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PROTECTING PEOPLE
Koninklijke Ten Cate bv
Stationsstraat 11
P.O. Box 58
7600 GD Almelo
Netherlands
Telephone +31 (0)546 544 911
E-mail royal@tencate.com
Web www.tencate.com
Koninklijke Ten Cate bv
Annual review 2016
IN TRANSITAT WORK
IN HABITATSDURING LEISURE
PROTECTING PEOPLE
KTC JV2016 ENG-Omslag plano.indd 1 02-05-17 10:55
3TenCate annual review 2016 | AnnuAl review 2016 |
Key figures 2016 4
Report of the Executive Board 5Protective Fabrics 10
Advanced Composites 12
Advanced Armor 16
Geosynthetics 18
Grass 20
Executive Board and senior management 23
Supervisory Board 23
Annual review 2016Royal Ten Cate
4 | TenCate annual review 2016 | Key FiGures 2016
Key figures 2016In millions of euros unless stated otherwise
2015 2016
revenues 1,158.9 1,178.3
eBiTDA* 97.7 126.7
eBiTDA margin* 8.4% 10.8%
net interest-bearing debt (year-end) 192.8 113.9
Cash flow from operating activities 55.8 106.4
Cash flow from investing activities -7.0 -21.3
Cash flow from operating and investing activities 48.8 85.1
FTe excluding temporary staff at year-end 3,652 3,550
Of which in the netherlands 769 779
REVENUES BY GROUP
Protective Fabrics 308.2 326.8
Composites 166.0 178.9
Armour 57.0 68.4
Geosynthetics 318.8 313.1
Grass 292.9 289.4
* eBiTDA before exceptional items, 2016 in accordance with new bank covenants.
5TenCate annual review 2016 | rePOrT OF The exeCuTive BOArD |
revenues
Advanced Composites
Advanced Armor
Protective Fabrics
Geosynthetics
Grass
28%
15%
6%26%
25%
2016
Report of the Executive Board
CONSOLIDATED RESULTSin 2016, revenues increased by 4% organically and reached € 1,178
million (2015: € 1,159 million).
eBiTDA amounted to € 126.7 million (2015: € 97.7 million). The strong
increase of the consolidated results was mainly due to the initial
recovery of the TenCate Advanced Armour group. A strong performance
was also noted in the TenCate Advanced Composites group due to the
further growth of its aerospace composites activities, in the Protective
Fabrics group due to increased defense related sales and in the Geosyn-
thetics group due to increased sales volumes. The Grass group did not
contribute to the improvement of the consolidated eBiTDA. revenues of
TenCate Grass remained stable, reflecting a hesitant market environ-
ment in the sport segment of the synthetic turf market.
CASH FLOWThe strong eBiTDA performance was the basis of the increase in net
cash flow from operating and investing activities to a level of € 85.1
million (2015: € 48.8 million). Capital expenditures of € 29.8 million,
aimed at business expansion, maintenance and environmental invest-
ments, were in line with last year.
FINANCEThe strong cash flow resulted in a € 78.9 million decrease of the year-
end net debt to € 113.9 million.
OUTLOOKFor the outlook regarding the markets of the individual TenCate divi-
sions, we refer to the sections of the different divisions on page 10 to
22 of this report. For TenCate as a whole, no major developments are
anticipated with regard to personnel numbers. Based on envisaged
projects, total capital expenditures for the year 2017 are expected to
increase. in January 2017, Tennessee Acquisition B.v. (holding company
of Koninklijke Ten Cate B.v.) reached an agreement on the refinancing
of its debt, which will result in a decrease of interest costs.
CORPORATE STRUCTUREFollowing an interim judgement rendered on August 2, 2016, the enter-
prise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeal
rendered its final judgement in the squeeze-out Proceedings
initiated by Tennessee Acquisition B.v. (“Tennessee Acquisition”) on
October 11, 2016. in its final judgment, the enterprise Chamber ordered
TenCate’s minority shareholders to transfer their shares in TenCate to
Tennessee Acquisition at the price of € 26, to be increased with
interest as of February 12, 2016. Tennessee Acquisition paid the
purchase price for the shares, inclusive of interest, on October 25,
2016. Following the cancellation (intrekking) of the remaining 475,687
shares held by TenCate in its own capital, which was effected on
January 3, 2017, Tennessee Acquisition now owns the whole of the
share capital and voting rights of TenCate.
in an extraordinary General Meeting held on August 25, 2016, share-
holder approval was given for the conversion of TenCate into a private
limited liability company (besloten vennootschap met beperkte
aansprakelijkheid), in conjunction with a number of other changes in
TenCate’s articles of association. The notarial deed to effect the conver-
sion and the other changes was executed on september 15, 2016.
On December 21, 2016, the 50% share in edel Grass b.v. was sold.
On February 13, 2017, TenCate acquired Ceelen sport Constructies, the
market leader for the design and installation of synthetic turf sports
fields in the netherlands.
ORGANIZATIONThe two business sectors as previously presented in TenCate’s annual
reports, Advanced Textiles & Composites and Geosynthetics & Grass,
have been split into five TenCate divisions:■ TenCate Protective Fabrics■ TenCate Advanced Composites■ TenCate Advanced Armor■ TenCate Geosynthetics■ TenCate Grass.
6 | TenCate annual review 2016 | rePOrT OF The exeCuTive BOArD
PersOnnel
Advanced Composites
Advanced Armor
Protective Fabrics
Geosynthetics
Grass
19%
16%
7%32%
26%
2016
PersOnnel
Male
Female
80%
20%
2016
. Report of the Executive Board
maintain its leading market position, but it also enhances the func-
tional benefits for the end user. innovation reduces costs not only for
TenCate, but also for end users during the economic life of the product.
Total research and development expenses including capitalized devel-
opment costs were € 24.6 million in 2016 (2015: € 25.7 million). These
costs are largely related to qualifying expenses for the development of
composite materials for next-generation aircraft, the development of
materials with improved functional properties and the improvement
and development of production processes. The r&D policy also
focuses on improvements with a positive effect on the environmental
impact during the product’s lifetime.
in 2016 TenCate received € 0.7 million (2015: € 1.2 million) in develop-
ment grants. These relate mainly to european, national and regional
development grants.
