Slide 1: Results 2015
Results 2015 . . . /. investor Media . . presentation, . . . . March . . 15, . 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . . . . . . Joris Gröflin, Group CFO. . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and summary of 2015 Dr. Norbert Klapper 2. Financial results 2015 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2015 2
Slide 3: Rieter – Highlights 2015
Rieter – Highlights 2015 • Market share of ~ 30% on last year’s level • “STEP UP” program on track: 1. Innovation: R&D continued and in % of sales increased 2. After sales: Sales growth of 10% in 2015 3. Profitability: − EBITDA and net profit margins improved despite 10% lower sales − Free Cash Flow
Slide 4: Rieter position
Rieter position Market share held at 30% thanks to strong position Value (CHF million) Spindle equivalents (in million) 4 220 18.4 3 990 3 950 3 819 17.1 3 610 3 400 14.7 13.6 13.8 11.4 22% 25% 25% 26% 30% ~30% 7% 9% 10% 12% 17% ~16% 2010 2011 2012 2013 2014 2015e 2010 2011 2012 2013 2014 2015e 1.23
Slide 5: Sales development by region
Sales development by region Growth in Asian countries as well as India CHF million • Asian countries with 19% growth against 2014 Asian 324 • Americas on strong level thanks countries1) 273 +19% to large orders booked in 2014 Americas 200 +1% • Turkey with lower sales (-46%) 199 than in 2014, first
Slide 6: Innovative solutions
Innovative solutions Strong R&D efforts with continued commitment for innovation Rieter at ITMA Milan 2015 R&D expenses (CHF million / in % of sales) 45.0 46.3 46.6 42.7 39.5 32.6 4.8% 4.3% 4.0% 4.5% 3.7% 3.7% 2010 2011 2012 2013 2014 2015 R&D expenses R&D expenses in % of sales Results 2015 6
Slide 7: After Sales Excellence
After Sales Excellence Sales growth of 10% achieved against 2014 – initiative on track Sales (CHF million) Growth target and main growth drivers: • In 2015 growth despite adverse currency >+30% translation effects in all areas (parts, > 166 service and installations) 140 >+26 -3 • Growth target agai
Slide 8: Profitability improvement
Profitability improvement Continued improvement of EBITDA margin Sales and profitability development Profitability improvement measures: (CHF million) Value-based pricing 1 153 Improvement of product mix and margins 1 061 1 035 1 037 Measures to decrease Swiss Franc 889 appreciation impact in
Slide 9: Agenda
Agenda 1. Introduction and summary of 2015 Dr. Norbert Klapper 2. Financial results 2015 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2015 9
Slide 10: Rieter – Financial highlights 2015
Rieter – Financial highlights 2015 Increase in profit margin and net liquidity – dividend on prior year level CHF million, except dividend Orders Stronger Strong Components, stable After Sales, positive trend of 801.6 received HY2 Machines & Systems in HY2 Sales 1 036.8 - 10% Order backlog delivered
Slide 11: Rieter – Financial key figures
Rieter – Financial key figures Improvement of EBITDA profitability despite lower sales CHF million FY 2015 HY2 2015 HY1 2015 FY 2014 Orders received 801.6 413.3 388.3 1 146.1 Sales 1 036.8 482.9 553.9 1 153.4 EBITDA 115.9 49.9 66.0 125.4 EBITDA margin (of sales) 11.2% 10.3% 11.9% 10.9% EBIT 73.1 27.
Slide 12: Orders by business group
Orders by business group Orders received at CHF 801.6 million – increase in HY2 by 6% CHF million • Machines & Systems with CHF 457.6 700 million orders: -45% vs. 2014 with low 655 point in the third and upward trend in 600 the last quarter 491 +6% • After Sales with CHF 126.3 million: 500 -10% vs.
