Slide 1: Results 2016
Results 2016 . Media . . and . investor . . . presentation, . . . . March . . 14,. 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . Joris . Gröflin, . . Group . CFO. . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and summary of 2016 Dr. Norbert Klapper 2. Financial results 2016 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Slide 3: Rieter – Highlights 2016
Rieter – Highlights 2016 • In a volatile market, Rieter kept market share at ~29% • “STEP UP” program on track: 1. Innovation: Commitment to R&D continued (5.1% of sales) 2. After sales: Increase in order intake and investments in future growth 3. Profitability: − EBIT at 6% of sales, in second half
Slide 4: Rieter position
Rieter position Market shares in 2016 held at ~29% in a challenging market environment. Value (in million CHF) Spindle equivalents (in million) -8% 3 950 3 819 3 610 3’508 3’240 14.7 -5% 13.6 13.8 11.4 10.8 25% 26% 30% 30% ~29% 10% 12% 17% 16% ~17% 2012 2013 2014 2015 2016e 2012 2013 2014 2015 2016e
Slide 5: Sales development by region
Sales development by region Growing sales in China and India CHF million • In the other Asian countries, sales declined by 1.100 12%, but remained at a good level of CHF 286.3 1’037 million 1.000 60 945 27 Europe • Significant increase in China by 33% to CHF 186.5 900 41 43 Africa million and in Ind
Slide 6: Innovative solutions
Innovative solutions R&D efforts at 5% of sales Rieter at ITMA Shanghai 2016 R&D expenses (CHF million / in % of sales) 46.3 46.6 48.0 45.0 RSB-D 50 draw frame 42.7 4.8% 4.3% 4.5% 5.1% 4.0% 2012 2013 2014 2015 2016 R&D expenses R&D expenses in % of sales Results 2016, Media and investor presentation
Slide 7: After Sales Excellence
After Sales Excellence Progress made in parts and after sales services Sales (CHF million) Growth target and main growth drivers: • Growth target against 2014: >30% till 2018 >+30% >166 • In 2016, growth through parts and after sales services compensated sales decrease 140 142 >+24 of installation s
Slide 8: Profitability improvement
Profitability improvement Progress in cost reduction Winterthur Ingolstadt • Announced in October 2015 • Concept announced February 1, 2017 • Sheet metal and machining operations stopped, focus on • Stop production, centralize parts assembly and R&D logistics and focus on R&D • Savings CHF 15 to 20
Slide 9: Winterthur site development
Winterthur site development Planning process started • Rieter intends to create a modern location in Winterthur on approximately 30 000 square meters: • Customer center • Product and technology center • Assembly • Administration • Planning process is under way • In a later phase, work will begin on
Slide 10: Agenda
Agenda 1. Introduction and summary of 2016 Dr. Norbert Klapper 2. Financial results 2016 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2016, Media and investor presentation, March 14, 2017 10
Slide 11: Financial highlights 2016
Financial highlights 2016 Increase in free cash flow and net liquidity – higher dividend CHF million, except dividend Orders 905.2 +13% Strong HY1, growth driven by Machines & Systems received Sales 945.0 -9% Stronger second semester 10.1% Stronger second semester – first benefits from EBITDA 95.8 m
Slide 12: Financial key figures
Financial key figures Stronger profitability and cash flows in second half year CHF million FY 2016 HY2 2016 HY1 2016 FY 2015 Order Intake 905.2 394.5 510.7 801.6 Sales 945.0 508.1 436.9 1 036.8 EBITDA 95.8 61.4 34.4 115.9 EBITDA margin (of sales) 10.1% 12.1% 7.9% 11.2% EBIT 56.5 40.8 15.7 73.1 EBIT
Slide 13: Orders by business group
Orders by business group Increase of orders in 2016 by 13% CHF million • Order intake amounted to CHF 905.2 million (2015: CHF 801.6 million) 1.100 +13% • Strong demand in the first half year (CHF 510.7 1.000 905 million) and mixed dynamics in the individual 900 countries and product categories in t
Slide 14: Sales by business group
Sales by business group Sales at CHF 945 million in 2016 following a stronger second half year CHF million • Machines & Systems with CHF 603.4 million sales: -9% 1.100 -14% (-13% in local currencies) compared to 1 037 CHF 702.3 million sales in 2015 1.000 945 • After Sales with CHF 141.6 million sal
Slide 15: Operating result (EBIT)
Operating result (EBIT) Strong contribution of Components and After Sales Business Groups In % of 7.0% 6.0% • Profitability development stems from strong EBIT sales profitability of CHF million • Components (12.9% of total sales) 90 • After Sales (18.0% of sales) 80 73 • Machines & Systems EBIT (0.6
Slide 16: Sales / cost by currency (in %)
Sales / cost by currency (in %) Rieter reduced CHF cost base further in 2016 Sales in • Swiss franc exposure further reduced CHF million against 2015 1 061 1 153 1 037 945 53% • Reduction in 2016 due to streamlining of production at the location in Winterthur and reduction of the purchasing volume 4
Slide 17: Changes in workforce
Changes in workforce Slight reduction of workforce Temporaries • Reduction of permanent workforce took in % 19.6% 11.3% 11.1% place mainly in Switzerland, partially FTE1 compensated by a build-up in China and Turkey 7000 6 225 -1% 6000 5 727 5 649 1221 650 627 5000 4000 3000 5 004 5 077 5 022 2000 1
Slide 18: Net profit and RONA
Net profit and RONA Net profit margin at 4.5% In % of sales 4.8% 4.5% • Financial result is with CHF -3.1 million better than previous year (CHF -7.9 million) CHF million -14% • Tax rate declined to 21% (previous year 24%) 50 50 • Earnings per share decreased to CHF 9.39 45 43 • Board of Directors p
Slide 19: RONA
RONA Return on net assets (RONA) of 8.5% slightly below cost of capital CHF million 31/12/2016 31/12/2015 2016 Change Non-current assets 344.3 370.1 -25.8 Inventories and receivables 281.2 297.3 -16.1 Liquid funds 372.6 334.0 +38.6 Total assets 998.1 1 001.4 -3.3 Non-current liabilities (excl. debt)
Slide 20: Balance sheet
Balance sheet Improvement of equity ratio and net liquidity • Net working capital reduced to CHF 31/12/ 30/06/ 31/12/ CHF million / % -14.6 million 2016 2016 2015 • Net liquidity increased to CHF 263.5 Total assets 998.1 987.1 1 001.4 million mainly impacted by free cash flow Non-current assets 344.
