machinery in the United Kingdom.
The USD loan with variable interest concerns a $4.0 million loan
(2012: $4.0 million) from the Development Authority of Pike County
Industrial Revenue Bonds. Repayment is due in full in 2018.
Details of the hedging of the interest rate risk borne by the Group can
be found in note 50.4.
2012 Total
2013 Total
2014 < 1 year
2015 1-2 years
2016/18 2-5 years
2019ff > 5 years
Syndicated loan
EUR variable interest 48.6 41.3 41.3
USD variable interest 166.4 149.0 149.0
Financial lease liabilities
EUR fixed interest 8.0% 0.1 –
EUR variable interest 2.0 1.5 0.5 0.5 0.5
GBP variable interest 0.1 –
GBP fixed interest 5.4% - 7.6% – 0.6 0.2 0.2 0.2
Other loans
USD variable interest 3.0 2.9 2.9
EUR interest-free 1.0 0.8 0.3 0.3 0.2
221.2 196.1 1.0 191.3 3.8 –
The original syndicated loan amounted to € 450.0 million. It was
reduced to € 400.0 million in 2013 at the Group’s request. € 190.3
million of this facility was drawn as at 31 December 2013 (2012:
€ 215.0 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 financial 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 2013
the interest margin was 1.20% (2012: 1.20%).
131TenCate annual report 2013 | FINANCIAL STATEMENTS |
At the end of 2013 the bonds amounting to € 114.1 million comprised
government bonds with a direct market listing. The other investments
predominantly have derived market listings.
48.3 Charge stated in the profit and
loss account 2012* 2013
Service costs – 4.3 – 4.1
Interest on liabilities – 14.2 – 12.5
Expected return on plan assets 13.6 11.4
Income from change to pension scheme 3.3 0.1
Pension (expenses)/income – 1.6 – 5.1
* Adjusted for accounting policy change pensions.
The actual return on fund investments amounts to € 19.7 million
(2012: € 26.4 million).
Netherlands
The defined benefit 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%;
■■ 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%.
The board of the pension fund has specified a 2.6% reduction in
pension rights with effect from 1 April 2014 (2.3% from 1 April 2013).
On the basis of the cover ratio as at 31 December 2013, no additional
reduction is expected in 2015. As the expected reductions are taken
into account in the indexation assumption, the effects have been
stated in Group equity through actuarial gains and losses.
48 PENSION LIABILITIES 2012 2013
Defined-benefit pension schemes
Present value of defined benefit obligations 370.2 363.4
Fair value of plan assets 340.6 353.6
29.6 9.8
Asset ceiling 0.2 0.3
Present value of net liabilities of
defined-benefit pension schemes 29.8 10.1
Other liabilities in respect of pensions 12.5 14.0
42.3 24.1
48.1 Changes in the valuation of the liability
as at the reporting date 2012 2013
Balance as at 1 January 332.5 370.2
Service costs 4.3 4.1
Members' contributions 2.9 2.9
Interest costs 14.2 12.5
Benefits paid – 16.1 – 16.1
Income from change to pension scheme – 3.3 – 0.1
Actuarial differences 35.7 – 10.1
Balance as at 31 December 370.2 363.4
48.2 Investments 2012* 2013
Balance as at 1 January 321.0 340.6
Expected return 13.6 11.4
Employers' contributions 6.4 6.2
Members' contributions 2.9 2.9
Actuarial differences 12.8 8.3
Benefits paid – 16.1 – 15.8
Balance as at 31 December 340.6 353.6
* Adjusted for accounting policy change pensions.
Analysis of plan assets as at 31 December 2012 2013
Bonds 176.9 167.5
Securities 119.2 138.0
Commodities 13.0 11.2
Real estate 24.1 21.7
Cash 0.8 8.3
Other assets 6.6 6.9
Plan assets 340.6 353.6
132 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the consolidated balance sheet
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 defined contri-
bution schemes and a number of specific old-age provisions. The prin-
cipal defined 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:
2012 2013
Discount rate as at 31 December 3.4% 3.5%
Expected return on plan assets
as at 31 December 3.4% 3.5%
Future wage increases 2.5% 2.5%
Future pension increases of inactive
participants 0.6% 0.8%
Assumptions with regard to future mortality figures 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 investments is 3.5% (2012: 3.4%).
A 0.1% change in the discount rate would result in a change of
approximately € 0.4 million in the annual expenses (2012: € 0.3
million). A 0.1% change in the discount rate would cause the liability
to rise or fall by approximately € 6.0 million (2012: € 6.0 million).
Historical information 2009 2010 2011 2012* 2013
Present value of defined benefit obligations 295.7 295.8 332.5 370.2 363.4
Fair value of plan assets 298.5 316.7 321.0 340.6 353.6
Present value of net liabilities – 2.8 – 20.9 11.5 29.6 9.8
Experience adjustments arising on obligations of the scheme 4.4 9.4 5.3 – 8.9 8.5
Experience adjustments arising on plan assets 11.8 8.1 – 6.0 12.8 8.3
* Adjusted for changes in pension system.
133TenCate annual report 2013 | FINANCIAL STATEMENTS |
The Group expects to contribute € 6.3 million of employer’s contribu-
tions to defined benefit pension schemes in 2014 (2013: € 6.3 million).
The pension expense in respect of 2014 is estimated at € 5.0 million
(2013: € 5.3 million).
49 PROVISIONSGuarantee /
claims
Reorgani-sation
provision
Other personnel liabilities
Environ-mental Others Total
Balance as at 1 January 2013 5.3 0.5 5.6 2.0 0.8 14.2
Provisions made during the year 5.3 0.7 0.6 – – 6.6
Released to result – 1.2 – – 0.1 – – 0.4 – 1.7
Expenditure in current year – 3.1 – 0.9 – 0.6 – – – 4.6
Exchange rate differences – 0.2 – – – – – 0.2
Balance as at 31 December 2013 6.1 0.3 5.5 2.0 0.4 14.3
Of which short-term
as at 31-12-2012 1.6 0.4 0.3 – 0.5 2.8
as at 31-12-2013 3.9 0.2 0.3 – – 4.4
The amount released to the result has been included in the profit and
loss account as follows:
2012 2013
Cost of sales 2.6 0.2
General management costs 3.3 1.5
Total 5.9 1.7
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 € 1.7 million relates mainly to the lower-
than-expected figure for guarantee claims.
The provision for reorganisations relates to a number of reorganisa-
tions which were nearly all completed during the financial year.
The provision for other personnel liabilities has been formed for
long-service awards and other benefits, such as anniversaries.
The environmental provision has been formed for expected costs of
decontamination of industrial sites, on the basis of functional decon-
tamination (maintenance of business use).
134 | TenCate annual report 2013 | 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 fluctuations, mainly in
exchange rates and interest rates, is hedged using derivatives.
50.1 Fair value versus carrying value
The fair value and carrying value of financial assets and liabilities
stated in the balance sheet are as follows:
2012 2013
Carrying value
Fair value
Carrying value
Fair value
Assets carried at fair value
Interest rate derivatives for which hedge accounting is used – – 0.1 0.1
Long-term receivables and investments 9.6 9.6 12.9 12.9
Other interest rate derivatives – – 0.1 0.1
Currency derivatives 0.3 0.3 0.9 0.9
9.9 9.9 14.0 14.0
Assets carried at amortised cost
Trade debtors and other receivables 156.8 156.8 145.5 145.5
Cash and cash equivalents 26.7 26.7 21.6 21.6
183.5 183.5 167.1 167.1
Liabilities carried at fair value
Interest rate swaps for which hedge accounting is used 5.2 5.2 2.1 2.1
Other interest rate derivatives 0.6 0.6 0.4 0.4
Currency derivatives 1.0 1.0 0.5 0.5
6.8 6.8 3.0 3.0
Liabilities carried at amortised cost
Syndicated loan 215.0 215.0 190.3 190.3
Financial lease liabilities 2.2 2.2 2.1 2.1
Other loans 4.0 4.0 3.7 3.7
Trade creditors and other payables 135.6 135.6 136.2 136.2
Cash loans and overdrafts 35.4 35.4 14.7 14.7
392.2 392.2 347.0 347.0
135TenCate annual report 2013 | FINANCIAL STATEMENTS |
The fair value of interest rate caps is divided into intrinsic value and
time value. The intrinsic value is calculated by discounting the differ-
ence between the contractual and the current interest, multiplied by
the principal amount of the interest rate caps, for the residual term at
the market interest rate. The time value of the caps is calculated on
the basis of the Black & Scholes option valuation model with the
intrinsic value requiring adjustment on the basis of the result.