ISO certification
A large number of TenCate businesses are isO 14001 certified. This
also provides an accepted standard for environmental and safety
control of key processes. Processes are monitored constantly as part of
operational risk management within all TenCate market groups.
in its day-to-day operations, TenCate is guided by the Protect, respect
and remedy framework and guidelines, drawn up by the united
nations (un) in 2008 on the basis of the ruggie Framework and
updated in 2011 with the OeCD Guidelines for Multinational enter-
prises.
Personnel
At the year-end 2016, TenCate employed 3,550 people (FTe excluding
temporary staff, 2015: 3,652). Of the total number of employees in
2016, 80% were male and 20% female.
As of 2016, after the delisting, the five TenCate divisions have been
empowered to autonomously determine their corporate strategy.
During the year 2016, all five divisions were orga nized on a global
scale, with a higher degree of geographical interaction. This structure
will bring more focus to key markets and internationally operating
customers. Management has been strengthened in order to enable
each TenCate division to accelerate its growth through operational
excellence, higher service levels and products which exceed customer
expectations. The current legal and management structures are
aligned with the global organizational structure of TenCate. Koninklijke
Ten Cate B.v. will take care of all overarching activities including
finance, treasury, tax and legal support.
CORPORATE SOCIAL RESPONSIBILITYsustainability is part of the TenCate value proposition. All TenCate
products and systems contribute specifically to sustainability and have
intrinsic advantages over traditional products due to weight savings,
CO2 footprint reduction, fuel savings and increased safety and protec-
tion.
sustainability is also a key element in the production processes of
TenCate materials. A growing part of TenCate’s offering includes
aspects of a circular economy. As an example, TenCate Grass was the
first company in the industry to introduce fully recyclable synthetic turf
sports fields and biodegradable products. reducing energy use and
water consumption is a key element of saving costs, as well as
reducing the environmental footprint.
Innovation and R&D
innovation is a further aspect of the corporate social responsibility
approach. For TenCate as an advanced materials producer, the
constant search for products and systems that positively contribute to
the environment and to the safety of people is not only important to
7TenCate annual review 2016 | rePOrT OF The exeCuTive BOArD |
Waste
Over 13 kilotonnes of waste were released in the production processes
of TenCate in 2016 (2015: 17 kilotonnes). Almost 4.5 kilotonnes were
recycled internally during the reporting year (2015: 5 kilotonnes) and
almost 7.2 kilotonnes were processed externally, with an additional
0.9 kilotonnes of waste being incinerated by the waste processor and
the remainder being sent to a landfill.
RISK MANAGEMENTrisks are an inherent part of entrepreneurship. TenCate aims to iden-
tify and control these risks at the earliest stage possible. risk control
models have been developed for that purpose, which are regularly
updated by and discussed with the Group management. The risk appe-
tite of TenCate, the main risks and the applicable risk control models
for each category are briefly described below.
insights into the risk appetite of TenCate and the associated limits are
discussed with the management. limits are determined by the
strategy, code of conduct, business values, authorization schedules,
procedures and management regulations. The risk appetite differs in
each risk category. risk management is covered in the consultations
with the supervisory Board.
Strategic and market risks
TenCate is prepared to incur substantial but carefully considered risks
in order to achieve the qualitative strategy objectives it has set. iden-
tified strategic risks relate to:■■ limits on government expenditure■■ Deteriorating economic and political conditions■■ Technological developments ■■ Availability and price fluctuations of raw materials.
The major risk factor in demand for TenCate products is the level of
government expenditure. The number of customers may be limited,
even in the industrial market. in some market groups, products are
developed for adjacent markets, reducing the dependence on govern-
ment budgets and dominant customers. By building flexibility into cost
structures, it is possible to offset the consequences of a drop in
demand to a certain extent.
A limited number of raw materials account for a large proportion of the
materials consumed by the market groups within TenCate. Prices in
commodity markets are liable to fluctuate widely. Price rises cannot
always be passed on, or can only be passed on after a time lag. in the
Energy
Total energy consumption amounted to approximately 1,697 terajoules
(2015: 1,813). Among TenCate’s production processes, fabric produc-
tion and synthetic fiber extrusion are the most energy-intensive.
Biogas is produced in the company’s own wastewater treatment plant
and is used to produce steam for processes. The table below shows
the percentage breakdown of energy consumption based on the main
energy sources for 2014, 2015 and 2016.
ENERGY CONSUMPTION BY ENERGY SOURCE
2014 2015 2016
renewable electricity 14.8% 15.5% 15.9%
non-renewable electricity 47.6% 47.6% 48.3%
Biogas 0.1% 0.1% 0.1%
natural gas 24.3% 23.4% 22.4%
steam 12.5% 12.7% 12.7%
Other sources 0.7% 0.7% 0.6%
Total 100.0% 100.0% 100.0%
The TenCate production sites have set a target of improving energy
efficiency by 1% per year through energy-saving measures. The Dutch
production sites of TenCate even have an energy efficiency improve-
ment 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 organization in the netherlands.
in 2016 TenCate’s global CO2 emissions were 149 kilotonnes (2015: 163
kilotonnes). The data show that over 77% of the CO2 footprint of
TenCate is due to electricity consumption. Of the electricity consumed,
25% is sourced sustainably, such as from wind power, hydroelectricity
or solar energy, and is therefore CO2-neutral. The CO2 emissions are
mainly attributable to the energy-intensive divisions TenCate Geosyn-
thetics and TenCate Grass.
Water
Total water consumption in 2016 was approximately 3.3 million cubic
meters (2015: 2.9 million cubic meters). The dominant consumers of
water are TenCate Geosynthetics, TenCate Grass and TenCate Protec-
tive Fabrics. The total volume of wastewater was 3.1 million cubic
meters in 2016 (2015: 2.8 million cubic meters).
8 | TenCate annual review 2016 | rePOrT OF The exeCuTive BOArD
The TenCate businesses’ license to operate depends on close adher-
ence to local regulations and operation within locally specified stan-
dards of good entrepreneurship.