Slide 13: Sales by business group
Sales by business group Sales at CHF 1 036.8 million – increase at After Sales and Components CHF million • After Sales: 10% growth in 2015 700 (CHF 139.8 million sales) 631 • Components: 13% growth in 2015 600 554 (CHF 194.7 million sales) 522 500 483 • Machines & Systems: 18% decline in 2015 (CHF
Slide 14: Operating result (EBIT)
Operating result (EBIT) EBIT margin at 7.0% of sales In % of 7.3% 7.0% • EBITDA margin increase to 11.2% (2014: 10.9%) of sales sales CHF million -14% • EBIT margin of 7.0% of sales stems from 100 85 • Strong development at Components and After 90 Sales 80 73 • Machines and Systems EBIT following lo
Slide 15: Rieter's Swiss franc challenge
Rieter’s Swiss franc challenge Further reduction of Swiss franc cost base in 2015 Sales in CHF million • Swiss franc exposure further reduced since 2014 1 061 1 153 1 037 • Investments in China and India as well 53% as Czech Republic allow for greater flexibility 43% 44% 40% • Measures have been ini
Slide 16: Net profit and RONA
Net profit and RONA Net profit margin increased to 4.8% In % of • Financial result is with –CHF 7.9 million better than sales 4.6% 4.8% previous year (-CHF 13.7 million) CHF million • Tax rate improved to 23.6% (previous year 25.8%) 60 -6% • Earnings per share decreased to CHF 10.92 53 • Board of Di
Slide 17: Changes in workforce
Changes in workforce Total workforce decreased by 8% Temporaries • Reduction of workforce by 8% mainly in % 20.2% 19.6% 11.3% through reduction of temporaries FTE1) following the 10% decrease of sales 7000 -8% • Higher permanent employees are 6 225 mainly in Czech Republic and China 6 003 6000 5 727
Slide 18: Balance sheet
Balance sheet Net liquidity increased to CHF 212.4 million and equity ratio to 44% • Net working capital reduced to CHF 5.2 31.12. 30.06. 31.12. million CHF million 2015 2015 2014 • Net liquidity increased to CHF 212.4 Total assets 1 001.4 991.6 1 209.4 million boosted by strong Free cash flow • Div
Slide 19: Balance sheet
Balance sheet Stronger and shorter balance sheet Total assets, equity and equity ratio Liquid funds and net liquidity (CHF million / in %) (CHF million) 44% 446 1 209 43% 1 100 37% 1 001 35% 992 334 300 767 265 712 568 557 212 172 139 119 388 442 424 444 HY1 HY2 HY1 HY2 HY1 HY2 HY1 HY2 2014 2014 201
Slide 20: Net working capital
Net working capital Significant decrease of net working capital to CHF 5.2 million • Significant net working capital decrease 30.12. 30.06. 31.12. achieved in HY2 due to lower CHF million 2015 2015 2014 inventories and receivables as well as higher payables Inventories 191.5 207.8 253.1 • Advance pa
Slide 21: Capital expenditures / D&A
Capital expenditures / D&A Capital expenditures below the level of depreciation / amortization CHF million Capital expenditures Depreciation & Amortization 70 70 60 60 +5% 50 -25% 50 42 41 43 40 40 15 32 15 19 30 30 1 11 1 1 20 12 1 20 10 10 16 10 10 14 15 13 0 4 0 2014 2015 2014 2015 Machines & Sys
Slide 22: Free cash flow
Free cash flow Strong free cash flow of CHF 65.0 million Free cash flow prior divestment positively CHF million 2015 2014 impacted by Net profit 49.8 52.9 • Change of NWC Interest expense (net) 5.9 10.7 • Lower capital expenditure Tax expense 15.4 18.4 Depreciation and amortization 42.8 40.8 +/- Non
Slide 23: RONA
RONA Return on net assets (RONA) of 9.5% slightly above cost of capital CHF million 31.12.2015 31.12.2014 2015 Non-current assets 370.1 387.3 Inventories and receivables 297.3 376.5 Liquid funds 334.0 445.6 Total assets 1 001.4 1 209.4 Non-current liabilities (excl. debt) -143.9 -141.7 Current liabi
Slide 24: Agenda
Agenda 1. Introduction and summary of 2015 Dr. Norbert Klapper 2. Financial results 2015 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2015 24
Slide 25: Strategic focus
