American market shows substantial recovery - TenCate

04 May '10

4 min read

Positive results for first quarter of 2010.

Key developments by market group
Protective Fabrics
- Temporarily lower sales of fire-resistant fabrics for US Army, in part due to innovation in camouflage print; higher revenues planned for second half of the year.
- First commercial order in European market (Norway) for TenCate Defender M.
- Strong order position in emergency response (firefighting market) and industrial markets in the US, in part as a result of the market launch of the TenCate Tecasafe Plus product.
- Order positions in Europe (mainly industrial markets) are at considerably higher levels than in the past year.
- Provision of more than € 2 million for reorganization relating to the concentration of Dutch production at a single location that is to be implemented.

Space & Aerospace Composites and Armour Composites
- Positive effects on the result from the reorganization implemented in 2009 (Dutch production).
- Strong and diversified order position for armour composites in Europe and the US, with deliveries planned for the second half of the year.
- Strengthening of position in the British armour market through the acquisition of AML UK.
- Sales of aerospace composites (mainly related to Airbus) remain unchanged at a low level, although the outlook will improve over time; there is a slight recovery in the market for aircraft interiors.

Geosynthetics
- American market shows substantial recovery; upturn in infrastructure market and strong developments in TenCate Geotube applications (water management, environmental solutions).
- Sluggish start by European geosynthetics market due to longer winter period.
- First commercial project outside Europe for TenCate GeoDetect (sensoring); collaboration agreement entered into with Roctest.

Grass
- Approximately 10% rise in sales, partly as a result of the positive price effect.
- American market shows structurally strong demand.
- Considerably higher results through reallocation of production and the cost measures taken earlier.

Other activities
- TenCate Enbi shows clear recovery in results with increasing sales.
- Xennia Technology records good progress in the strategic objectives that were communicated to stakeholders in February.

Mr L. de Vries, President and CEO of TenCate: 'The operating result before amortization for the first quarter of 2010 showed an autonomous increase of 43%, excluding the provision for reorganization costs (approximately € 2 million). The effect of the American dollar in particular on the operating result was approximately -6%.

Net profit does not show a representative picture for the first quarter, due to a number of fiscal items. On an annual basis, however, no significant change in the tax rate is expected.

The decline in the group's sales is mainly attributable to timing issues relating to the purchase of army uniforms by the US Army. The market share of TenCate Defender M is growing, partly due to the number of new applications in a number of army units. The first major order has also been secured outside the US, which is a pleasing development in the context of a larger geographical spread of sales.

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