koninklijke ten cate bv€¦ · advanced composites advanced armor protective fabrics geosynthetics...

PROTECTING PEOPLE

Koninklijke Ten Cate bv

Stationsstraat 11

P.O. Box 58

7600 GD Almelo

Netherlands

Telephone +31 (0)546 544 911

E-mail [email protected]

Web www.tencate.com


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


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.


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.


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.


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.



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



60%

30%

10%

2016Americas

EMEA

Asia-Pacific


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



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.



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.



38%

58%

4%

2016Americas

EMEA

Asia-Pacific


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.


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


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



45%

34%

21%

2016Americas

EMEA

Asia-Pacific


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.


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.


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.



29%

55%

16%

2016Americas

EMEA

Asia-Pacific


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,



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)



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)



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)



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)



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


Stationsstraat 11

P.O. Box 58

7600 GD Almelo

Netherlands

Telephone +31 (0)546 544 911

E-mail [email protected]

Web www.tencate.com


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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