Strategic focus RIETER is the world's leading supplier of short staple spinning systems offering the full range of machines, parts and components Creating customer value through • system expertise • innovative solutions • after sales excellence • global presence Generating profitable growth and
Slide 26: Actions 2016
Actions 2016 • Innovation: Focus on MMF (Man-Made Fibre) offering at ITMA Shanghai • India: Local availability of full compacting system • China: Expanded sales and service presence in Xinjiang province • After Sales: Continued focus on growth • Profitability improvement: Implementation of productio
Slide 27: Outlook
Outlook • The year 2015 was characterized by a healthy demand for products and services provided by the business groups After Sales and Components. By contrast, spinning mill owners were reluctant to invest into new equipment. • In the first semester, sales will be impacted by the cyclically lower o
Slide 28: Strategic focus – mid-term targets
Strategic focus – mid-term targets Sales Sales growth above market EBIT margin1) ~10% RONA2) ~14% Target pay-out ratio of at least Dividend policy 40% of net profits 1) At sales of ~1.3 CHF bn 2) RONA is calculated as net result before interest costs and write-off of financial assets divided by net
Slide 29: Disclaimer
Disclaimer Rieter is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoever
Slide 30: Values and principles
Values and principles Results 2015 30
Slide 31: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2015 31
Slide 32: Rieter's progress towards the mid-term targets
Rieter’s progress towards the mid-term targets Committed execution of “STEP-UP” initiatives since October 2014 Mid-term targets 17/18 “STEP-UP” “STEP-UP” Progress Delight your Sales growth customer Introduction of BG After Sales Sales above market Price Mitigation of CHF appreciation impact Margin E
Slide 33: Key investment highlights of Rieter
Key investment highlights of Rieter 1 Long-term growth industry Experienced Broadest global management 6 2 systems team and board supplier of directors Rieter Efficient cycle Leading market 5 management 3 positions with and value global footprint/ creation after sales Technology and 4 innovation lea
Slide 34: 1 – Long-term growth industry
1 – Long-term growth industry Rieter will profit from market drivers and shifts Textile mill consumption (in million tons) Performance shift (in %) 2.2% 98 30% 37% 85 42% 44% 47% 74 60% 51 70% 63% 58% 56% 53% 40% 2000 2010 2014 2020 2009 2010 2011 2012 2013 2014 Cotton xx% CAGR short staple fibers H
Slide 35: 1 – Long-term growth industry
1 – Long-term growth industry Market for short staple spinning equipment is assumed to grow in value Value (CHF million) Spindle equivalents (in million) +1.5% -0.4% 3'830 4'070 13.8 13.6 2014 Mid-term 2014 Mid-term estimate estimate Without Winder Endspinning machines only Market growth is driven
Slide 36: 2 – Rieter systems with superior customer value
2 – Rieter systems with superior customer value Higher total value of ownership for Rieter systems customers Exemplary spinning mill lay-out: Compact ring spinning system Draw Blowroom Card Comber Flyer Compact ring spin frame Rieter System Value Proposition One-stop-shop: providing customer speci
Slide 37: 2 – Rieter: Business Groups
2 – Rieter: Business Groups Strong business model serving a global market Machines & Systems After Sales Components Customer focus Spinning mills Rieter installed base 3rd party installed base and 3rd party OEM’s Products Machines & Systems Parts, Services & Parts & Components (Capital Goods) Instal
Slide 38: 2 – Rieter: Business Groups
2 – Rieter: Business Groups Preparation • Leading position in high-end segment for all fields Machines & of activity Systems • Recognized as an innovation leader with superior Ring Compact Rotor Air-Jet products Transport Automation Monitoring • Best support to leverage customers’ investment in Riet
Slide 39: 3 – Leading market positions with global footprint
3 – Leading market positions with global footprint Strong global production, sales and service footprint to serve key markets Results 2015 39