Any disruptions to iT systems can impede the operating processes.
The risks are limited as much as possible by means of information
security and fallback procedures. The operation of these facilities is
regularly tested, both internally and externally.
Compliance risks
TenCate has a zero-tolerance policy with regard to compliance risks.
identified compliance risks relate to:■■ Business ethics ■■ laws and regulations■■ intellectual property■■ export controls.
The standards and values of TenCate are set out in the code of
conduct. A whistle-blower scheme enables employees to inform the
company management of any undesirable situations. A central
compliance officer has been appointed.
All managers and controllers sign an annual letter of representation
declaring their compliance with financial reporting and internal control
requirements.
TenCate is involved in a number of legal proceedings resulting from
normal business operations. The results of these proceedings are by
their nature uncertain. The progress of these proceedings is monitored
continuously. A summary is discussed twice a year within the super-
visory Board.
Development of new products entails a risk of iP rights violations.
important patents and innovations are recorded as much as possible
in order to mitigate risks of violations. Possible violations are investi-
gated.
Financial risks
with regard to financial risks, TenCate has a low risk appetite. identi-
fied financial risks relate to:■■ Availability of finances■■ interest and exchange rate fluctuations■■ Tax■■ impairment■■ Counterparty credit risk, including customers.
case of some materials, shortages may occur or a dependence on a
single supplier may develop. such cases give rise to availability risks or
disproportionate price rises. TenCate endeavors to reduce this depend-
ence by using alternatives.
Operational risks
with respect to operational risks, TenCate has a very low risk appe-
tite. The objective of TenCate is to minimize the impact of unexpected
operational problems. identified operational risks relate to:■■ Continuity of production■■ Product liability■■ retention of knowledge and skills■■ license to operate■■ iT reliability and continuity.
it is vital that TenCate has safe production sites. This guarantees busi-
ness continuity and can prevent any loss of production capacity. At the
same time, TenCate can safeguard its position as a dependable
supplier and customer.
safety aspects particularly concern the risk of fire, explosion and
natural disasters, such as floods, earthquakes or storms. in coopera-
tion with the insurer FM Global, corporate risk management conducts
regular annual inspections of production sites of all market groups
worldwide.
Corporate risk management also deals with numerous matters relating
to the company’s liabilities, including product liabilities and insurance
cover.
TenCate has various small- to medium-scale production processes.
incidents in production can never be ruled out. These may lead to a
loss of quality in the end-products, claims from customers or even a
temporary halt in the production process. TenCate carries out preven-
tive inspections of its products and almost all plants are isO-certified.
Control of production processes and quality management are impor-
tant priorities in order to prevent product claims.
The development of technical and management competences plays an
important role in the personnel policy of TenCate. This enables the
company to monitor the quality of products and the continuity of the
production processes.
9TenCate annual review 2016 | rePOrT OF The exeCuTive BOArD |
The financing of the company is centralized through the corporate
treasury department. The corporate treasury department is also
responsible for the monitoring and hedging of interest rate and
currency risks. A treasury policy is in place regarding the instruments
to be used and the applicable limits for identified risk areas.
The treasury committee monitors the treasury activities.
As a result of the offer for the outstanding TenCate shares by
Tennessee Acquisition B.v., the existing credit facility was repaid on
January 29, 2016 and replaced by a credit facility granted by
Tennessee Acquisition B.v. since March 24, 2016, TenCate has had
direct access to the unused part of the external credit facility of
Tennessee Acquisition B.v.
Although external financing of TenCate is arranged at the level of
Tennessee Acquisition B.v., the main financial risk still relates to the
availability of finances, which is partly dependent on the performance
of the divisions of TenCate. The conditions of the external financing
are in line with market practice for companies of a similar size and
credit rating.
TenCate has a central tax management department. Tax risks can
result in a substantial financial and operational risk. The trend of
growing awareness among national governments and tax authorities
regarding international flows of goods and services and rights, within
and outside groups, leads to an increased risk profile with respect to
local taxes, possible import duties, value added tax, withholding tax
and other taxes. For this reason, substantial time and resources are
continuously spent on tax compliancy. During 2016, the role of TenCate
Finance AG in switzerland as well as the role of local financial holding
companies was either terminated or reduced substantially, following
the legal and operational disentanglement related to the formation of
separate TenCate divisions.
An impairment test is carried out at least once a year. This test is
discussed with the supervisory Board and the external auditor.
The credit risk relating to individual customers is monitored and partly
insured.
10 | TenCate annual review 2016 | Key FiGures 2016
TENCATE PROTECTIVE FABRICS
PROFILE AND STRATEGYTenCate Protective Fabrics is a leading technical fabrics producer for
protective clothing applications. it has a solid reputation and is
renowned for its innovative blends. TenCate Protective Fabrics
designs, develops, manufactures, sources and sells fabrics used for
protective clothing. The product range is aimed at protecting people in
working and hazardous environments. The protection of fabrics is
achieved through application of strong know-how in blending fibers
and in using finishing technologies to optimize value and performance
characteristics of the material for end users. TenCate Protective
Fabrics focuses on four market segments of the personal safety
market: industrial safety, emergency response, military & police and
workwear.
Direct customers are predominantly professional garment and uniform
manufacturers, laundry companies and other service providers.
TenCate Protective Fabrics has a strong position in defense markets,
with its TenCate Defender™ M product portfolio. This unique inherently
flame-resistant material, with added specific military characteristics
like infrared reflection, protects us military forces as well as several
other forces in the Middle east, europe and Australia.
Furthermore, the group is active in the niche market of Outdoor Fabrics
(tent fabrics and sun awning fabric). Direct customers include euro-
pean rental companies and suppliers of tents and sun awnings.
with the broadest product portfolio in the marketplace covering the
entire spectrum of the protective fabrics market, TenCate is fully dedi-
cated to offering end users an optimal range of personal protection.