Slide 21: Net working capital
Net working capital Strong decrease of net working capital to CHF -14.6 million Positive impacts on net working capital 31/12/ 30/06/ 31/12/ thanks to CHF million 2016 2016 2015 • substantially lower inventories Inventories 163.2 210.7 191.5 • trade receivable management • higher advance payments Tr
Slide 22: Inventories: Development 2014 – 2016
Inventories: Development 2014 – 2016 Continued inventory reduction by ~90 million CHF since 2014 CHF million 700 631 -90 600 554 522 508 500 483 437 400 300 265 253 208 192 208 200 163 100 0 HY1 2014 HY2 2014 HY1 2015 HY2 2015 HY1 2016 HY2 2016 Sales Inventories Results 2016, Media and investor pres
Slide 23: Capital expenditures / depreciation & amortization
Capital expenditures / depreciation & amortization Capital expenditures below the level of depreciation / amortization CHF million Capital expenditures Depreciation & amortization 60 60 50 50 -8% 43 39 40 -2% 40 32 31 19 14 30 30 11 10 1 1 20 1 1 20 10 10 16 15 10 10 13 14 4 5 0 0 2015 2016 2015 201
Slide 24: Free cash flow
Free cash flow Strong free cash flow of CHF 76.3 million Free cash flow prior divestment positively CHF million 2016 2015 impacted mainly by change of Networking Net profit 42.7 49.8 Capital Interest expense (net) 2.6 5.9 Tax expense 11.1 15.4 Depreciation and amortization 39.3 42.8 +/- Non-cash ite
Slide 25: Total assets / equity / net liquidity
Total assets / equity / net liquidity Continued strong generation of free cash flows since 2012 Total assets in CHF million / Equity in % of total assets Net liquidity in CHF million cash and cash equiv. in CHF million +1.9 +51.1 1 209 46.2 263.5 0% 44.3 1 114 1 070 1 001 998 212.4 35.1 35.0 36.5 17
Slide 26: Agenda
Agenda 1. Introduction and summary of 2016 Dr. Norbert Klapper 2. Financial results 2016 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2016, Media and investor presentation, March 14, 2017 26
Slide 27: 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 28: Outlook
Outlook • In the first two months, demand for components and spare parts was stable. The order intake for new machines remained at a low level. Rieter expects sales and earnings in the first half-year to be on a par with those of the previous year, and a stronger performance in the second half-year.
Slide 29: 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 asse
Slide 30: Changes in Group Executive Committee and Board of Directors
Changes in Group Executive Committee and Board of Directors Board of Directors • Erwin Stoller has decided not to stand as a candidate for re-election as Chairman and member of the Board of Directors. • The Board of Directors of Rieter Holding Ltd. proposes to elect - Bernhard Jucker as Chairman of
Slide 31: 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 32: Appendix
Appendix Results 2016, Media and investor presentation, March 14, 2017 32
Slide 33: Values and principles
Values and principles Results 2016, Media and investor presentation, March 14, 2017 33
Slide 34: Group Executive Committee
Group Executive Committee Dr. Norbert Klapper Werner Strasser Jan Siebert Carsten Liske Joris Gröflin Thomas Anwander Chief Executive Officer Head Business Group Head Business Group Head Business Group Chief Financial Officer General Secretary Components Machines & Systems After Sales and General Co
Slide 35: Board of Directors
Board of Directors Michael Pieper Peter Spuhler Erwin Stoller This E. Schneider Hans-Peter Schwald Bernhard Jucker Roger Baillod Member of the Member of the Chairman of the Vice Chairman of the Member of the Member of the Member of the Board of Directors Board of Directors Board of Directors Board o
Slide 36: Key data per share
Key data per share Rieter registered shares of CHF 5 nominal value Bloomberg: RIEN SW; Thompson Reuters: RIEN.S 31/12/2016 30/06/2016 31/12/2015 Shares outstanding excl. own shares 4 515 015 4 518 063 4 511 075 (end of period) Average shares (of period) 4 515 861 4 515 519 4 550 650 Share price (end
Slide 37: Profitability improvement mid-term: 14% RONA
Profitability improvement mid-term: 14% RONA Second semester of 2016 with RONA of 12.2% • Reduction of net working capital Net profit by half-year • Sale of non-core assets (before interest cost / CHF million) • Investments below D&A level 60 50 40 HY2 2016 12.2% 30 • Profitability initiatives 20 •