The result is periodically checked against bank statements.
The fair value of long-term debts is calculated on the basis of the
present value of expected future cash flows from repayments and
interest payments.
The fair value of financial lease liabilities is estimated on the basis of
the present value of future cash flows, 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 reflect the fair value.
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. The changes in the value of the above assets
and liabilities carried at fair value are stated in the profit and loss
account under net financial expenses if no hedge accounting is
applied. The financial instruments valued on the basis of fair value,
and the fair value determination in the above table of financial instru-
ments valued at amortised cost, fall into category 2 as in 2012: no
quoted market price in an active market, with the fair value being
determined indirectly.
Details are given below of the main methods and assumptions used in
estimating the fair value of financial instruments.
The fair value of foreign exchange forward contracts with an under-
lying value below € 5.0 million is based on statements supplied by the
bank; in the case of higher amounts the Group’s own calculation
model is used. In this model the difference between the contractual
and the current forward rate is multiplied by the principal amount of
the contract and discounted at the market interest rate.
The fair value of options is determined on the basis of statements
supplied by banks or on the basis of the Black & Scholes option valua-
tion model.
The fair value of interest rate swaps is calculated by discounting the
difference between the contractual and the current interest, multi-
plied 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.
136 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Other information
50.2 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 sufficient
liquidities are available to meet its liabilities on time, in both normal
and exceptional situations. The original syndicated loan amounted to
€ 450.0 million. It was reduced to € 400.0 million at the Group’s
request in 2013. € 209.0 million of this facility was unutilised as at
31 December 2013 (2012: € 233.6 million). The Group’s policy is to refi-
nance on time.
The term of the financial liabilities as at 31 December 2012 is
as follows:
Carrying value
Expected cash flow (including
interest)2013
< 1 year2014
1-2 years2015/17
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 –
FX forward contracts 1.0 – 1.0 – 1.0 – – –
Total 399.0 – 411.0 – 179.3 – 6.4 – 222.3 – 3.0
The term of the financial liabilities as at 31 December 2013 is
as follows:
Carrying value
Expected cash flow (including
interest)2014
< 1 year2015
1-2 years2016/18
2-5 years
2019 and later
> 5 years
Financial liabilities (excluding derivatives)
Total long-term debts 196.1 – 203.3 – 4.0 – 195.3 – 4.0 –
Cash loans, overdrafts 14.7 – 14.7 – 14.7 – – –
Trade creditors and other payables 136.2 – 136.2 – 136.2 – – –
Derivatives
Interest rate swaps 2.5 – 2.5 – 2.0 – 0.3 – 0.2 –
FX forward contracts 0.5 – 0.5 – 0.5 – – –
Total 350.0 – 357.2 – 157.4 – 195.6 – 4.2 –
137TenCate annual report 2013 | FINANCIAL STATEMENTS |
The age of the trade debtors and the related impairments is as
follows:
2012 2013
Gross Provision Gross Provision
Not due – 60 days
overdue 130.5 0.4 121.3 0.6
60 – 120 days
overdue 6.3 0.1 5.7 0.4
120 – 360 days
overdue 4.5 1.5 2.6 0.7
Over 360 days
overdue 5.1 4.4 6.6 5.8
Balance as at
31 December 146.4 6.4 136.2 7.5
The movements in the provision for trade debtors are as follows:
2012 2013
Balance as at 1 January 7.0 6.4
Charged to profit and loss account 1.4 2.6
Released to result – 0.9 – 0.6
Written off during the year – 1.1 – 0.7
Exchange rate differences – – 0.2
Balance as at 31 December 6.4 7.5
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 Credit risk
Credit risk is the risk of a financial loss for the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. Credit risks result in particular from trade debtors and,
to a more limited extent, investments in securities and derivatives.
The Group’s exposure to credit risk is mainly determined by the
specific 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 specified 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 guar-
anteed 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 have not been processed and are still present.
The Group does not demand collateral for trade and other receivables.
Impairments are stated in the profit and loss account as cost of sales.
The Group has no particular concentration risks in respect of trade
debtors.
The carrying value of the financial assets reflects the maximum
exposure to credit risk. The maximum exposure is as follows:
2012 2013
Trade debtors 140.0 128.7
Other (long-term) receivables 26.4 29.7
Cash and cash equivalents 26.7 21.6
FX forward contracts and options 0.3 0.9
Interest rate caps – 0.2
Total 193.4 181.1
138 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Other information
50.4 Interest rate risk
99% of the interest-bearing debts have a variable interest rate (2012:
100%). 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 are used for this
purpose. The impact of changes in the value of these derivatives 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.
At the end of 2013 the outstanding interest rate instruments are as
follows:
Instrument Maturity Principal Interest rate conditions
Interest rate swap 02-01-18 $ 4 million received variable, payment 4.47% fixed
Interest rate swap 31-12-14 € 30 million received variable, payment 2.81% fixed
Interest rate swap 31-12-14 $ 45 million received variable, payment 2.60% fixed
Interest rate swap 31-12-15 $ 60 million received variable, payment 1.19% fixed
Interest rate cap 31-12-16 € 50 million exercise price 3%
Interest rate cap 31-12-16 $ 50 million exercise price 3%
The Group values the interest rate derivatives at fair value (see
section 50.1). Of the fair value of the interest rate derivatives as at
31 December 2013, € 2.5 million has been included in trade creditors
and other payables and € 0.2 million in Other receivables (2012: € 5.8
million in trade creditors and other payables).
The table below shows the periods in which the cash flows relating to
interest rate derivatives that are the subject of cash flow hedge
accounting are expected to take place and in which they will affect
the result.
2012Carrying
valueExpected cash flow < 1 year 1-2 years 2-5 years
Interest rate swaps
Assets – – – – –
Liabilities 5.2 – 5.2 – 3.1 – 1.8 – 0.3
2013Carrying
valueExpected cash flow < 1 year 1-2 years 2-5 years
Interest rate swaps
Assets – – – – –
Liabilities 2.1 – 2.1 – 1.9 – 0.2 –
Interest rate caps
Assets 0.1 – – – –
139TenCate annual report 2013 | FINANCIAL STATEMENTS |
Competition risk
The Group hedges the estimated currency risk of the expected
purchases and sales for at least the forthcoming six months as far as
possible. The competition risk is offset where possible against the
translation risk on the results of subsidiaries outside the eurozone.
Any remaining risks are hedged using currency options.
Translation risk
The translation risk on the result of subsidiaries outside the eurozone
is offset internally where possible against euro-denominated reve-
nues of subsidiaries outside the eurozone, as well as purchases in
USD by subsidiaries in the eurozone.
50.5 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 denomi-
nated in foreign currencies, to the extent that these may have a mate-
rial 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 as far as possible to hedge intercompany loans in foreign curren-
cies to subsidiaries which report in the respective currency.
Remaining currency risks on loans to subsidiaries are hedged using
foreign exchange forward contracts.
140 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Other information
50.6 Sensitivity analyses
In managing interest rate and currency risks, the Group’s aim is to
limit the effect of short-term fluctuations 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.
The effect of a general interest rate rise of one percentage point on
the pre-tax result in 2013 is estimated at -€ 1.0 million (2012: -€ 0.6
million). The effect of a general interest rate rise of one percentage
point on equity is estimated at +€ 1.2 million before tax (2012: € 2.8
million) due to the use of hedge accounting.
The effect of a general rise of one per cent in the value of the euro
against other currencies on the result after profit tax in 2013 is € 0
(2012: € 0). The effect of a general rise of one per cent in the value of
the euro against other currencies on equity at the end of 2013 is esti-
mated at € 2.8 million (2012: € 3.1 million).
Exposure
The exposure to currency risks in respect of trading transactions of
Group entities on the reporting date is as follows:
2012 2013
USD GBP EUR USD GBP EUR
Transaction risk 1.9 1.8 2.7 6.7 0.8 1.1
Competition risk 3.4 2.2 20.6 – 5.1 2.0 29.7
Risk before hedging 5.3 4.0 23.3 1.6 2.8 30.8
Forward contracts 3.3 – 1.1 – 2.2 – 3.4 – 0.8 – 0.9
Option contracts 3.8 – 2.1 – 19.7 10.2 – 1.5 – 28.8
Risk after hedging 12.4 0.8 1.4 8.4 0.5 1.1
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 Euro-
pean subsidiaries.
Due to financial market restrictions, the risk relating to Asian subsidi-
aries is not hedged.
The GBP risk relates mainly to trade receivables and expected reve-
nues of European subsidiaries.
The EUR risk relates mainly to trade receivables and expected reve-
nues in euros of Ten Cate Thiolon Middle East.