Slide 40: 3 – Leading market positions with global footprint
3 – Leading market positions with global footprint Continuous increase of sales in Asia World-wide installed capacity Rieter sales in CHF million (spindle equivalents) in % 1.200 1153 Africa Europe Americas 1061 1035 1037 174 7% 4% 1.000 151 140 China 2% 870 889 223 131 Asian 800 103 175 142 India 1
Slide 41: 4 – Technology and innovation leadership
4 – Technology and innovation leadership Past break-through examples prove technology and innovation leadership Widest, self OMEGAlap Double-head New Compact Rotor sharpening (combing autolevel. Air-Jet spinning spinning Machines & card prep.) draw frame Machine machine K 46 machine R 66 Systems 200
Slide 42: 5 – Efficient cycle management and value creation
5 – Efficient cycle management and value creation Rieter’s market is characterized by cyclical fluctuations Spindle equivalents (shipments) - in million 20 Investment cycle triggers: 19.1 18.4 China 17.1 •17.5Positive 17.0 17.5 spinning mill 15.5 margins (conversion India 14.7 14.7 15 10.3 13.6 13.8
Slide 43: 5 – Efficient cycle management and value creation
5 – Efficient cycle management and value creation Significant share of EBIT stems from After Sales and Components Orders received (CHF million) Sales (CHF million) EBIT (CHF million) -2% 19% 20% 27% 801.6 13% 1 036.8 46% 73.1 57% 16% 68% 36% Machines & Systems Components After Sales Others / corpora
Slide 44: 5 – Efficient cycle management and value creation
5 – Efficient cycle management and value creation Focus on profitability Sales and profitability development Profitability improvement measures: (CHF million) Value-based pricing 631 557 554 Optimized utilization of existing capacity 538 523 522 487 478 483 Improvement of product margins 401 1
Slide 45: Profitability improvement mid-term: 10% EBIT margin
Profitability improvement mid-term: 10% EBIT margin Key initiatives lead to the profitability improvement Mid- HY1 HY2 HY1 HY2 Key initiatives term 2014 2014 2015 2015 Target1) Machines & Systems 376.1 477.4 392.7 309.6 Innovations / CN,IN / Pricing Sales After Sales 59.6 67.9 69.6 70.2 After Sales
Slide 46: Profitability improvement mid-term: 14% RONA
Profitability improvement mid-term: 14% RONA Reduction of net assets with increased profitability in order to achieve target • Reduction of net working capital Net profit by half-year • Sale of non-core assets (before interest cost / mCHF) • Investments on or below D&A level 60 50 HY2 2014 40 13.7%
Slide 47: 5 – Efficient cycle management and value creation
5 – Efficient cycle management and value creation Dividend of CHF 4.50 paid out for 2014 – proposal 2015 at CHF 4.50 per share Dividend Pay-out ratio Reserves from capital (in CHF per share) (in % of net profit) contributions (in CHF million) 6.0 41 41 129.4 39 39 4.5 4.5 1) 101.7 90.1 3.5 23 74.1 2
Slide 48: 6 – Experienced management team and BoD
6 – Experienced management team and BoD BoD and management team in 2015 Board of Directors Michael Pieper Peter Spuhler Erwin Stoller This E. Schneider Dr. Jakob Baer Hans-Peter Schwald Dr. Dieter Spälti Member of the Board Member of the Board President Vice President Member of the Board Member of t
Slide 49: 6 – Changes as of April 2016
6 – Changes as of April 2016 Board of Directors (proposed) • Swiss national • Swiss national • Degree in Business Economics FH, • Master of Science in Electrical Engineering, certified Public Accountant ETH Zürich • As of October 2016: self-employed, • Since 2016: President Europe Region, profession
Slide 50: Share price
Share price Rieter registered shares of 5 CHF nominal value 31.12.2015 30.06.2015 31.12.2014 Bloomberg: RIEN SW; Thomson Reuters: RIEN.S Shares outstanding excl. own shares 4‘511‘075 4‘581‘585 4‘575‘484 (end of period) Average shares (of period) 4‘550‘650 4‘577‘017 4‘583‘909 Share price (end of peri