The strategy is built on the combination of treated Fr (flame-retardant)
cotton products and inherent Fr fabrics, all marketed under strongly
positioned TenCate brands. The blending strategy combines different
fibers to offer the specific protection under the most optimal wearing
conditions, enabling TenCate Protective Fabrics to always offer the
best protection and most economical solution for companies facing
multiple risks in their particular working environment.
ORGANIZATIONTenCate Protective Fabrics is a global organization with sales offices
around the world, covering a full scope of safety fabrics, both with
inherent (yarn blends) and finished functionalities. The production sites
of the group are located in the us (Georgia) and europe (the nether-
lands). whereas production in the netherlands is predominantly set up
as a finishing plant for Fr products and workwear, the us operation is
more vertically organized with yarn spinning, weaving, dyeing and
finishing. The us production of high-volume military applications is
outsourced to a large extent in order to achieve the required flexibility.
TenCate Protective Fabrics employs 669 FTe.
. Report of the Executive Board
11TenCate annual review 2016 | Key FiGures 2016 |
revenues By CusTOMer GrOuP (inDiCATive)
56%44% 2016
Government
Non-government
revenues By GeOGrAPhiC reGiOn (inDiCATive)
52%
46%
2%
2016Americas
EMEA
Asia-Pacific
OUTLOOKrevenues in defense markets can vary on an annual basis due to the
volume of large delivery contracts, especially in the us. however, due
to further internationalization of the business, the volatility is
expected to decrease. initiatives are ongoing in order to present
TenCate Protective Fabrics as a global supplier of choice for a full
range of safety fabrics to international garment manufacturers and the
garment service / rental industry. Additionally, as a us- and europe-
based company, a “local-for-local” strategy will enable TenCate
Protective Fabrics to react to specific requirements in local markets.
MAIN PRODUCT / MARKET COMBINATIONS AND VALUE PROPOSITIONThe key market segments are:
■■ industrial safety wear – (multi) risk / safety wear■■ service / industries laundry – workwear segment (non-flame resistant)■■ emergency response ■■ Military & police (law enforcement)■■ Outdoor fabrics – high-end functional fabrics for sun awnings and
tent fabrics.
The fabrics of TenCate provide protection against threats such as
flames, heat, molten metal splashes, electrical arcs and chemicals.
each market segment has its specific requirements. This results in a
dedicated product portfolio with an optimal combination of protection
and wear comfort, aimed at specific end-user requirements and qualifi-
cations. TenCate Protective Fabrics uses a brand portfolio of products
which are well recognized in each of their specific market segments.
For the military and law enforcement market, for instance, the TenCate
Defender™ M portfolio leads the market for Fr (flame-retardant)
fabrics for uniforms.
The value proposition is built around TenCate Protective Fabrics’ broad
technology base and technological expertise as well as its inde-
pendent position towards fiber blends in order to provide end users
with the best possible solution for personal safety. TenCate Protective
Fabrics stands for state of the art quality and protection, and the most
economical solution during the lifetime of the garment.
PERFORMANCE 2016revenues increased to € 327 million in 2016 (2015: € 308 million).
The main growth factor for TenCate Protective Fabrics was the
defense-related business. An increasing number of countries have
adopted TenCate Defender™ M products for their armed forces as
protection against the hazards of fire. Fr uniforms are increasingly
part of a soldier’s outfit during peacekeeping operations and in combat
areas. For other high-risk roles such as police forces, Fr requirements
have also increased internationally. Due to the decline of the oil and
gas industry, worldwide sales in this sector were relatively low.
During 2016, the outdoor fabrics activities were separated from the
protective fabrics activities in order to create more focus on each of
these businesses. investments will be made in order to create a higher
degree of operational efficiency and to increase delivery performance
towards customers.
12 | TenCate annual review 2016 | Key FiGures 2016
. Report of the Executive Board
TENCATE ADVANCED COMPOSITES
PROFILE AND STRATEGYTenCate Advanced Composites is a global leader in the development,
supply and production of a wide range of advanced composite mate-
rials serving the aerospace, satellite/communications, industrial, foot-
wear, consumer electronics and medical markets. TenCate Advanced
Composites’ customers include leading OeMs, such as Airbus
industries and Boeing, in each of its key market sectors.
TenCate Advanced Composites owns a unique material technology
portfolio and is a leading supplier of thermoplastic composite mate-
rials primarily for high-end structural applications in the aircraft
industry. in thermoset composite applications, the group puts its focus
on high-performance materials mainly for space applications, radomes
and high-end industrial applications.
The strategy of TenCate Advanced Composites is aimed at expanding
thermoplastic applications for aviation on the back of continuing
trends of weight reduction, cost savings and simplifying the produc-
tion process. in the thermoset composite markets, TenCate Advanced
Composites is strengthening its european footprint in order to increase
its local customer intimacy. Globally, the Advanced Composites
group’s well-balanced product portfolio, with a unique set of data to
support customers as they design structural components, and the
ability to support these requirements with a high degree of customiza-
tion and customer intimacy, enables the group to grow further in this
market. Finally, the group remains focused on the upside potential of
developing markets looking for the key benefits of using structural
composite materials.
ORGANIZATIONTenCate Advanced Composites operates four major production facili-
ties in the us, two in europe, and one in China, employing approxi-
mately 566 FTe worldwide. The aerospace-focused products are
developed and produced in facilities located in: Morgan hill and Fair-
field (CA), nijverdal (nl) and langley Mill (uK). each of these facilities
offers aerospace-certified production and quality systems. Addition-
ally, TenCate Advanced Composites operates dedicated “carbon-free”
production facilities for high-purity materials for satellite and radome
applications in the aerospace sector. TenCate Advanced Composites
supports the footwear, medical orthotic, sporting goods and consumer
electronics industries out of its facilities located in Camarillo (CA),
Burlington (Ontario, Canada) and Guangzhou (China).
TenCate Advanced Composites is organized specifically to provide
consistent commercial, operational and technical growth strategies
globally, while providing “local-for-local” resources and market exper-
tise. This allows the company to be agile, responsive and supportive of
13TenCate annual review 2016 | Key FiGures 2016 |
revenues By GeOGrAPhiC reGiOn (inDiCATive)
60%
30%
10%
2016Americas
EMEA
Asia-Pacific
revenues By CusTOMer GrOuP (inDiCATive)
23%
77%
2016Government
Non-government
customers to reduce costs, optimize performance and minimize risk.