The Group carries options and foreign exchange forward contracts at
fair value. The fair value of the options used to hedge future transac-
tions as at 31 December 2013 is € 0 (2012: € 0.1 million). This amount
has been included in other receivables. The net fair value of the
foreign exchange forward contracts is € 0.4 million (2012: -€ 0.8
million). € 0.9 million of this amount has been included in other receiv-
ables and € 0.5 million in other liabilities (2012: € 0.2 and € 1.0 million
respectively).
141TenCate annual report 2013 | FINANCIAL STATEMENTS |
In 2013 the Group included expenses of € 9.0 million in the profit and
loss account in respect of operating leases (2012: € 8.8 million).
52 INVESTMENT LIABILITIES
In 2013 the Group entered into contractual liabilities for the purchase
of tangible fixed assets. The amount of the liabilities as at
31 December 2013, after deduction of advance payments already
made during the financial year, is € 2.0 million (2012: € 0.6 million).
50.7 ISDA master agreements
The Group has entered into derivatives on the basis of International
Swaps and Derivatives Association (ISDA) master agreements. Under
these agreements, for each derivative and each currency, the net
amount payable by a party to the counterparty on a particular date is
settled. In certain circumstances, such as bankruptcy, all transactions
under the master agreement are cancelled and the net value of all
transactions is settled in a single amount.
The ISDA master agreements do not fulfil the criteria for the netting
of balance sheet positions, because the Group currently has no legally
enforceable right to set off the outstanding amounts. The netting of
the derivatives on the basis of ISDA master agreements is as follows:
2012 2013
Gross Set-off Net Gross Set-off Net
Financial assets
Interest rate caps – – – 0.2 – 0.2
Interest rate swaps – – – – – –
Currency options 0.1 – 0.1 – – –
FX forward contracts 0.2 – 0.2 – 0.9 – 0.3 0.6
0.3 – 0.2 0.1 1.1 – 0.3 0.8
Financial liabilities
Interest rate swaps 5.8 – 5.8 2.5 – 2.5
FX forward contracts 1.0 – 0.2 0.8 0.5 – 0.3 0.2
6.8 – 0.2 6.6 3.0 – 0.3 2.7
51 LIABILITIES NOT SHOWN IN THE BALANCE SHEET
Operating lease as lessee
The expected cash flows under non-cancellable operating leases are
as follows:
2012 2013
Less than one year 7.4 7.6
Between one and five years 17.7 20.0
More than five years 25.4 21.5
Net result 50.5 49.1
The Group leases buildings, plant, vehicles and office equipment
under operating leases. The leased buildings have a term of ten to
fifteen 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
five years.
142 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Other information
54.2 Directors’ remuneration
The remuneration of the members of the Executive Board is as
follows:
in thousands of euros L. de Vries B. Cornelese 1
2012 2013 2012 2013
Periodic
remuneration 675 675 360 240
Results-related pay
in respect of
previous year 337 – 92 –
Pension costs 221 226 105 56
Option costs 455 424 80 –
1,688 1,325 637 296
1 Up to 31 August 2013.
The fixed remuneration paid to Mr De Vries is the same as in 2012.
Mr De Vries has a final-salary pension plan. Mr De Vries’ results-
related pay amounts to a maximum of 50% of the fixed salary.
Mr De Vries received no variable salary component in 2013 in respect
of 2012. The variable component paid to Mr Cornelese is a maximum
of 40% of the fixed salary. Mr Cornelese received no variable salary
component in 2013 in respect of 2012.
As at 31 December 2013 Mr De Vries held 208,726 shares in the
Company (31 December 2012: 203,160 shares) and 480,000 options
(31 December 2012: 420,000 options). In 2013 Mr De Vries was
granted 60,000 options (2012: 60,000) with an exercise price of
€ 17.73.
In 2013 Mr Cornelese was granted 40,000 options (2012: 30,000) with
an exercise price of € 17.73. These options lapsed in 2013 as a result
of Mr Cornelese’s departure from the company.
On 2013 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 € 98,000 (2012: € 185,000),
comprising € 84,000 (2012: € 139,000) for the CEO and € 14,000 (2012:
€ 46,000) for the former CFO. The CEO was also provided with
compensation of € 1.2 million in 2012 to resolve a legal dispute
caused by the company in 1995. The total amount in 2013 for the CEO
is € 1.4 million (2012: € 3.1 million) and for the former CFO € 0.3 million
(2012: € 0.7 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 origi-
nally 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 confident with regard to the remainder of the proceedings.
In the spring of 2011, FieldTurf Tarkett (“FieldTurf”) instituted legal
proceedings against TenCate. These concerned alleged deficiencies 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 confident with regard to the outcome of the legal proceed-
ings and expects no material financial damage.
54 RELATED PARTIES
54.1 Identity of related parties
The Group’s related parties are its subsidiaries, associated compa-
nies and other participating interests, joint ventures, Stichting
Pensioenfonds Koninklijke Ten Cate and the members of the Executive
and Supervisory Boards.
143TenCate annual report 2013 | FINANCIAL STATEMENTS |
55 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
financial reporting and estimates, as well as the application of such
principles and estimates. Information on assumptions and uncertain-
ties regarding estimates which entail a substantial risk of a material
adjustment in the subsequent financial 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
outflow of funds will be necessary.
The result of this is stated in note 49.
■■ With regard to impairments, an examination has been carried
out to determine whether the realisable value of any cash gener-
ating unit is lower than the carrying value. This is not the case in
2013 and 2012. 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.
Mr De Vries is 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 65.
The remuneration of the members of the Supervisory Board is as
follows:
in thousands of euros 2012 2013
J.C.M. Hovers – Chairman 1, 2 50 50
P.P.A.I. Deiters – Vice-Chairman 2 35 35
F.A. van Vught 3 9 –
E. ten Cate 1* 35 35
R. van Gelder 1, 4 33 8
P.F. Hartman 2*, 5 – 18
162 146
1 Member of the Financial Committee.2 Member of the combined Remuneration, Selection and Appointments Committee.3 2012: Up to 19 April 2012.4 2013: Up to 31 March 2013.5 2013: From 1 July 2013.* Chairman.
Mr Deiters received additional remuneration amounting to US$15,000
in 2012 and 2013 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 2013.
54.3 Transactions with associated companies, other participating
interests and joint ventures
During the 2013 financial year, associated companies, other (non-con-
solidated) participating interests and joint ventures purchased goods
from the Group amounting to € 14.4 million (2012: € 17.5 million). As at
31 December 2013 the outstanding trade receivables due to the Group
from associated companies amounted to € 3.3 million (2012: € 3.2
million) and from joint ventures € 1.0 million (2012: € 1.2 million). As at
31 December 2013 outstanding trade liabilities to associated compa-
nies and joint ventures amounted to € 0.5 million (2012: € 0).
Transactions with associated companies, other participating interests
and joint ventures take place on an objective, business basis.
54.4 Subsidiaries
A list of (significant) subsidiaries and participating interests can be
found inside the back cover of this report.
144 | TenCate annual report 2013 | FINANCIAL STATEMENTS
56 COMPANY PROFIT AND LOSS ACCOUNT
In millions of euros note 2012* 2013
Result from participating interests after profit tax 58 16.4 10.2
Other results after profit tax 4.5 8.8
Net income 20.9 19.0
57 COMPANY BALANCE SHEET (BEFORE APPROPRIATION OF THE RESULT)
In millions of euros note 31 December 2012 31 December 2013
FINANCIAL FIXED ASSETS 58
Participating interests in subsidiaries 692.3 606.1
Loans to subsidiaries 114.7 181.5
Deferred profit tax assets 25.7 18.9
Total non-current assets 832.7 806.5
CURRENT ASSETS
Due from subsidiaries 0.7 1.5
Other receivables 0.8 0.2
Cash and cash equivalents 1.0 1.4
Total current assets 2.5 3.1
Total assets 835.2 809.6
EQUIT Y
Share capital 60 66.2 67.0
Share premium reserve 62 43.4 42.6
Legal reserve 63 1.9 –5.7
Other reserves 64 324.8 351.4
Undistributed result 20.9 19.0
457.2 474.3
Provisions 66 1.1 0.9
Non-current liabilities 67 219.4 190.3
Current liabilities 68 157.5 144.1
Total equity and liabilities 835.2 809.6
* Adjusted for accounting policy changes in pension system.
