TenCate records 11% growth in sales in Q4 2008
General performance in the fourth quarter of 2008: TenCate operates in sustainable growth markets and recorded an 11% growth in sales in the fourth quarter. Autonomous growth in sales stagnated, however, due to the effects of the global tightness on the financial markets. There was evidence of a reduction in inventories among our customers, which had a delaying effect. Although there was still little indication of a structurally lower demand in end markets, some delay in projects did occur.
There was a peak in the sales in the fourth quarter of 2007, principally as a result of the delivery of military orders (armour). This effect did not occur to the same extent in the fourth quarter of 2008, which put pressure on the autonomous growth rate in the quarterly comparison.
EBITA rose by 9% to €24.3 million. It should be noted here that exceptional items of €4.1 million were included in the EBITA for the fourth quarter of 2007. After correction to take account of these items, EBITA increased by 34%. The currency effect was +6%.
The net result for the fourth quarter amounted to €13.8 million (-13%). When corrected to take account of the exceptional items of €3.4 million net in 2007, there was an increase of approximately 11%.
Annual figures for 2008:
TenCate broke through the sales barrier of €1 billion with sales of €1,033 million (2007: €886 million). Sales increased on an annual basis by 17%, which can be attributed mainly to acquisitions. On an autonomous basis the increase amounted to 5%.
The buy & build strategy is directed at bringing about or accelerating growth in acquired companies. The pro forma autonomous growth in sales for 2008 (including the autonomous sales growth of acquired companies) amounted to 8%.
The autonomous growth was restrained in particular by TenCate Enbi and by the cautious trend in the European professional wear market.
The strongest autonomous growth was recorded in the American market for protective fabrics, primarily as a result of positive developments in the field of fire-resistant military applications (TenCate DefenderM and TenCate Gen2). The sales of armour composites developed favourably, especially following the acquisition of Composix.
The growth in revenues of the Geosynthetics & Grass sector was due mainly to synthetic turf activities. This growth is in part the result of the price increases that were implemented.
Operating result before amortization
The operating result before amortization (EBITA) rose by 31% to €95.4 million. This increase can be attributed mainly to acquisitions.
The EBITA margin rose to 9.2% (2007: 8.2%), thus approaching the financial objective of 10%.
Excluding the exceptional items in 2007 referred to above, the autonomous growth in EBITA amounted to 38%. On an annual basis the currency effect on EBITA is -5%.
The net profit before amortization and the result from divested activities and excluding exceptional items (cash earnings) is indicated as the basis for profit growth in 2008 (2007: €46.6 million).