Partnerships with key customers are crucial for mutual success.
PERFORMANCE 2016Overall revenues increased to € 179 million in 2016 (2015: € 166
million). The performance in key strategic growth markets, including
aerospace and radome markets, remained strong. The group is
engaged in several promising aerospace qualification programs, which
form a large part of the r&D activities. recent aircraft designs such as
the Boeing 787 and Airbus A350 have adopted a composite content
exceeding 50%. By converting from traditional metallic materials, the
aircraft manufacturers are able to deliver aircraft designs that are
significantly lighter weight, allowing long-haul distances to be
increased and opening up new longer routes and faster travel. The use
of thermoplastic composite materials enables manufacturers to meet
high-volume manufacture demand with less investment in labor and
processing equipment compared to thermoset materials. As produc-
tion rates increase for major aircraft programs, converting to thermo-
plastic materials is a significant enabler to achieve these rates.
its customers’ needs in each region, sector and segment. This is
achieved through a single, global senior management team, with opti-
mized and fully empowered regional teams deployed in europe, the us
and Asia to meet shared objectives and to satisfy customers.
MAIN PRODUCT / MARKET COMBINATIONS AND VALUE PROPOSITIONAerospace-grade thermoplastic materials include a range of fiber and
resin combinations to support high-performance aerospace and indus-
trial applications. Primary resin system offerings are comprised of
high-temperature, engineered thermoplastic resins. These are
produced in unidirectional tapes, prepregs and reinforced thermo-
plastic laminate (rTl) forms to enable each customer to process struc-
tural components in a manner that best fits their requirements.
high-performance thermoset materials include a wide range of contin-
uous fiber-reinforced epoxy, cyanate ester, and BMi resin systems.
These materials are focused on meeting the needs of “volume niche”
applications within the broad high-performance, engineered materials
segment, primarily focused on military aircraft, radomes, unmanned
vehicles, general aviation/private aircraft, niche aircraft interior appli-
cations, satellite structural materials, launch vehicles and high-perfor-
mance automotive applications.
Performance composite thermoplastic materials offer a combination of
composite raw materials and parts that are designed for high-end
industrial applications such as footwear, medical/orthotic, oil and gas
and other high-performance sporting goods applications. Primary resin
system offerings are comprised of lower temperature, rapid processing
and highly cosmetic materials, produced in unidirectional tapes, woven
prepregs and structural rTl to meet each of our customer’s/market’s
unique processing and performance requirements.
TenCate Advanced Composites’ unique value proposition, which
combines a broad product portfolio, “local-for-local” production
resources and highly intimate customer engagement, offers the
company many opportunities to expand its business in each of its
product categories. This value proposition is focused on two primary
goals: “Delighting customers” and “Assuring the customer’s success”.
TenCate Advanced Composites accomplishes these goals by offering a
unique technology portfolio developed to meet the specific needs of its
key market segments, partnering with customers to optimize its prod-
ucts to meet their requirements, and delivering those products in a
format that best meets each customer’s unique demands. This enables
14 | TenCate annual review 2016 | Key FiGures 2016
. Report of the Executive Board
Furthermore, the sales trend in industrial performance materials,
mainly in sports and leisure market applications, was favorable. high-
end auto sports and Formula-1 sales are promising for TenCate
Advanced Composites, but this will take time to materialize.
OUTLOOKAerospace structures and related markets will remain one of the
largest growth drivers in the future. TenCate Advanced Composites is
very well positioned for the expected ramp-up of the use of thermo-
plastic composites. Also, with an ever-expanding requirement for
wi-Fi connectivity onboard commercial aircrafts, TenCate Advanced
Composites has developed a leading position for high-purity quartz-
and glass-based thermoset materials for radome covers for antennas
in the military/defense, commercial transport and satellite communi-
cations (“satcom”) industries.
The increased demand for “commercial” space launch vehicles has
driven the Advanced Composites group’s primary positions at nearly
all major us-based launch vehicle manufacturers. TenCate Advanced
Composites has been successful in growing its material content per
vehicle by offering a well-balanced product portfolio, a unique set of
data to support these customers as they design structural compo-
nents, and the ability to support these requirements with a high
degree of customization and customer intimacy. The Advanced
Composites group intends to leverage these values to grow the
business with the emerging launch vehicle programs in europe and
Asia.
15TenCate annual review 2016 | Key FiGures 2016 |
16 | TenCate annual review 2016 | Key FiGures 2016
. Report of the Executive Board
ORGANIZATIONTenCate Advanced Armor operates four production facilities world-
wide, with two locations in the us and two locations in europe (France
and Denmark). The sales offices are located in singapore for the APAC
market and swindon for the uK market. in Poland, Brazil and Australia,
TenCate Advanced Armor has established strategic partnerships with
local companies to ensure local content and a global presence to
support our global customers. At the end of 2016, TenCate Advanced
Armor employed 236 FTe.
MAIN PRODUCT / MARKET COMBINATIONS AND VALUE PROPOSITIONThe business of TenCate Advanced Armor consists of personal and
vehicle protection. in the personal protection segment, TenCate
Advanced Armor supplies hard body armor plates that are used by mili-
tary and law enforcement forces. Furthermore, the company is a key
player in the niche market for shields used by police and elite counter-
terrorism units in high-intensity security operations. in the vehicle and
aircraft segments, the customer base consists predominantly of OeMs.
TenCate Advanced Armor supplies lightweight composite armor solu-
tions, customized to fit the platform and to meet the specified threat
levels and weight restrictions. The company prefers to engage with its
customers early in the project phase and contribute as a design and
value-adding partner by optimizing platform and armor integration, or
be a supplier of panels that are built to print.