Company financial statements
145TenCate annual report 2013 | FINANCIAL STATEMENTS |
GENERAL INFORMATIONAccounting policies
The parent company financial statements of Royal Ten Cate form an
inseparable whole with the 2013 financial 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 finan-
cial 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 financial state-
ments of Royal Ten Cate are the same as those applying to the
consolidated financial statements. Participating interests over which
significant influence is exercised are valued in accordance with the
equity method. The consolidated financial 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 financial 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.
58 FINANCIAL FIXED ASSETSInterest in
subsidiariesLoans to
subsidiaries
Deferred profit tax
assets Total
Balance as at 1 January 692.3 114.7 25.7 832.7
Investments/capital contributions 20.4 – – 20.4
Actuarial gains and losses of pensions 18.2 – – 18.2
Translation differences – 11.5 – 4.4 – – 15.9
Loans granted – 114.1 – 114.1
Repayment of loans – – 42.9 – – 42.9
Results of participating interests 10.2 – – 10.2
Dividend of participating interests – 123.5 – – – 123.5
Change in deferred tax – – – 6.8 – 6.8
Balance as at 31 December 606.1 181.5 18.9 806.5
Royal Ten Cate is at the head of the Group and has capital interests in
the subsidiaries stated on the cover.
Notes to the company financial statements
146 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the company financial statements
63.3 Other legal reserves 2012 2013
Balance as at 1 January 3.3 2.7
Change – 0.6 1.8
Balance as at 31 December 2.7 4.5
The other legal reserves concern capitalised development costs,
undistributable reserves of subsidiaries and the hedging reserve.
Balance of legal reserves as at 31 December 1.9 – 5.7
64 OTHER RESERVES 2012 2013
Balance as at 1 January * 291.7 324.8
Actuarial gains and losses of pensions * –16.5 13.6
Transferred to Other legal reserves 0.6 –1.8
Added from 2011 / 2012 result 45.6 13.3
Share and option plans 2.0 1.6
Issue of repurchased shares for share savings
plan/option plan 0.5 1.0
Acquisition of non-controlling interest – –1.1
Balance as at 31 December 324.8 351.4
* Adjusted for accounting policy change pensions.
65 OPTION PLAN
Royal Ten Cate operates a stock option plan for the management,
established by the Supervisory Board. Those eligible for options are
members of the Executive Board, the corporate and group directors
and a number of officers of critical importance to the company.
The implementation of the share option plan is supervised by the
compliance officer.
The options are granted on a conditional basis. During the vesting
period of three to five years, a performance condition must be
fulfilled. This condition is that the earnings per share, adjusted to take
account of non-recurring items, over the past three, four or five years
must have increased on average by at least a percentage equal to
inflation plus 3% per year. If this performance condition has been
fulfilled, the options become unconditional and may be exercised,
unless restrictions have been imposed by the Netherlands Authority
for the Financial Markets.
59 EQUITY
The equity in the parent company financial statements corresponds to
the equity in the consolidated financial statements. A statement of
changes in equity can be found on page 108.
60 CALLED AND PAID-UP CAPITAL 2012 2013
Authorised share capital 200.0 200.0
Of which not issued 133.8 133.0
66.2 67.0
61 ORDINARY SHARES 2012 2013
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 2012 2013
Ordinary shares 25,928,914 and 26,497,666 64.8 66.2
Issued stock dividend 568,752 and 293,701 1.4 0.8
Balance as at 31 December 66.2 67.0
62 SHARE PREMIUM RESERVE 2012 2013
Balance as at 1 January 44.8 43.4
Issued stock dividend – 1.4 – 0.8
Balance as at 31 December 43.4 42.6
The share premium reserve is available for distribution to share-
holders.
63 LEGAL RESERVE
63.1 Translation differences 2012 2013
Balance as at 1 January 7.0 3.1
Change – 3.9 – 11.7
Balance as at 31 December 3.1 – 8.6
63.2 Hedging reserve 2012 2013
Balance as at 1 January – 4.5 – 3.9
Change 0.6 2.3
Balance as at 31 December – 3.9 – 1.6
147TenCate annual report 2013 | FINANCIAL STATEMENTS |
The term of the options totals eight years for the option series to
2007 and ten to twelve years for the option series from 2007 onward.
The exercise period is five years for the option series to 2007 and
seven years for the option series from 2007. The vesting period is
three to a maximum of five years.
The option exercise price is equivalent to the average price of the
Royal Ten Cate share on Euronext Amsterdam nv on the five stock
exchange trading days following publication of the annual figures.
Each granted option right lapses on termination of employment other
than as a result of retirement.
In principle, options amounting to approximately 1.5% of the total
number of shares in issue will be granted in any one year. The exer-
cise of options is subject to the restrictions laid down in the Securi-
ties Transactions Supervision Act.
65.1 Granting of options in 2014
On 26 February 2014 it was intended to grant 300,500 conditional
options at the average market price during the five stock exchange
trading days following publication of the annual results on
27 February 2014. The distribution is as follows:
01-03-2013* 27-02-2014**
Members of the Executive Board 100,000 60,000
Management and management support staff 224,500 240,500
324,500 300,500
* Final.
** Provisional.
148 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the company financial statements
65.2 Statement of movements in options of the Executive Board
in 2013
L. de Vries
Issued on Term untilNumber of
optionsExercise
price
Exercised/lapsed to
2012Exercised in
2013Lapsed in
2013Outstanding
31-12-2013Exercisable
31-12-2013
22-02-05 22-02-13 50,000 15.17 50,000 – – – –
01-03-06 01-03-14 60,000 23.63 – – – 60,000 60,000
28-02-07 28-02-17 60,000 25.77 – – – 60,000 60,000
05-03-08 05-03-18 60,000 22.50 – – – 60,000 60,000
03-03-09 03-03-19 60,000 11.70 – – – 60,000 60,000
03-03-10 03-03-20 60,000 18.96 – – – 60,000 60,000
01-03-11 01-03-21 60,000 27.38 – – – 60,000 –
28-02-12 28-02-22 60,000 24.67 – – – 60,000 –
01-03-13 01-03-23 60,000 17.73 – – – 60,000 –
530,000 50,000 – – 480,000 300,000
27-02-14 27-02-24 60,000
B. Cornelese
Issued on Term untilNumber of
optionsExercise
price
Exercised/lapsed to
2012Exercised in
2013Lapsed in
2013Outstanding
31-12-2013Exercisable
31-12-2013
28-02-12 28-02-22 30,000 24.67 – – 30,000 – –
01-03-13 01-03-23 40,000 17.73 – – 40,000 – –
70,000 – – 70,000 – –
No options were exercised by the Executive Board in 2012 and 2013.
In February 2014 it was intended to grant 60,000 options. 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.
149TenCate annual report 2013 | FINANCIAL STATEMENTS |
The fair value of the granted options on the grant date has been
determined on the following basis:
2012 2013
Price on grant date (15-day average) € 24.96 € 17.36
Exercise price € 24.67 € 17.73
Expected volatility 39.7% 40.1%
Expected option term 8 years 10 years
Expected dividend yield 2.35% 3.86%
Risk-free interest rate 1.80% 1.05%
65.3 Statement of movements in options of management and
management support staff in 2013
Issued on Term untilNumber of
optionsExercise
price
Exercised/lapsed to
2012Exercised in
2013Lapsed in
2013Outstanding
31-12-2013Exercisable
31-12-2013
22-02-05 22-02-13 102,400 15.17 72,000 17,000 13,400 – –
01-03-06 01-03-14 141,200 23.63 52,400 – – 88,800 88,800
28-02-07 28-02-17 145,000 25.77 52,500 – – 92,500 92,500
05-03-08 05-03-18 207,000 22.50 79,000 2,000 – 126,000 126,000
03-03-09 03-03-19 176,250 11.70 34,500 34,000 – 107,750 107,750
03-03-10 03-03-20 226,500 18.96 16,500 13,500 7,500 189,000 189,000
01-03-11 01-03-21 246,000 27.38 16,500 – 7,500 222,000 –
28-02-12 28-02-22 219,500 24.67 1,000 – 8,000 210,500 –
01-03-13 01-03-23 224,500 17.73 – – – 224,500 –
1,688,350 324,400 66,500 36,400 1,261,050 604,050
27-02-14 27-02-24 240,500
65.4 Complete statement of movements in options in 2013
Issued on Term untilNumber of
optionsExercise
price
Exercised/lapsed to
2012Exercised in
2013Lapsed in
2013Outstanding
31-12-2013Exercisable
31-12-2013
22-02-05 22-02-13 152,400 15.17 122,000 17,000 13,400 – –
01-03-06 01-03-14 201,200 23.63 52,400 – – 148,800 148,800
28-02-07 28-02-17 205,000 25.77 52,500 – – 152,500 152,500
05-03-08 05-03-18 267,000 22.50 79,000 2,000 – 186,000 186,000
03-03-09 03-03-19 276,250 11.70 34,500 34,000 – 207,750 207,750
03-03-10 03-03-20 286,500 18.96 16,500 13,500 7,500 249,000 249,000
01-03-11 01-03-21 306,000 27.38 16,500 – 7,500 282,000 –
28-02-12 28-02-22 309,500 24.67 1,000 – 38,000 270,500 –
01-03-13 01-03-23 324,500 17.73 – – 40,000 284,500 –
2,328,350 374,400 66,500 106,400 1,781,050 944,050
27-02-14 27-02-24 300,500
66,500 options were exercised in 2013 (2012: 38,750). The weighted
average share price on the exercise date for share options exercised
in 2013 was € 21.35 (2012: € 21.02).
