Rieter Holding Ag · SIX:RIEN
Rieter — Investor Day (October 2024)
36 slides from Rieter's investor day presentation, Oct 28, 2024
Slide 1: Rieter Capital Market Day 2024
Rieter Capital Market Day 2024 Thriving on Textile Megatrends Thomas Oetterli, Chief Executive Officer
Slide 2: 1 Our Markets
1 Our Markets Capital Market Day . October 2024 Page 2
Slide 3: Textile Megatrends
Textile Megatrends Five megatrends that drive our industry Decoupling of Sustainability Labor shortage Digitization Man-made fibers worldwide economy Rise of recycling Smart and connected Product power hubs production systems Technical textiles Energy reduction Need for automation Redundancy in know
Slide 4: Global Textile Landscape and Value Chain
Global Textile Landscape and Value Chain The global installed base amounts to 272 million spindle equivalents, the majority of which are located in Asia Raw material sourcing Yarn production Fabric production Finishing Tailoring Retail and trade 108mt Other 73m (27%) Staple fibers Cotton Viscose 52m
Slide 5: Global Fiber Market Growth
Global Fiber Market Growth Growth comes from man-made fibers as well as viscose and polyester within the staple fiber market Market +3% 136 +5% 8 108 +2% 22 7 18 +1% 28 78 Others Staple fibers 3 24 Viscose 14 Polyester Cotton 25 Filament +4% 74 CAGR 56 31 2010 2023 2030 Capital Market Day . October
Slide 6: Market Segmentation
Market Segmentation Based on existing product strengths, Rieter is carefully choosing lucrative segments of the market Economy Segment Standard Segment Premium Segment $ Attack by increasing market share Defend leading position Opportunistic approach including MMF/MMF applications and including cott
Slide 7: Market and Technology Leadership
Market and Technology Leadership Rieter is the dominant player in a large market and more than double the size of its closest competitors CHF 3.9 billion (2023) CHF 1.8 billion (2023) #2 #2 #3 Others #3 #4 #4 #5 #5 #6 #6 #7 CHF 5.7 #7 #8 billion #8 #8 #9 #9 #7 #2 #10 #10 #11 #11 #6 #12 #12 #13 #5 #3
Slide 8: 2 Our USP
2 Our USP Capital Market Day . October 2024 Page 8
Slide 9: Rieter at a Glance
Rieter at a Glance The world’s leading supplier of systems for short-staple fiber spinning with nearly 230 years of history Founded Spartanburg 1795 Countries São Paulo 14 Enschede Ústí nad Orlicí Stembert Boskovice Locations Münster Hammelburg Winterthur (HQ) 23 Heinsberg Pfäffikon Süssen Rapperswi
Slide 10: Our Business Model: From Fiber to Yarn
Our Business Model: From Fiber to Yarn Rieter covers the complete process from fiber preparation to all four end-spinning technologies Machines & Systems Fiber Fiber preparation Spinning preparation End spinning & winding Yarn Cotton Ring spinning Draw frames Winding Blowroom Man-made Compact spinni
Slide 11: System Approach to Satisfy Every Customer Requirement
System Approach to Satisfy Every Customer Requirement Rieter is the only player with a complete offering that can act as a system supplier Draw Roving Ring/Compact Rotor Rotor Air-jet Blowroom Cards Combing systems Winding frames frames spinning spinning (Semi) spinning (Auto) spinning Competitor A
Slide 12: 3 Our Strategic Direction
3 Our Strategic Direction Capital Market Day . October 2024 Page 12
Slide 13: Rieter Makes the Difference
Rieter Makes the Difference What we aspire to achieve… Vision Rieter in every spinning mill What we do… Mission Rieter provides leading technology for fiber processing Where we win… Technology Customer Automation Innovative Solutions Financing Leadership Service and Digitization How we win… Sales Co
Slide 14: Where We Win: Innovative Solutions
Where We Win: Innovative Solutions Where-to-win areas demonstrate our enablers to create added value for our customers and ensure differentiation Technology leadership 1 Breakout Customer service 2 Breakout ‒ Best know-how to convert fibers into yarn ‒ Well-established after-sales network, close to
Slide 15: Value Proposition
Value Proposition Rieter’s leading technology bolsters profitability in spinning mills via lower conversion costs and higher yarn prices Conventional or mixed system Higher yarn quality Higher yarn price Spinner’s margin Spinner’s margin on Rieter System Customer value Price of service and maintenan
Slide 16: Customer Typology and Concentration
Customer Typology and Concentration Fragmented customer base of around 3 000 accounts dominated by small and medium sized family businesses Raw material Yarn production Fabric production Finishing Tailoring Retail and trade sourcing Pure plays Semi-integrated players Fully integrated players Ownersh
Slide 17: Strategic Priorities in the Business Group Machines & Systems
Strategic Priorities in the Business Group Machines & Systems Priorities defined for market and application Defend the leading market Cotton/blends application position Attack business in Man-Made Fibers (MMF) MMF/blends application Best Cost Country (BCC), Cost competitiveness more than 90% of thir
Slide 18: Strategic Priorities in the Business Group Components
Strategic Priorities in the Business Group Components Ensure state-of-the-art Technology leadership technology components Increase market share Filaments via components Pursue selective growth Bolt-on acquisitions opportunities via M&A ’96 ’01 ’05 ’17’21’22 Capital Market Day . October 2024 Page 18
Slide 19: Strategic Priorities in the Business Group After Sales
