Sales at Royal Tencate up 22% in Q3

08 Nov '10

4 min read

TenCate trading update for third quarter of 2010.

Highlights of third quarter of 2010-
•Sales € 273 million (+22% compared to 3rd quarter of 2009)
•Increase in EBITA of 40% compared to 3rd quarter of 2009
•Net profit up 47% compared to 3rd quarter of 2009
•Substantial recovery in the result by European activities in protective fabrics
•The TenCate Geosynthetics & Grass sector exhibits an outperformance
•Profit growth hampered by tight conditions in a number of raw materials markets and costs related to the coordination of downstream activities in the synthetic turf market
•Turnaround at TenCate Enbi proves successful
•Debt ratio 2.5 (3rd quarter of 2009: 2.5)

Loek de Vries, President and CEO of TenCate: 'Sales in the third quarter are at approximately the same level as recorded in the top year 2008. A significant rise in sales is also expected in the fourth quarter, in view of the strong growth in industrial protective fabrics (TenCate Tecasafe(TM) Plus), the increasing demand for TenCate Defender(TM) M products and an improved outlook for aerospace composites.

Despite shortages and price rises in raw materials (fibres) as well as pressure on margins and integration costs at synthetic turf companies related to TenCate (downstream activities), profit growth amounted to 47%.

The close relationship with strategic market participants has led to an increased market share in synthetic turf fibres. These parties are enabling TenCate to strengthen its position in end markets and to make a positive contribution to quality improvements at system level.'

Key developments in each sector -
Advanced Textiles & Composites -
•Profit recovery in this sector for the first nine months is primarily due to a recovery in the result in Europe in the field of safety fabrics.
•Sales of TenCate Defender(TM) M increased during the third quarter following the temporary decrease in demand (new camouflage print). Sales up to and including the third quarter still remain below the level recorded in 2009. On an annual basis, however, sales will recover as a result of strong growth in the fourth quarter.
•New products, such as TenCate Tecasafe(TM) Plus, have led to a very significant rise in sales in the industrial market.
•The demand for aerospace composites (Airbus, Boeing) developed favourably.
•The armour composites market particularly in Europe is characterized by tight budgetary conditions prevailing among national government agencies, which has resulted in delays to projects.
•The general demand for products such as aramids and para-aramids (synthetic fibres) and carbon fibres is growing faster than the supply, which is inhibiting profit growth.

Geosynthetics & Grass -
•Sales and result in the US market for geosynthetics have picked up, partly due to government stimulus measures.
•TenCate Geosynthetics is taking advantage of the opportunities for growth arising in South America and Asia.

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