150 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Notes to the company financial statements
69 AUDITOR’S FEES
The following fees of KPMG Accountants N.V. and the other entities
affiliated with 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
in thousands of euros 2012 2013
Examination of the financial statements 820 755
Other audit assignments 210 189
Other non-audit services 190 146
Total 1,220 1,090
70 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 most
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 compa-
nies included in the tax group.
We also refer to the notes in section 53 concerning contingent liabili-
ties. Guarantees have also been issued for a Dutch subsidiary and a
number of foreign subsidiaries.
Almelo, 26 February 2014
Executive Board
L. de Vries, Chairman
Supervisory Board
J.C.M. Hovers, Chairman
P.P.A.I. Deiters, Vice-Chairman
E. ten Cate
P.F. Hartman
65.5 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.
number of shares 2012 2013
Balance as at 1 January 620,321 584,287
Own shares for conversion of physical
securities 2,716 –
Exercise of options – 38,750 – 66,500
Outstanding and fully paid
as at 31 December 584,287 517,787
66 PROVISIONS 2012 2013
Guarantee and claims 1.1 0.9
Other items – –
Balance as at 31 December 1.1 0.9
The term of the provisions exceeds one year.
67 LONG-TERM LIABILITIES 2012 2013
Syndicated loan 215.0 190.3
Other items 4.4 –
Balance as at 31 December 219.4 190.3
The conditions of the syndicated loan can be found in note 48 in the
notes to the consolidated balance sheet.
68 SHORT-TERM LIABILITIES 2012 2013
Cash loans, overdrafts 145.6 98.5
Owed to consolidated subsidiaries 4.9 42.3
Trade creditors and other payables 7.0 3.3
Balance as at 31 December 157.5 144.1
The short-term liabilities are due in less than one year.
151TenCate annual report 2013 | FINANCIAL STATEMENTS |
INDEPENDENT AUDITOR’S REPORT
To the General Meeting of Shareholders of Royal Ten Cate
Report on the financial statements
We have audited the accompanying 2013 financial statements of
Royal Ten Cate, Almelo, as set out on pages 100 to 150 of this report.
The financial statements include the consolidated financial state-
ments and the company financial statements. The consolidated finan-
cial statements comprise the consolidated balance sheet as at
31 December 2013, the consolidated profit and loss account,
the consolidated statement of comprehensive income, the consoli-
dated statement of changes in group equity and the consolidated
cash flow statement for the year then ended, and notes, comprising a
summary of the significant accounting policies and other explanatory
information. The company financial statements comprise the company
balance sheet as at 31 December 2013, the company profit 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 financial 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 deems necessary to enable the prepara-
tion of financial 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 financial state-
ments 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 financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the financial
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 financial statements
in order to design audit procedures that are appropriate in the circum-
stances, 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 financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion with respect to the consolidated financial statements
In our opinion, the consolidated financial statements give a true and
fair view of the financial position of Royal Ten Cate as at 31 December
2013 and of its result and its cash flows 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 financial statements give a true and fair
view of the financial position of Ten Cate as at 31 December 2013 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 deficiencies to report as a
result of our examination as to whether the annual 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 annual report, to the extent we can assess, is consistent with
the financial statements as required by Section 2:391 sub 4 of the
Netherlands Civil Code.
Amstelveen, 26 February 2014
KPMG ACCOUNTANTS N.V.
T. van der Heijden RA
Other information
152 | TenCate annual report 2013 | FINANCIAL STATEMENTS
. Other information
PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO
APPROPRIATION OF PROFIT
(Article 30)
Summary of the provisions of the articles of association
1. Distributions on shares may not exceed the amount of the
distributable equity.
2. Subject to the approval of the supervisory board, the executive
board is authorized to determine the part of the profit that will
be reserved.
3. The profit remaining after reservation pursuant to article 30.2 is
at the disposal of the general meeting.
4. Profits will be distributed after adoption of the financial state-
ments showing that this is justified.
5. Subject to the approval of the supervisory board, the executive
board may decide to make interim distributions of dividends on
shares, provided that the requirements of article 30.1 have
been complied with as shown by an interim financial statement
of assets and liabilities in accordance with applicable legal
provisions.
6. Shares held by the company in its own capital shall be
disregarded when calculating the amount of any distribution.
7. Sections 2:104 and 2:105 of the Dutch Civil Code apply to
distributions to shareholders.
PROPOSED APPROPRIATION OF PROFIT
In millions of euros 2012* 2013
Net income 20.9 19.0
Added to other reserves in accordance with
article 30, paragraph 2 of the articles of
association – 8.1 – 4.5
12.8 14.5
Net change in legal reserves 0.6 – 1.8
13.4 12.7
Undistributed dividend balance from
previous year – 0.4
13.4 13.1
Payment of € 0.50 and € 0.50 dividend to
holders of ordinary shares in accordance
with article 30 paragraph 3 of the articles of
association – 13.0 – 13.1
Undistributed dividend balance at
year-end, which is transferred to the
relevant account 0.4 –
* Adjusted for accounting policy change pensions.
153TenCate annual report 2013 | FINANCIAL STATEMENTS |
154 | TenCate annual report 2013 | FINANCIAL STATEMENTS
Ten-year summary
in millions of euros unless stated otherwise 20041 2005 2006 2007 2008 2009 2010 2011 20123 2013
CONSOLIDATED PROFIT
AND LOSS ACCOUNT
Revenues 641.0 686.5 770.5 886.0 1,032.6 842.1 984.5 1,138.8 1,049.0 1,012.0
EBITDA 53.8 57.8 73.2 102.1 126.1 75.4 119.5 137.5 87.2 83.5
EBITA 34.9 39.2 51.1 73.0 95.4 41.5 85.0 102.5 50.1 48.7
Operating result (EBIT) 34.6 38.5 50.1 69.4 83.8 32.7 74.6 89.6 35.6 35.6
Net financial expenses – 6.8 – 4.6 – 8.0 – 11.3 – 13.7 – 12.7 – 10.0 – 11.3 – 12.1 – 10.1