Strategic Priorities in the Business Group After Sales A growing installed base in the world’s largest markets unlocks significant growth potential for After Sales India China Leverage growing % installed base 63m % Potential realized 96m RoW Ring Compact Introduce Service Level Asian countries Roto
Slide 20: Sustainability
Sustainability Rieter is set to become carbon neutral by 2040 Near-term 2030 Long-term 2040 Reporting ‒ Scope 1 and Scope 2 ‒ Scope 3 ‒ According to different legal ‒ Renewable Energy ‒ SBTi1 and Roadmap to Net Zero frameworks (CH and EU) 1Science Based Targets initiative Capital Market Day . Octobe
Slide 21: What's Ahead Today
What’s Ahead Today Deep-dive sessions on innovative solutions Machines & Systems Components After Sales Technology leadership 1 Breakout Customer service 2 Breakout Automation and digitization 3 Breakout Capital Market Day . October 2024 Page 21
Slide 22: Financial Ambition and Key Figures
Rieter Capital Market Day 2024 Financial Ambition and Key Figures Oliver Streuli, Chief Financial Officer
Slide 23: Weak Financial Performance in the Past
Weak Financial Performance in the Past We were not successfully delivering profitability – neither in a high nor in a mid nor in a low market scenario 1’600 1’511 80 1’419 1’400 173 70 187 1’200 1’153 304 60 1’037 1’075 266 128 1’000 945 966 144 969 50 172 140 142 146 147 800 195 262 760 40 200 230
Slide 24: Return on Net Operating Assets
Return on Net Operating Assets > Cost of Capital… … is the golden rule. What successful companies aim at when talking about value creation ‒ Operational excellence Increase profit ‒ Agile structures ‒ NWC optimization Reduce ‒ Disciplined capex invested capital Economic value added ‒ Strict M&A hurd
Slide 25: Grow After Sales and Components Sales to Balance Volatility
Grow After Sales and Components Sales to Balance Volatility After Sales and Components sales are significantly less volatile than Machine & Systems sales Machines & Systems Components After Sales 30% relative standard deviation 15% relative standard deviation 10% relative standard deviation 2014 201
Slide 26: Grow After Sales and Components Business for a Better Mix
Grow After Sales and Components Business for a Better Mix Successful cycle management along with sales excellence provide the base for a more balanced business mix Last 10 years Over-the-cycle growth ambition excl. M&A 1’600 1’361 1’300 700 40% 410 30% 998 1’000 600 45% 367 35% 500 667 50% 324 50% 9
Slide 27: Adjusted and Flexible Cost Base to Protect Profits in Any Scenario
Adjusted and Flexible Cost Base to Protect Profits in Any Scenario Adjusting our base capacity to generate a profit in any market scenario and flexing in an upcycle is key Challenge Response COGS COGS (fixed) (fixed) COGS COGS COGS (var) (var) COGS (fixed) Sales Sales (fixed) COGS R&D Sales Sales R&
Slide 28: Continuous Cost Leadership (CCL)
Continuous Cost Leadership (CCL) CCL is a process of continuously working on cost improvements in all chains of supply and fulfillment Sales Cost of Goods Manufactured (COGM) deductions Key potentials Other ‒ Material costs COGM ‒ Supplier base Plants COGM ‒ Design-to-cost Variable production costs
Slide 29: Achieve a Positive Result in Low Market Scenario
Achieve a Positive Result in Low Market Scenario EBIT margin ambition in relation to market scenarios CHF million ~12% HIGH at ~1 600 sales ~8% MID ~8% at ~1 300 sales ~4% ~4% LOW at ~1 000 sales 0% Capital Market Day . October 2024 Page 29
Slide 30: Financial Ambition – Profitability
Financial Ambition – Profitability A more balanced business mix translates into improved and less volatile operating profitability Last 10 years Over-the-cycle ambition 1’600 00 250 1’600 250 1’361 ~12% 00 200 1’400 1’300 200 00 150 1’200 150 1’000 ~8% 998 00 100 1’000 ~8% 100 ~4% 00 50 800 50 667 ~
Slide 31: Attractive Capital Return Perspective
Attractive Capital Return Perspective Asset light business model enables returns well above capital costs RoNoA by market scenario H1 2024 Net Operating Assets Trade receivables 103.3m 77.4m Trade payables 91.1m Advance payments Return on Net Operating Assets 30% Inventories 271.3m Net debt 20% 585.
Slide 32: Selective approach to M&A
Selective approach to M&A Potential acquisition candidates are monitored continuously as M&A is considered a growth and profitability driver Criteria and characteristics Components: Fragmentation provides opportunities Strategic Expand geographical footprint ‒ Strategic alliances with best-in- Compl
Slide 33: Summary – Over-the-cycle and Mid-term Financial Ambition
Summary – Over-the-cycle and Mid-term Financial Ambition Sales EBIT margin 1’511 1’419 8% 1’300 5% 6% 2% 969 4% 760 573 -2% 2019 2020 2021 2022 2023 Mid- -14% term 2019 2020 2021 2022 2023 Mid- term Payout ratio Equity ratio 57% 56% 48% 40% 36% >35% 39% 28% 29% 23% 18% 0% 2019 2020 2021 2022 2023 Mi
Slide 34: Financial Calendar
Financial Calendar ‒ Publication of sales 2024 January 29, 2025 ‒ Deadline for proposals regarding the agenda of the Annual General Meeting February 28, 2025 ‒ Results press conference 2025 March 13, 2025 ‒ Annual General Meeting 2025 April 24, 2025 ‒ Semi-Annual Report 2025 July 18, 2025 ‒ Investor
Slide 35: Q&A
Q&A Capital Market Day . October 2024 Page 35
Slide 36: 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