Rieter order intake up 7% in 2019

Net profit rose to CHF 52.4 million (6.9 per cent of sales) and thus was significantly higher than in the previous year (2018: CHF 32.0 million or 3.0 per cent of sales).

In financial year 2019, Rieter recorded an order intake of CHF 926.1 million, which was 7 per cent up on the prior-year period (2018: CHF 868.8 million). This development is attributable to a strong fourth quarter, in which Rieter booked orders totaling CHF 401.6 million (fourth quarter 2018: CHF 119.0 million). At the end of 2019, the company had an order backlog of about CHF 500 million (December 31, 2018: about CHF 325 million).

In 2019, Rieter Group sales amounted to CHF 760.0 million (2018: CHF 1 075.2 million), which corresponds to a decrease of 29 per cent compared to the previous year.

Rieter generated an EBIT margin of 11.2 per cent or CHF 84.9 million (2018: 4.0 per cent or CHF 43.2 million). This includes the non-recurring profit from the sale of real estate in Ingolstadt in the amount of CHF 94.5 million. As a result of the capacity adjustment and cost reduction measures, the number of employees decreased by 11 per cent to 4 591 (December 31, 2018: 5 134).

Net profit rose to CHF 52.4 million (6.9 per cent of sales) and thus was significantly higher than in the previous year (2018: CHF 32.0 million or 3.0 per cent of sales). The contribution from the sale of real estate in Ingolstadt had an impact of CHF 67.2 million (EUR 61.6 million) at the net profit level. Free cash flow in 2019 was CHF 42.3 million (2018: CHF 63.6 million). Net liquidity rose to CHF 162.1 million (December 31, 2018: CHF 150.2 million). The equity ratio as of December 31, 2019, was 47.8 per cent (prior year balance sheet date: 44.6 per cent).

The reporting year 2019 was characterised by the trade conflict between the USA and China, excess capacity in the spinning mills as well as political and economic uncertainties in regions of importance to Rieter. Against this background, sales in the Asian countries (without China, India and Turkey) amounted to CHF 293.5 million (-32 per cent). In India, sales declined by 32 per cent to CHF 99.9 million. Rieter’s sales in Turkey amounted to CHF 66.8 million (-57 per cent).

At CHF 136.7 million, sales in China were 8 per cent down on the previous year. In North and South America, sales declined only slightly to CHF 105.8 million (-3 per cent). In the Europe region, sales fell by 13 per cent to CHF 41.2 million, while in the Africa region, Rieter recorded a decline in sales to CHF 16.1 million (-55 per cent).

In the Business Group Machines & Systems, sales of new machines were at a very low level in the 2019 reporting year, falling by 42 per cent to CHF 389.0 million (2018: CHF 669.3 million). The business group posted an EBIT of CHF -50.8 million (2018: CHF -9.7 million). This was due to the lower volume and expenditure on the ongoing innovation program. Machines & Systems received an order intake worth CHF 562.8 million, an increase of 20 per cent compared to the previous year (2018: CHF 468.3 million). This is primarily due to the fourth quarter of 2019, in which an order intake worth CHF 307.0 million was booked. This figure includes orders from Cotton & Textile Industries Holding Company, Cairo (Egypt), for the delivery of ring and compact spinning systems, including installation services, of around CHF 165 million.

The Business Group Components recorded a drop in sales of 12 per cent to CHF 230.2 million compared to the prior-year period (2018: CHF 262.3 million). This is attributable to the reluctance to invest in the markets, which primarily affected the business activities of SSM and Suessen. The wear and tear parts business continued at a normal level. At CHF 10.7 million, the business group generated a significantly lower EBIT compared to the previous year (2018: CHF 32.5 million). In addition to lower sales to third parties, this is due to the decline in sales from deliveries to Machines & Systems, which fell by 39% to CHF 52.6 million (2018: CHF 86.2 million). At CHF 222.0 million, order intake at Components was down by 15 per cent compared to the previous year (2018: CHF 260.1 million), primarily in the Business Units SSM and Suessen.

With sales of CHF 140.8 million, the Business Group After Sales recorded a slight decline of 2 per cent compared to the previous year (2018: CHF 143.6 million). This is mainly attributable to the lower volume in the machine business and the associated lower demand for installation services. In the spare parts business, After Sales generated sales at the level of the previous year. The business group increased EBIT to CHF 23.2 million (2018: CHF 21.3 million). With an order intake of CHF 141.3 million, After Sales also recorded an increase of 1% compared to the previous year (2018: CHF 140.4 million).

Innovations successfully launched

At ITMA 2019 in Barcelona (Spain), Rieter presented a comprehensive range of innovations for all four end spinning systems established on the market. The innovations aim to reduce raw material, energy and labor costs while increasing productivity and flexibility in the spinning mill. The strong demand for innovative solutions since the ITMA 2019 underlines Rieter’s technology leadership. Thus, the company has achieved another important milestone in the implementation of the company strategy. The innovation programme continues.

Ingolstadt Location

Rieter completed the sale of real estate in Ingolstadt (Germany) to GERCHGROUP AG of Düsseldorf (Germany) on September 13, 2019, which resulted in a one-time contribution of EUR 61.6 million at the net profit level. The Rieter employees in Ingolstadt will move into a new building in 2021.
Rieter is the world’s leading supplier of systems for short-staple fiber spinning. Based in Winterthur (Switzerland), the company develops and manufactures machinery, systems and components used to convert natural and manmade fibers and their blends into yarns. Rieter is the only supplier worldwide to cover both spinning preparation processes and all four end spinning processes currently established on the market. Furthermore, Rieter is a leader in the field of precision winding machines. With 16 manufacturing locations in ten countries, the company employs a global workforce of some 4 590, about 21% of whom are based in Switzerland.