Profit tax – 9.2 –11.5 – 11.4 – 11.9 – 19.1 – 5.6 – 17.9 – 18.7 – 8.2 – 8.5
Share in net income of associated
companies 5.1 8.1 45.4 0.3 – 8.7 – 1.3 – 1.3 – 0.3 0.1
Result after profit tax 23.7 30.5 76.1 46.5 51.0 23.1 45.4 58.3 15.0 17.1
Non-controlling interest – 0.1 – – 0.1 – 0.1 0.1 0.8 0.6 0.4 5.9 1.9
Net profit 23.6 30.5 76.0 46.4 51.1 23.9 46.0 58.7 20.9 19.0
Dividend 10.2 12.5 16.2 18.8 20.4 15.0 18.8 24.0 13.0 13.1
EBITA in % of revenues 5.4% 5.7% 6.6% 8.2% 9.2% 4.9% 8.6% 9.0% 4.8% 4.8%
Return on average net
invested capital 2 13.5% 15.3% 14.4% 13.1% 13.4% 5.7% 12.1% 13.1% 6.2% 6.4%
1 Figures based on Dutch GAAP.
2 Prior to 2007, based on net invested capital at year-end.
3 Adjusted for accounting policy change pensions.
155TenCate annual report 2013 | FINANCIAL STATEMENTS |
20041 2005 2006 2007 2008 2009 2010 2011 20122 2013
CONSOLIDATED BAL ANCE SHEET
Intangible assets 12.1 13.8 12.4 136.8 212.1 203.8 242.8 273.0 269.4 270.2
Tangible fixed assets 118.8 161.4 165.8 218.1 247.4 214.7 214.2 221.9 196.7 165.7
Financial fixed assets 19.9 35.2 18.3 19.8 25.1 45.3 34.2 36.8 47.0 42.1
Total non-current assets 150.8 210.4 196.5 374.7 484.6 463.8 491.2 531.7 513.1 478.0
Inventories 138.6 157.5 157.7 176.2 211.5 155.0 216.9 267.9 226.4 223.8
Receivables 98.8 125.0 128.2 166.2 187.7 116.9 169.8 181.1 159.7 147.1
Securities and cash 2.7 4.6 6.7 4.8 5.4 12.8 11.6 22.7 26.7 21.6
Total current assets 240.1 287.1 292.6 347.2 404.6 284.7 398.3 471.7 412.8 392.5
Total assets 390.9 497.5 489.1 721.9 889.2 748.5 889.5 1,003.4 925.9 870.5
Equity 146.5 181.8 238.7 310.1 366.9 380.8 438.5 465.8 457.2 474.3
Non-controlling interest 0.1 – 0.2 0.3 5.1 4.1 3.8 3.7 – 1.9 – 1.0
Group equity 146.6 181.8 238.9 310.4 372.0 384.9 442.3 469.5 455.3 473.3
Provisions 52.1 56.1 43.8 40.8 43.5 40.5 32.0 50.6 65.3 45.9
Long-term debts 74.1 130.2 63.5 222.3 316.2 192.0 195.2 275.1 220.3 195.1
Banks and short-term loans 24.6 27.1 30.4 12.9 20.3 16.3 57.1 36.3 36.3 15.7
Other short-term debts 93.5 102.3 112.5 135.5 137.2 114.8 162.9 171.9 148.7 140.5
Total liabilities 390.9 497.5 489.1 721.9 889.2 748.5 889.5 1,003.4 925.9 870.5
Group equity/total equity 38% 37% 49% 43% 42% 51% 50% 47% 49% 54%
Acquisitions /(de)consolidations 29.2 40.8 – 63.0 175.1 88.1 – 3.3 24.7 34.8 15.7 18.0
Investments in tangible and intan-
gible fixed assets 12.0 26.2 43.0 62.9 48.0 17.3 21.3 25.7 16.6 14.4
Working capital 143.9 180.2 173.4 206.9 262.0 157.1 223.8 277.1 237.4 230.4
Depreciation and amortisation 19.2 19.3 23.1 32.7 42.3 42.7 44.9 47.9 51.6 47.9
Number of staff years at year-end 3,634 3,578 3,532 4,020 4,437 3,805 4,271 4,353 4,454 4,256
Number of shares outstanding at
year-end (x 1,000) 20,472 20,784 21,063 23,556 23,967 25,068 25,502 25,929 26,498 26,791
Net earnings per € 2.50 share 1.17 1.48 3.66 2.04 2.18 0.97 1.84 2.31 0.81 0.72
Dividend per share in euros 0.50 0.60 0.70 0.80 0.85 0.60 0.75 0.95 0.50 0.50
Closing price in euros 13.55 21.50 23.21 21.27 16.05 18.43 28.00 21.26 19.87 22.90
1 Figures based on Dutch GAAP.
2 Adjusted for accounting policy change pensions.
156 | TenCate annual report 2013 | FINANCIAL STATEMENTS
Business model TenCate’s business model focuses on the
business model for 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
profitability.
Composite A combination of two or more advanced
materials (e.g. based on carbon fibre, glass
fibre 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 compa-
nies must adhere for good governance and
on which they are accountable.
Good, efficient and responsible management
of a company, on which the company
accounts to all its stakeholders.
CSR Performance
Ladder
Certification standard with five 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 net financial expenses and
profit tax.
EBITA Earnings before net financial expenses, profit
tax and amortisation.
EBITDA Earnings before net financial expenses, profit
tax, depreciation and amortisation.
Fix it / exit strategy Making non-core parts of the company
healthy or profitable with a view to sale. The
proceeds are used for new acquisitions.
FM Global Highly
Protected Risk Award
Certificate issued by FM Global to companies
which fulfil all of this insurer’s guidelines for
loss prevention.
Geosynthetics Woven geotextile materials, non-wovens and
grids based on polypropylene and polyeth-
ylene.
Global Reporting
Initiative
The Global Reporting Initiative (GRI) is an
international organisation which draws up
guidelines and definitions for sustainability
reporting.
Joint venture Form of co-operation in which TenCate forms
a new company with one or more organisa-
tions and develops new or existing joint
activities from that company.
Market group Clustering of subsidiaries (operating compa-
nies) which co-operate in research and
development, production, end-user
marketing and sales.
Market window The ideal time to launch a product on the
market. Also: possible market application.
Net debt position Long-term and short-term interest-bearing
loans and other financial liabilities, less cash
and cash equivalents.
Net invested capital The capital made available to the company,
comprising total equity plus loans and provi-
sions made available, less the balance of
cash and cash equivalents.
Glossary
157TenCate annual report 2013 | FINANCIAL STATEMENTS |
Net result Result after deduction of non-controlling
interests (result attributable to shareholders
of the company).
Patent (pending and
issued)
Exclusive right to the invention in respect of
a product or process.
Prepreg Thin film 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 specific parameters to determine the
CO2 footprint of TenCate products (‘outside
the gate’).
Return on net
invested capital
Percentage of profit (before appropriation),
including non-controlling interests and
interest expenses relative to average net
invested capital.
Sector Technology cluster of market groups and
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, public authorities
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 co-ordi-
nated components (e.g. fabrics) as part of a
system.
TenCate base
technologies
Fibre, weaving and finishing technology;
market windows are protective fabrics,
outdoor fabrics and composites for aero-
space, automotive and armour. Non-woven,
grid and extrusion technology; market
windows are geotextiles, industrial fabrics
and synthetic turf.
Texturing Treatment of filament yarns giving them a
permanent crimp and greater stretch and
elasticity.
Thermoplastic
composite
Composite which becomes soft when heated
under pressure for a certain time 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 disinte-
grates 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 profit tax liabilities.
Working capital in days Working capital expressed in days of
revenues over the last quarter (calculated on
an annual basis).
158 | TenCate annual report 2013 | FINANCIAL STATEMENTS
This Annual Report concerns the 2013 calendar year.
It was published on the TenCate website in PDF format on Wednesday
5 March 2014 and will also be available in limited quantities in printed
form from Tuesday 25 March. The 2013 Annual Review, a summary
version of the Annual Report, is available from Friday 28 March.
From 2014, the Royal TenCate Annual Review will be sent by post
automatically to stakeholders who had previously registered to
receive what until recently was the printed Annual Report. New
orders for the Annual Review can be sent to: [email protected].
Means of communication
Printed Annual Review 2013Summary of 2013 Annual ReportIncluding summary of 2013 financial statements Concerns 2013 calendar yearPrinted in Dutch and EnglishNumber of pages 56To order: [email protected] of reporting: inclusive (financial and non-financial)TenCate has opted not to publish a separate annual CSR reviewPublication date: 28 March 2014
Dynamic Annual Report 2013Full 2013 Annual ReportExcluding full 2013 financial statements Including CSR activities in 2013Including GRI table 2013Including glossaryConcerns 2013 calendar yearArchive of dynamic TenCate annual reports since 2010Archive of TenCate annual reports in PDF since 1994Dynamic version in Dutch and EnglishSee: www.tencateannualreports.comType of reporting: inclusive (financial and non-financial)Publication date: 1 April 2014
Digital annual report 2013Full 2013 Annual ReportIncluding full 2013 financial statementsIncluding glossaryConcerns 2013 calendar yearPDF version in Dutch and EnglishNumber of pages 160See: www.tencate.com/jaarverslag2013Type of reporting: inclusive (financial and non-financial)TenCate has opted not to publish a separate annual CSR reportPublication date: 5 March 2014
Investor Relations app (IR app)Application for investor relationsFinancial background information Dynamic version in Dutch and EnglishCurrent TenCate share price on NYSE EuronextFinancial calendarInformation on TenCate AGMRelevant IR presentationsRelevant TenCate webcastsArchive of TenCate annual reports in PDF since 1994See: irapp.tencate.com
Press releasesFinancial press releases concerning quarterly and annual figures, acquisitions and major ordersNon-financial press releases concerning news, current events and corporate social responsibilitySee: www.tencate.com/nieuws Subscribe: www.tencate.com/persberichten
txtures stakeholder magazinePrinted publication appearing four times a yearAlso application with additional information and picturesIncluding column by chairman of Executive Board concerning annual and quar-terly figuresNumber of pages: approximately 48Publication dates 13 March, 22 May, 7 August and 6 November 2014See: txturesapp.tencate.comTo order printed version: [email protected]
TENCATE COMMUNICATION CHANNELS FOR REPORTING AND INVESTOR REL ATIONS
159TenCate annual report 2013 | FINANCIAL STATEMENTS |
160 | TenCate annual report 2013 | FINANCIAL STATEMENTS
Text
Royal Ten Cate
Translation
VVH business translations, Utrecht
Design
Frontwise, Utrecht
Realisation
Domani B.V., Weesp
Printing
Lulof Druktechniek B.V., Almelo
Illustrations
Joost van Baars
Marjo Baas
Doug Bergen
Dennis de Beurs
Sean Clee
Frans Dekker
Mark Evans
Hervé Gousse
Paul Haverkort
Norbert Hekkink
Werner Helmich
Truls Lötvedt
Shaun Lowe
Henrik Morlock
Franz Pfluegl
Roelof Pot
Frank Uijlenbroek
Adrian Waine
Courtesy © Aérospatiale Westland
Courtesy © Airbus
Courtesy © AgustaWestland
Courtesy © Boeing
Courtesy © Cirrus
Courtesy © Gulfstream Aerospace Corporation
Courtesy © Fokker Aerostructures
Courtesy © Mercedes-Benz (Daimler AG)
Courtesy © Royal Danish Navy
Courtesy © SpaceX
Courtesy © Schiebel
Colophon
Royal Ten Cate
PROTECTING PEOPLE VISION
TenCate focuses on the growing demand for protection of people and their living and working environments. The worldwide trends towards ‘safety and protection’ and ‘sustainability and the environment’ serve as the focal points of the protective solutions which TenCate provides. The four market themes are In transit, In habitats, At work and During leisure. The end-markets in which TenCate operates are mobility, infrastructure, water management, defence, personal protection, sport and leisure.
