2009 - Jaarverslag

Foreword by the Chairmanof the Executive BoardGENERALThe difficult economic conditions and the situation in the financialmarkets were unfavourable for TenCate and its customers during thereporting year. Under these circumstances, it was logical to abandonour profit target, partly in view of the emphasis placed on the cashposition and the management of the company’s balance sheet at thebeginning of the year. TenCate nevertheless strengthened its focus onthe future in 2009, despite the lower net profit. In strategic terms,considerable progress was made on various fronts. The global trendsthat have determined the TenCate’s growth over the past few yearsremain fully intact. All our stakeholders should continue to have faithin TenCate’s potential. We will benefit fully as soon as there is anupturn in the market.OPERATIONAL DEVELOPMENTS IN 2009In operational terms, 2009 was characterised by an increased focus oncontrol of working capital and costs. The weaker performance, whichhad already been anticipated in 2008, turned out to be more seriousthan was first expected, particularly because governments also had tocontend with tight budgetary conditions. TenCate therefore maintainedits restrained investment policy.Developments resulted in the total number of employees (FTEs) beingreduced by 15%. With regard to cost reduction, the emphasis wasinitially on countries outside the Netherlands, where it was possibleto respond more flexibly to lower revenues, particularly in the UnitedStates. The operating results in the first three quarters of 2009accordingly began to rise again. In the fourth quarter, structuralmeasures were implemented in the Dutch companies, involving one-offcosts. We also adjusted our credit policy in the seasonal synthetic turfmarket, as a result of which revenues were shifted substantially into2010. These measures put pressure on results in the fourth quarter, butgive us a better starting point in the current year. The objective ofmaintaining a healthy financial position based on our own resourceswas achieved, although profit came under considerable pressure.I would also like to mention a number of positive developments.Sales of TenCate Defender M grew spectacularly. The U.S. Armypublicly praised TenCate for this innovative product. It has become thestandard for flame-resistant protection. In the field of composites,various solutions were qualified for attractive new markets, includingsustainable energy generation. New relationships were established inthe environmental market for the processing of industrial waste water(TenCate Geotube ® ). That played a part in our winning the largestorder in this field in Asia. Finally, we made good progress withalliances in the synthetic turf market through the interest TenCateacquired in TigerTurf at the beginning of 2009.BUSINESS MODELTenCate’s business model proved to be valid and valuable also in timesof weaker economic conditions. This model offers a framework inwhich to focus on complete, worldwide value chains. The fourcornerstones – end-user marketing, product differentiation, costleadership and technological innovation – remained as fundamentalas ever. The emphasis during the reporting year, however, was onthe third cornerstone. That does not mean no progress was madewith regard to the other policy areas. On a technological level, theinnovative weaving technology for integrated synthetic turf systemswas introduced. Xennia Technology presented a process demonstrationmodel of the digital textile finishing process.Annual Report 2009 19