2009 - Jaarverslag

Report of the Executive BoardGENERALThe fall in demand in many of the markets in which TenCate operateswas on an unprecedented scale. The decline was aggravated by sharpinventory cuts in production chains. The fall in demand was mainlydue to tight financial conditions among public-sector and industrialcustomers. The structural market outlook remained favourable.After all, TenCate’s products and systems are produced in anticipationof global market trends which offer healthy prospects in the longerterm. TenCate’s positioning in these markets has not been affectedand has even been strengthened in some individual fields.The trend in sales of composites for the aviation industry wasdisappointing. A long-term development project for Airbus A380components conducted jointly with various partners was intendedto deliver strong revenue growth in 2009. Large sums were investedin order to meet the expected strong growth in demand. Althoughexpectations were not fulfilled, the project has only been deferredand the outlook remains positive.The performances of the various market groups are detailed in theoverview of activities in this report (page 33).The commercial performance in 2009 can be characterised by theabsence of large orders in the project market, both in the defence fieldand in the infrastructure market. Annual revenues and results in thelast few years have to a large extent been determined by orders frompublic-sector bodies.The international synthetic turf market had to contend with a seriouslack of financing facilities. Moreover, a number of geographic marketsshowed substantially lower demand as governments exercised greaterrestraint. TenCate was cautious about accepting orders in the finalquarter (traditionally at reduced off-season prices), partly due to thetight financial policy. This put additional pressure on revenues.In 2008 it was announced that plans had been developed to achieve asubstantial improvement in the results of activities in the Netherlands.These plans were accelerated in the second half of 2009. This wasdue to the sharp drop in European market demand and the growingdiscrepancy as compared to the financial results of the rest of thecompany.At the beginning of 2009, an interest was acquired in TigerTurf,a leading supplier of synthetic turf systems mainly in Australia,New Zealand, the United Kingdom and the United States. The buy& build strategy was nevertheless deferred. Priority was given tomaintaining healthy balance sheet ratios and cash management.The most striking positive development was the continuing growthin sales of the TenCate Defender M product range. AlthoughTenCate is continuing to expand the range, to meet specific customerrequirements, there is a need for further broadening, in terms ofboth end-users and the product portfolio. This need was met duringthe year.Important milestones were achieved in the technological field.The weaving of high-grade synthetic turf structures was successfullyimplemented and Xennia made important advances in surface finishingfor the application of ultra-thin coatings with specific characteristics.Annual Report 2009 25