TenCate’s vision is based on the development (‘buy & build’) of a broad, advanced technological base. As a company in the technical textile sector, TenCate occupies a broad and innovative technological position worldwide (including patent positions). That enables the company to develop materials which are an optimum match for individual market requirements in the chosen market themes of safety and protection of man and the environment.
MATERIALS ENGINEERING AND INNOVATION MISSION
TenCate is a multinational company which combines textile technology with chemical process technology in the development and production of functional materials, modules and systems which are an optimum match for specifi c market requirements. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system. The technological base determines the high-grade applications (product-market-technology combinations) which TenCate supplies in selected niche markets.
TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of living and working environments. Developing the right product portfolio, 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.
TECHNICAL TEXTILES STRATEGY
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 is able to offer the widest range of functionalities in materials, modules and systems. It does this independently or in co-operation with third parties.TenCate operates principally in six end-markets refl ecting the global trends of safety and sustainability. TenCate’s materials are used in particular for:
■ Personal safety and protection of living and working environments ■ Modernisation of army, fi refi ghting and police equipment ■ Aerospace ■ Water management, infrastructure and environmental solutions ■ Industrial applications
TenCate’s strategy is based on value-chain management. This business model 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. The cornerstones of this policy are end-user marketing, technological innovation, cost leadership and product differentiation. The creation of network structures with partners in the value chain adds a market-focused dimension to this business model. The aim is to improve access to markets and strengthen the competitive position, thereby giving fresh impetus to the growth of the company.
FocusFrom trends to solutions
Profi leMaterial technology group
WORLDWIDE TRENDS
SAFETY SUSTAINABILITY
PROTECTING PEOPLE
IN TRANSIT IN HABITATS AT WORK DURING LEISURE
Mobility continues to grow apace. Increasing prosperity is
making people worldwide more mobile and giving rise to
increased transportation of goods and raw materials
within and between continents, and even to
extraterrestrial destinations. Making those transport movements increasingly
effi cient, safe and sustainable is a challenge in itself.
Urbanisation is increasing steadily across all continents. Urban areas are growing ever
larger and more complex. Societies are changing into compact networks of cities.
That requires a high degree of organisation and logistics with
safe and sustainable infrastructure.
The working environment of personnel in industry and
services may be risky, hazardous or even hostile. Personal protection in the workplace, on the road,
on-site or during the mission is essential in order to work professionally and safely.
Leisure time increases as prosperity grows. In addition
to tourism and recreation, people are enjoying sports as amateurs or top-fl ight
performers. Leisure activities and sports must above all be pursued responsibly.
That requires safe, sustainable facilities.
END-MARKETS
MOBILITY INFRASTRUCTUREWATER
MANAGEMENTDEFENCE
PERSONAL PROTECTION
SPORT AND LEISURE
Composites for vehicles, vessels,
aircraft, helicopters and
mobility concepts
Geotextiles for infrastructure
works; composites
for structures; synthetic turf for
landscaping
Geotextiles and systems for water
management, maritime projects and dewatering
Materials for protection of military personnel;
vehicle, vessel, aircraft and
helicopter armour
Materials for protection of
persons in their working and living
environments
Synthetic turf for sport; outdoor
fabrics; composites for
sport applications
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsActivities 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 aviation industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USAAdvanced composites for aerospace, aviation and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaT3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry, oil & gas extraction and consumer electronics
Ten Cate Advanced Composites ltd Nottingham, UKAdvanced composites for industrial and automotive applications
Ten Cate Advanced Armour UK (AML) Swindon, UKTen 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, IndiaTen Cate Protective India Private ltd Gurgaon, IndiaDesign and production of vehicle armour materials and fabrics for professional wear and safety clothing as well as outdoor applications
GEOSYNTHETICS & GRASS SECTOR
Nicolon Corp. (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 Italy srl Meda, Italy Ten Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics Iberia sl Madrid, SpainTen Cate Geosynthetics Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Poland Sp zoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Romania srl Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsPolyloom Corp. (Ten Cate Thiolon USA) inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1) Dubai, United Arab EmiratesSynthetic 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, NetherlandsBresco AS *) Molde, NorwayGreenFields Swiss AG *) Schaffhausen, SwitzerlandGreenFields Sports Turf Systems (ME) Ltd (80%) *) Nicosia, CyprusGreenFields West Africa SARL (65%) *) Cotonou, BeninGreenFields Sports Surfaces UK Ltd *) Bolton, UKGreenFields India FZC (51%) *) Sharjah, United Arab EmiratesMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd Auckland, New ZealandTigerTurf Australia pty ltd Campbellfi eld, AustraliaTigerTurf (UK) ltd Hartlebury, UKTiger Sports Americas inc Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (90.88%) 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 SingaporeTen 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 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
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.
*) Subsidiary of GreenFields BV.1) Due to legislation in Dubai, 51% is held by a local partner.
Royal Ten Cate has 100% economic ownership.
Subsidiaries, associated companies and other interests as at 31 December 2013
Royal Ten Cate
PROTECTING PEOPLE VISION
TenCate focuses on the growing demand for protection of people and their living and working environments. The worldwide trends towards ‘safety and protection’ and ‘sustainability and the environment’ serve as the focal points of the protective solutions which TenCate provides. The four market themes are In transit, In habitats, At work and During leisure. The end-markets in which TenCate operates are mobility, infrastructure, water management, defence, personal protection, sport and leisure.
TenCate’s vision is based on the development (‘buy & build’) of a broad, advanced technological base. As a company in the technical textile sector, TenCate occupies a broad and innovative technological position worldwide (including patent positions). That enables the company to develop materials which are an optimum match for individual market requirements in the chosen market themes of safety and protection of man and the environment.
MATERIALS ENGINEERING AND INNOVATION MISSION
TenCate is a multinational company which combines textile technology with chemical process technology in the development and production of functional materials, modules and systems which are an optimum match for specifi c market requirements. It is also increasingly important to reduce the ancillary costs of the chosen solution, since materials and modules form part of a total system. The technological base determines the high-grade applications (product-market-technology combinations) which TenCate supplies in selected niche markets.
TenCate aims to maintain a leading position in the provision of sustainable solutions for personal protection and protection of living and working environments. Developing the right product portfolio, 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.
TECHNICAL TEXTILES STRATEGY
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 is able to offer the widest range of functionalities in materials, modules and systems. It does this independently or in co-operation with third parties.TenCate operates principally in six end-markets refl ecting the global trends of safety and sustainability. TenCate’s materials are used in particular for:
■ Personal safety and protection of living and working environments ■ Modernisation of army, fi refi ghting and police equipment ■ Aerospace ■ Water management, infrastructure and environmental solutions ■ Industrial applications
TenCate’s strategy is based on value-chain management. This business model 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. The cornerstones of this policy are end-user marketing, technological innovation, cost leadership and product differentiation. The creation of network structures with partners in the value chain adds a market-focused dimension to this business model. The aim is to improve access to markets and strengthen the competitive position, thereby giving fresh impetus to the growth of the company.