TENCATE ADVANCED ARMOR
PROFILE AND STRATEGYTenCate Advanced Armor develops, designs and produces lightweight
composite and ceramic materials for ballistic personal and vehicle
protection in global defense and law enforcement markets. TenCate
Advanced Armor is among the leading companies for survivability solu-
tions, which consist mainly of lightweight composite (passive) armor
systems. TenCate Advanced Armor is organized and positioned to meet
the requirements from demanding OeM customers with regard to engi-
neering capabilities, technology, product range, documentation / mate-
rial database and project management. recently, TenCate Advanced
Armor entered the market for active armor systems through the devel-
opment of a patented sensor system which gives protection against a
blast from (improvised) explosives such as roadside bombs.
The strategy of TenCate Advanced Armor is aimed at being a global
partner for survivability solutions. For vehicle protection, TenCate
Advanced Armor has unique design and manufacturing capabilities to
provide land vehicles, ships and aircrafts with state of the art protec-
tion systems. with years of experience in innovative lightweight solu-
tions, TenCate Advanced Armor has become an expert in the field of
such antiballistic composite materials and systems. Combining these
capabilities with the solutions provided by the active armoring (ABDs)
system gives TenCate Advanced Armor a unique position in the
marketplace.
17TenCate annual review 2016 | Key FiGures 2016 |
revenues By GeOGrAPhiC reGiOn (inDiCATive)
38%
58%
4%
2016Americas
EMEA
Asia-Pacific
revenues By CusTOMer GrOuP (inDiCATive)
96%
4%
2016Government
Non-government
The lack of large armored vehicle programs in the global market, partly
due to further delay of already announced projects, again dominated
the overall market sentiment. Due to the successful positioning in the
Middle east market, the effect of the still hesitant global vehicle
armoring market was able to be mitigated.
The active armor (TenCate ABDs™ active blast countermeasure
system) teams of TenCate Advanced Armor were engaged in various
engineering activities during the year for third parties (contract r&D).
since there were very limited opportunities, the system has not been
put on a new vehicle program. The TenCate ABDs™ active blast coun-
termeasure system teams in both the us and europe have continued
the development of the system to a current Trl-6 level.
OUTLOOKAll market segments will further develop in a positive trend. The need
for higher protection levels for law enforcement, along with the
increased expected military spending in nATO countries and the start
of replacement and retrofit programs for vehicles will drive this trend.
The future for TenCate Advanced Armor is built on strong operating
companies carrying out the global and segment strategy. The focus for
customers will be on higher engineering content as a full survivability
solution for a person, aircraft or vehicle.
The vehicle protection market consists of land vehicles and ships and
aerospace craft (including helicopters). each segment has specific
requirements and demands specialized organizational skills. For the
design and production of aircraft protection systems, the French loca-
tion is fully equipped to be the competence center of TenCate
Advanced Armor.
in all market segments, the key driver is defense and security spending
as a response to unrest or emerging threats. The business is project-
and tender-driven, and the route to market for TenCate Advanced
Armor is to be positioned and recognized by prime contractors in the
industry as a reliable, competitive and low-risk partner.
The value proposition is based on reliability and partnership (in design,
tender processes, execution, etc.). To OeMs, the group’s engineering
capabilities and ability to customize cutting-edge materials to become
protection solutions that meet the requirements of price, weight and
performance, enable customers to be successful in qualifying and
supplying platforms to armed forces and law enforcement units.
To end users, the survivability products and solutions of TenCate
Advanced Armor help reduce fatalities when operating in hostile envi-
ronments and being exposed to threats such as ieDs and ballistic
threats. Furthermore, the low weight of the protection solutions
ensures better mobility, increased operational efficiency and lower
lifecycle and environmental costs.
Due to strategic partnerships with customers and suppliers, TenCate
Advanced Armor provides cost-effective, high-performance surviva-
bility solutions, customized to fit individual customer and end-user
requirements.
PERFORMANCE 2016revenues for TenCate Advanced Armor in 2016 were € 68 million
(2015: € 57 million).
strong growth was reported in the personal protection market
segment, where both the military (us and France) and law enforce-
ment segments grew. This was due to several upgrade programs for
the military segment, but also because governments in several key
countries upgraded the protection levels of the law enforcement
community.
in the aircraft armor segment, several large customers have contrib-
uted to a growing business.
18 | TenCate annual review 2016 | Key FiGures 2016
builds reliable partnerships with civil engineering companies,
designers, contractors, distributors and others with high quality prod-
ucts that are fit for purpose. risks for contractors in civil engineering
projects are high in general, and the reliability of the supply as well as
the functional characteristics of the materials used are crucial.
The TenCate Geosynthetics production sites in the us, europe and
Asia have the capabilities to be extremely flexible in supplying
customers worldwide.
ORGANIZATIONTenCate Geosynthetics has production sites in the us (near Atlanta in
Jefferson, Cornelia and Commerce), europe (the netherlands, France
and Austria), Malaysia (shah Alam, Jelebu and senawang) and China
(Zhuhai). The Geosynthetics group has an extensive network of inter-
national sales offices and employs 1,110 FTe worldwide.
TenCate Geosynthetics acts as a global company with high interaction
between the different locations in order to optimize supply to the
market and to combine its r&D activities and product innovations
aimed at specific needs of customer groups.
Geosynthetic products in general are engineered materials which
require a technical sales approach. This is why TenCate Geosynthetics
has teams consisting of civil and geotechnical engineers in order to
. Report of the Executive Board
TENCATE GEOSYNTHETICS
PROFILE AND STRATEGYTenCate Geosynthetics is a global leading provider of geosynthetic prod-
ucts (nonwovens, wovens, grids and fabricated geosynthetic products)
and solutions that enhance infrastructure, protect the environment and
conserve natural resources. The majority of the business is related to
civil works and infrastructure projects.
Geosynthetic products are used, among other functions, for separation
of dissimilar soils, enhancement of soil drainage and filtration charac-
teristics, reinforcement of weak soils, dewatering of sludge, erosion
control and shoreline protection. solutions which benefit from the use
of geosynthetics include, among others, roadways, railways, retaining
walls, steepened slopes, drainage & filtration systems, marine struc-
tures and waste containment structures such as landfills.
in addition these products, TenCate Geosynthetics has a niche product
portfolio of industrial fabrics which are applied mainly in the agricul-
tural and horticultural markets.
TenCate Geosynthetics aims to provide the best technical solutions to
its customers along with excellent technical support and customer
service. A key point within the strategy of the Geosynthetics group is
to be able to have quick response times to the requirements of local
markets and direct customers. As a supplier, TenCate Geosynthetics
19TenCate annual review 2016 | Key FiGures 2016 |
revenues By GeOGrAPhiC reGiOn (inDiCATive)
45%
34%
21%
2016Americas
EMEA
Asia-Pacific
revenues By CusTOMer GrOuP (inDiCATive)
48%52% 2016Government
Non-government
OUTLOOK The noticeable slight improvement could be a sign of a more sustain-
able growth of the infrastructure and transportation market, especially
in the us, which is an important geographical market for TenCate
Geosynthetics.
increasing oil and raw material prices could trigger a recovery of the
geosynthetics market prices. Although this trend will trigger higher
prices for geosynthetics in general, low oil prices in the past have
negatively affected funds for infrastructure investments as well as
projects in the oil industry. Growth is anticipated in specific market
sectors. it is envisaged that the private sector will strengthen, which
will give rise to opportunities in markets for renewable energy, private
housing development and environmental remediation.
Delivery performance (global product supply) will be further improved
through site optimization programs and a firm global organization.
directly consult with customers regarding the materials used and the
way these materials should be installed. in this way TenCate Geosyn-
thetics not only provides the materials, but is also solution oriented.
MAIN PRODUCT / MARKET COMBINATIONS AND VALUE PROPOSITIONTenCate Geosynthetics defines six market segments (for infrastructure):
■■ Building sites ■■ Transportation ■■ local government ■■ natural resources & energy ■■ water ■■ environmental infrastructure.
The products in the portfolio of TenCate Geosynthetics are engineered
towards the specific needs and technical qualifications of the different
market segments, although similar functionalities may be required,
such as separation, drainage, filtration, reinforcement or stabilization.
As a global supplier and solutions provider, the value proposition of
TenCate Geosynthetics is built on trust and reliability. The function-
ality of materials is crucial for the success of a project, and the specific
application knowledge of the Geosynthetics group is an important
supporting capability. Delivery performance is also a key element of
the value proposition. TenCate Geosynthetics is valued in the market-
place for its broad product offering, enabling customers to limit
suppliers as a risk-reducing element.
PERFORMANCE 2016Geosynthetics markets globally were in a stable mode during 2016,
and in general are still under the influence of low government spending
in infrastructure projects, although a slight recovery is emerging.
Decreasing raw material costs during the year had an impact on the
average market prices. Although sales volumes showed an increase,
revenues of TenCate Geosynthetics stabilized compared to last year at
a level of € 313 million (2015: € 319 million).
The contribution from Asian business improved significantly due to
internal measures and some improvements in local markets.
20 | TenCate annual review 2016 | Key FiGures 2016
ORGANIZATION TenCate Grass is a globally operating organization, with an emphasis
on yarn production. Manufacturing is organized to reach optimal econ-
omies of scale, while remaining flexible to maximize delivery perfor-
mance to its customers. The group has built long-standing relation-
ships supplying yarn and backing components to established synthetic
turf system manufacturers worldwide. At year-end 2016, TenCate
Grass employed 912 FTe (2015: 966 FTe).
MAIN PRODUCT / MARKET COMBINATIONSyarn is the leading product of TenCate Grass. TenCate produces
components such as carpet backing and sub-base elements that
complement its yarns to build quality turf systems.
each application demands specific yarn qualities to comply with
required system qualifications and certifications, especially in the
sports market. soccer, field hockey and American football are the main
sports segments. landscaping has been a fast-growing segment of the
synthetic turf market. The most important selling factor in this
segment is the natural appearance and durability of the product, most
often realized through a combination of yarn types.
. Report of the Executive Board
TENCATE GRASS
PROFILE AND STRATEGYTenCate Grass provides synthetic grass systems and components to
suppliers of sports fields, and synthetic grass landscaping products
worldwide. TenCate Grass is the leading supplier of synthetic turf
yarn. yarn production is based in the netherlands (nijverdal), the us
(Dayton, Tennessee) and the united Arab emirates (Dubai), which
guarantees a quick response time to customer requirements.
The strategy of the yarn business is to be the supplier of choice for the
synthetic turf industry, based on product quality (durability, esthetics
and functional performance), the breadth of the product range,
delivery performance and marketing support.
Through its in-house brands GreenFields® and TigerTurf™, TenCate
Grass offers complete synthetic turf systems, including installation, to
the end-user market in certain geographic regions. GreenFields® is
posi tioned as a premier brand for sports systems, with a focus on
quality, environmentally responsible components and innovative
design. GreenFields® is a FiFA Preferred Producer. Apart from
synthetic turf, GreenFields® is also engaged in hybrid sports systems.
in the uK, new Zealand, Australia and selected export markets, Tiger-
Turf™ is positioned as a premier brand for sports, land scaping and
educational applications; in the us, the brand’s focus is on land-
scaping.
21TenCate annual review 2016 | Key FiGures 2016 |
revenues By GeOGrAPhiC reGiOn (inDiCATive)
29%
55%
16%
2016Americas
EMEA
Asia-Pacific
revenues By CusTOMer GrOuP (inDiCATive)
50%50% 2016Government
Non-government
exploiting TenCate brand strengths of quality, durability, innovation
and high-level performance. Although synthetic turf sports fields need
to comply with strict local environmental regulations and sports-tech-
nical requirements, the rise of synthetic turf systems has come with
public environmental and health concerns. it is a key concern for
TenCate Grass to supply end users with sustainable and safe sports
systems, and a great deal of research has been carried out over the
years in this regard, including research and development of fully recy-
clable sports systems. This aspect has become even more important
because of recent concerns about rubber infill granulate in sports
fields. As a result of such concerns, several projects that were due to
be installed in 2016 have been delayed, although the respective
synthetic turf systems comply with current local environmental and
safety norms.