FocusFrom trends to solutions
Profi leMaterial technology group
WORLDWIDE TRENDS
SAFETY SUSTAINABILITY
PROTECTING PEOPLE
IN TRANSIT IN HABITATS AT WORK DURING LEISURE
Mobility continues to grow apace. Increasing prosperity is
making people worldwide more mobile and giving rise to
increased transportation of goods and raw materials
within and between continents, and even to
extraterrestrial destinations. Making those transport movements increasingly
effi cient, safe and sustainable is a challenge in itself.
Urbanisation is increasing steadily across all continents. Urban areas are growing ever
larger and more complex. Societies are changing into compact networks of cities.
That requires a high degree of organisation and logistics with
safe and sustainable infrastructure.
The working environment of personnel in industry and
services may be risky, hazardous or even hostile. Personal protection in the workplace, on the road,
on-site or during the mission is essential in order to work professionally and safely.
Leisure time increases as prosperity grows. In addition
to tourism and recreation, people are enjoying sports as amateurs or top-fl ight
performers. Leisure activities and sports must above all be pursued responsibly.
That requires safe, sustainable facilities.
END-MARKETS
MOBILITY INFRASTRUCTUREWATER
MANAGEMENTDEFENCE
PERSONAL PROTECTION
SPORT AND LEISURE
Composites for vehicles, vessels,
aircraft, helicopters and
mobility concepts
Geotextiles for infrastructure
works; composites
for structures; synthetic turf for
landscaping
Geotextiles and systems for water
management, maritime projects and dewatering
Materials for protection of military personnel;
vehicle, vessel, aircraft and
helicopter armour
Materials for protection of
persons in their working and living
environments
Synthetic turf for sport; outdoor
fabrics; composites for
sport applications
ADVANCED TEXTILES & COMPOSITES SECTOR
Ten Cate Advanced Textiles bv Nijverdal, NetherlandsActivities 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 aviation industry and antiballistic applications
Ten Cate Advanced Composites USA inc Morgan Hill (California), USAPhoenixx TPC inc Taunton (Massachusetts), USAYLA inc Benicia (California), USAAdvanced composites for aerospace, aviation and industrial applications
Performance Materials Corporation Camarillo (California), USAPMC Holding Corporation Camarillo (California), USABaycomp Company Burlington (Ontario), CanadaPMC Guangzhou Guangzhou, ChinaT3 (51%) Taichung, TaiwanThermoplastic composites and components for the automotive industry, oil & gas extraction and consumer electronics
Ten Cate Advanced Composites ltd Nottingham, UKAdvanced composites for industrial and automotive applications
Ten Cate Advanced Armour UK (AML) Swindon, UKTen 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, IndiaTen Cate Protective India Private ltd Gurgaon, IndiaDesign and production of vehicle armour materials and fabrics for professional wear and safety clothing as well as outdoor applications
GEOSYNTHETICS & GRASS SECTOR
Nicolon Corp. (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 Italy srl Meda, Italy Ten Cate Geosynthetics (UK) ltd Telford, UKTen Cate Geosynthetics Iberia sl Madrid, SpainTen Cate Geosynthetics Deutschland GmbH Dietzenbach, GermanyTen Cate Geosynthetics Poland Sp zoo Kraków, PolandTen Cate Geosynthetics CZ sro Prague, Czech RepublicTen Cate Geosynthetics Romania srl Bucharest, RomaniaSales offi ces
Ten Cate Thiolon bv Nijverdal, NetherlandsPolyloom Corp. (Ten Cate Thiolon USA) inc Dayton (Tennessee), USATen Cate Thiolon Middle East (49%) 1) Dubai, United Arab EmiratesSynthetic 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, NetherlandsBresco AS *) Molde, NorwayGreenFields Swiss AG *) Schaffhausen, SwitzerlandGreenFields Sports Turf Systems (ME) Ltd (80%) *) Nicosia, CyprusGreenFields West Africa SARL (65%) *) Cotonou, BeninGreenFields Sports Surfaces UK Ltd *) Bolton, UKGreenFields India FZC (51%) *) Sharjah, United Arab EmiratesMarketing and installation of synthetic turf systems
TigerTurf NZ, ltd Auckland, New ZealandTigerTurf Australia pty ltd Campbellfi eld, AustraliaTigerTurf (UK) ltd Hartlebury, UKTiger Sports Americas inc Austin (Texas), USA Marketing and production organisations for synthetic turf systems
Edel Grass bv (50%) Genemuiden, NetherlandsMarketing and installation of synthetic turf systems
OTHER ACTIVITIES SECTOR
Xennia Technology ltd (90.88%) 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 SingaporeTen 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 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
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.
*) Subsidiary of GreenFields BV.1) Due to legislation in Dubai, 51% is held by a local partner.
Royal Ten Cate has 100% economic ownership.
Subsidiaries, associated companies and other interests as at 31 December 2013
Protecting peopleIn transit
Royal Ten Cate
Annual report 2013 OrganisationSectors and market groups
PROTECTING PEOPLEPROTECTING PEOPLE
IN TRANSITIN HABITATS
AT WORKDURING LEISURE
Royal Ten Cate
Annual report 2013
TenCate would like to hear from you. Please let us know your views
by e-mailing [email protected], stating the market group or offi cer
you wish to contact. You can also contact us using the details
shown below.
Drs Pieter Zwinkels, investor relations manager
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
This annual report relates to the 2013 calendar year.
The annual report was published on the TenCate website
on Wednesday 17 March 2014 and is also available in printed form
from Tuesday 31 March.
Contact
Royal Ten Cate
ADVANCED TEXTILES & COMPOSITES SECTOR
GEOSYNTHETICS & GRASS SECTOR
OTHER ACTIVITIES SECTOR
PROTECTIVE FABRICS GEOSYNTHETICS INKJET TECHNOLOGY
Protective and safety fabrics and multi-risk solutions for fi refi ghting and defence, industry and services.
Synthetic fabrics, non-wovens, grids and systems for use in infrastructure, civil engineering, water management, the environmental sector, agriculture and horticulture.
Digital inkjet technologies for industrial production processes.
OUTDOOR FABRICS GRASS TECHNICAL COMPONENTS
Protective fabrics for outdoor applications, such as the camping and awning market.
Synthetic turf components and integrated synthetic turf systems for top-fl ight sports, recreation and landscaping.
Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs.
ADVANCED COMPOSITES HOLDING & SERVICES
Advanced composites, compounds and systems for the space and aerospace industry and industrial applications, including automotive, industrial components and energy generation.
Holding company activities, including fi nance, accounting, patent development and management, investor relations, business development, information technology, human resources management and insurance.
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.
. A legal overview of operating companies, associated companies and other interests can be found on the inside of the back fl ap.
Protecting peopleIn transit
Royal Ten Cate
Annual report 2013 OrganisationSectors and market groups
PROTECTING PEOPLEPROTECTING PEOPLE
IN TRANSITIN HABITATS
AT WORKDURING LEISURE
Royal Ten Cate
Annual report 2013
TenCate would like to hear from you. Please let us know your views
by e-mailing [email protected], stating the market group or offi cer
you wish to contact. You can also contact us using the details
shown below.
Drs Pieter Zwinkels, investor relations manager
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
This annual report relates to the 2013 calendar year.
The annual report was published on the TenCate website
on Wednesday 17 March 2014 and is also available in printed form
from Tuesday 31 March.
Contact
Royal Ten Cate
ADVANCED TEXTILES & COMPOSITES SECTOR
GEOSYNTHETICS & GRASS SECTOR
OTHER ACTIVITIES SECTOR
PROTECTIVE FABRICS GEOSYNTHETICS INKJET TECHNOLOGY
Protective and safety fabrics and multi-risk solutions for fi refi ghting and defence, industry and services.
Synthetic fabrics, non-wovens, grids and systems for use in infrastructure, civil engineering, water management, the environmental sector, agriculture and horticulture.
Digital inkjet technologies for industrial production processes.
OUTDOOR FABRICS GRASS TECHNICAL COMPONENTS
Protective fabrics for outdoor applications, such as the camping and awning market.
Synthetic turf components and integrated synthetic turf systems for top-fl ight sports, recreation and landscaping.
Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs.
ADVANCED COMPOSITES HOLDING & SERVICES
Advanced composites, compounds and systems for the space and aerospace industry and industrial applications, including automotive, industrial components and energy generation.
Holding company activities, including fi nance, accounting, patent development and management, investor relations, business development, information technology, human resources management and insurance.
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.
. A legal overview of operating companies, associated companies and other interests can be found on the inside of the back fl ap.