By the end of 2016, TenCate exited the 50% joint venture with edel
Grass. This company will remain a valued customer of TenCate Grass,
which will continue to support its growth as a recognized supplier of
synthetic turf systems.
in February 2017, TenCate agreed to acquire Ceelen sport Construc-
ties, the market leader in the netherlands for the design and installa-
tion of synthetic turf sports fields.
TenCate Grass operates two in-house tufting facilities, in the uK and
new Zealand (TigerTurf™ locations). Apart from tufted grass carpet,
TenCate Grass also produces woven synthetic turf. Through the Green-
Fields® and TigerTurf™ brands, both synthetic grass carpet and turnkey
system installations are offered to the market.
A relatively new product / market combination is a hybrid sports
system, supplied and installed through GreenFields®, combining the
durability of synthetic turf with all aspects of a natural grass field.
The value proposition of TenCate Grass as a supplier of turf compo-
nents is based on partnerships along the value chain. A reliable supply
is crucial for the efficient industrial process of grass carpet manufac-
turing, and consistent product quality specifications are crucial for
integrators and installers that have to comply with strict end-product
qualifications. A concerted approach with various partners in the value
chain is a key element of success.
GreenFields® and TigerTurf™ have built their individual positions in the
marketplace. The value proposition of GreenFields®, an entity predom-
inantly focused on sports systems, is aimed at creating value for
synthetic grass sports systems through innovation and distinctive
quality. TigerTurf™ uses a broad market approach, with economic “fit
for purpose” products and systems. TigerTurf™ operates as an installer
of educational, recreational, landscaping and sports fields, and is
mainly active in new Zealand, Australia and the uK. TigerTurf™
branded products are also sold through specialized distributors in
other geographical locations.
PERFORMANCE 2016revenues of TenCate Grass remained stable at € 289 million (2015:
€ 293 million), reflecting a hesitant market environment in the sports
segment.
The grass industry is in a consolidation phase. large industry partici-
pants are aiming to integrate the various stages in the production
process of complete turf systems. in recent years, TenCate Grass has
engaged in forward integration from its position in components into
downstream market activities, in order to introduce innovative and
durable new systems. TigerTurf™ and GreenFields® represent
TenCate’s direct sales channel.
TenCate Grass research facilities are market leading. Quality control
through the value chain has been a driver of forward integration,
22 | TenCate annual review 2016 | Key FiGures 2016
. Report of the Executive Board
OUTLOOKThe synthetic turf market will continue to grow. The landscaping
market is expected to outperform the sports market. TenCate Grass
aims at increasing its market presence in the us. emphasis will be
placed on increasing its customer orientation and service as a dedi-
cated yarn producer through the optimization of its production capacity
and operational excellence initiatives. TenCate Grass will also empha-
size the commercialization of the innovative systems developed in
recent years.
23TenCate annual review 2016 | exeCuTive BOArD AnD seniOr MAnAGeMenT |
Executive Board and senior management
Supervisory Board
Jan H.L. Albers (1952), chairman of the
executive Board and Chief executive Officer
Jan Albers has been a member and chairman
of the executive Board since August 2016.
Other activities:
Chairman, supervisory board Psv n.v.
Member, supervisory board nederlandse
loterij
Boudewijn T. Molenaar (1953), chairman
Commenced in office: 2016
end of current term: 2020
Partner and managing director, Gilde Buy Out
Partners B.v.
Member, supervisory board Teleplan interna-
tional n.v.
Member, supervisory board royal reesink
n.v.
Jan C.M. Hovers (1943)
Commenced in office: 2008
end of current term: 2020
Member, supervisory board randstad Groep
nederland bv
Former Chief executive Officer, stork nv and
OCe nv
Frank R. Spaan (1955), member of the
executive Board and Chief Financial Officer
Frank spaan has been a member of the
executive Board since October 2016.
Other activities:
Member and vice-chairman, supervisory
board rabobank Twente Oost
Erik J. Westerink (1961)
Commenced in office: 2016
end of current term: 2020
CeO and managing partner, Parcom Capital
Management B.v.
Chairman, supervisory board rh Marine B.v.
Member, supervisory board Frames Group
Member, supervisory board hartstichting
Board member, stichting vrienden Teylers
Museum
Loek de Vries (1951)
Commenced in office: 2016
end of current term: 2020
Former Chief executive Officer, Koninklijke
Ten Cate n.v.
TenCate Protective Fabrics
Don M. Olsen (1954), CeO
Mark D. Christman (1971), CFO
TenCate Advanced Composites
Dave C. Clarke (1958), CeO
stephen l. littauer (1956), CFO
TenCate Advanced Armor
steen Tanderup (1970), CeO
wilfred sluyter (1972), CFO
TenCate Geosynthetics
wally l. Moore (1963), CeO
Akin s. Kavur (1958), CFO
TenCate Grass
Michael r. vogel (1964), CeO
Jan A. Teekens (1971), CFO
Fred J.A.M. van Houten (1951)
Commenced in office: 2016
end of current term: 2020
Chairman of Design, Production and Manage-
ment, Faculty of engineering Technology,
university of Twente
Professor of Design engineering, university
of Twente
Member, supervisory board Apollo vrede-
stein B.v.
Member, smart industry Forum
Member of the royal Flemish Academy of
Belgium for sciences and the Arts
Member of the German Academy of science
and engineering
All members of the supervisory Board have
Dutch nationality.
24 | TenCate annual review 2016 | COlOPhOn
Text
Koninklijke Ten Cate B.v., Almelo
Translation
vvh business translations, utrecht
Colophon
PROTECTING PEOPLE
Koninklijke Ten Cate bv
Stationsstraat 11
P.O. Box 58
7600 GD Almelo
Netherlands
Telephone +31 (0)546 544 911
E-mail royal@tencate.com
Web www.tencate.com
Koninklijke Ten Cate bv
Annual review 2016
IN TRANSITAT WORK
IN HABITATSDURING LEISURE
PROTECTING PEOPLE
KTC JV2016 ENG-Omslag plano.indd 1 02-05-17 10:55
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