Rieter Holding Ag · SIX:RIEN
Rieter — Helvea Conference January 2014
45 slides from Rieter's conference presentation, January 2014
Slide 1: Rieter Holding Investor Presentation
Rieter Holding Investor Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Helvea Conference – January 2014 . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Rieter’s market: Short – staple 2. Rieter’s position 3. Rieter’s investment program 2012/2013 4. Half-year results 2013 . . . . . 5. Market development and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Present
Slide 3: Rieter's market: Short staple spinning machines and components
Rieter’s market: Short staple spinning machines and components Rieter’s customers spin any fiber with a length from 25 to 45 mm to yarn • Length: 25 – 45 mm Fibers • Types: Man-made (synthetic and cellulosics) and natural (cotton) • Consumption: 39.9 million tons (2011) • Consumption growth: ~2.3% p
Slide 4: Rieter's market: Fiber and yarn price
Rieter’s market: Fiber and yarn price Different yarn products exist – Rieter machines spin all short staple yarns Selection of short staple yarn prices, cost and margins in USD/kg (estimated 2013 indexed) 1,00 Margin 0,87 Waste costs Labour costs 0,62 0,58 Energy costs 0,50 Running costs 0,44 0,39 0
Slide 5: Rieter's market: Impact of macro trends on growth
Rieter’s market: Impact of macro trends on growth Macro trends will have a positive impact on Rieter’s position Future growth drivers Growing fiber demand calls Trend to increasing quality, Replacement of installed for additional capacity fineness and automation capacity beyond productivity gains •
Slide 6: Rieter's market: Growth and investment cycle triggers
Rieter’s market: Growth and investment cycle triggers In a cyclical market, India and China will continue to drive growth Spindle equivalents (shipments) - in million Investment cycle triggers: 20 18.2 18.5 • Positive spinning mill China 16.9 16.9 margins (conversion 15 India 15.1 15.2 14.2 between
Slide 7: Agenda
Agenda 1. Rieter’s market: Short – staple 2. Rieter’s position 3. Rieter’s investment program 2012/2013 4. Half-year results 2013 . . . . . 5. Market development and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Present
Slide 8: Rieter – Broadest global systems supplier
Rieter – Broadest global systems supplier Global supplier… …of spinning machinery and components Europe Asia Americas [Pic] [Pic] Legend Sales Service R&D Production …covering preparation and Full-liner for all fibre types… all four spinning technologies From raw material… …to yarn Ring conventional
Slide 9: Global supplier: Rieter's locations worldwide
Global supplier: Rieter’s locations worldwide Rieter is present in all relevant textile producing countries Uzbekistan Switzerland China Germany Czech Rep. Netherlands USA Belgium France Taiwan Turkey India Brazil Sales contract partner Sales office Service R&D Manufacturing Agents 2014 January – Ri
Slide 10: Global supplier: Rieter's markets and sales
Global supplier: Rieter’s markets and sales Installed capacities in China represents largest potential to increase sales 2011, world-wide installed capacity HY1 2013, Rieter sales distribution in % (spindle equivalents) in % Africa Europe Africa Europe Americas 2% 5% 7% 8% 7% Americas 11% Rest of As
Slide 11: Machinery and components: Sales by product type
Machinery and components: Sales by product type Around 30% of sales is less cyclical parts & service and PTC business Distribution of sales (in million CHF) 1.061 865 889 734 522 551 605 478 SYS Machines 300 Only for 327 123 128 Rieter SYS Parts & 122 machines Service 94 Also for 191 199 66 PTC 128
Slide 12: Full-liner: Spinning technology for all fiber types
Full-liner: Spinning technology for all fiber types Rieter’s products can be adapted to spin all fiber types Example Rotor R 60 – component options for all fiber types Cotton Synthetic / blends Cellulosics (Viscose) 2014 January – Rieter Holding Investor Presentation – Helvea Conference 12
Slide 13: Full-liner: Rieter offers full systems
Full-liner: Rieter offers full systems Spinning mills are a system of pre and end spinning machines Exemplary spinning mill lay-out: Compact ring spinning system Blowroom Comber Card Drawframe Flyer Compact ring spin 2014 January – Rieter Holding Investor Presentation – Helvea Conference 13
Slide 14: Agenda
Agenda 1. Rieter’s market: Short – staple 2. Rieter’s position 3. Rieter’s investment program 2012/2013 4. Half-year results 2013 . . . . . 5. Market development and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Present
Slide 15: Rieter – Investment program 2012 / 2013
Rieter – Investment program 2012 / 2013 Investment program near completion – delay in process improvements 2012 2013 2014 Expansion in Asia • Inauguration of first • Completion of plant II stage of second plant in in Changzhou Changzhou (China) • Ramp-up of second • Full additional • Construction of
Slide 16: Expansion in Asia: Addressing growth potential
Expansion in Asia: Addressing growth potential Increase in locally available product portfolio to address growth potential Preparation Ring/ Rotor Rotor Roving Air-Jet Comfort (semi) (Auto) Blowroom Card Drawframe Comber Available technical capacity 2011 2014 Europe India China 2014 January – Rieter
Slide 17: Expansion in Asia: Employees
Expansion in Asia: Employees Focus on flexibility also in China and India Distribution of employees (FTE) ROW India China 3.683 3.832 3.318 3.324 1.759 1.406 1.349 1.195 825 981 1.002 683 Fix Temporaries 2010 2011 2012 HY1 2010 2011 2012 HY1 2010 2011 2012 HY1 2013 2013 2013 2014 January – Rieter Ho
Slide 18: Innovation: Airjet progress
Innovation: Airjet progress Market introduction progresses along with continued system improvement J 10 J 20 J 20 (V2) Year 2010 2011 2013 Application • Cellulosics • Cellulosics • Combed cotton range • Blends • Blends • Cellulosics • Polyester blends Machine length 100 spinning units 120 spinning u
Slide 19: Summary
Summary Clear strengthening of position thanks to investment program Position 2011 Position 2013 Global presence: • Global sales and service • Strong set-up also in CN sales / service / production with production in EU, small • Increased set-up in IN set-up in IN and CN • Capacities increased All fo
Slide 20: Agenda
Agenda 1. Rieter’s market: Short – staple 2. Rieter’s position 3. Rieter’s investment program 2012/2013 4. Half-year results 2013 . . . . . 5. Market development and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Present
Slide 21: Rieter – Financial key figures
Rieter – Financial key figures Order intake upswing in first half year 2013 thanks to strong market position CHF million HY1 2013 HY2 2012 HY1 2012 FY 2012 Orders received (1) 711.4 435.6 404.1 839.7 Sales 478.1 401.2 487.3 888.5 EBITDA 34.3 18.3 47.6 65.9 EBIT (2) 17.1 1.2 31.5 32.7 EBIT margin (of
Slide 22: Balance sheet
Balance sheet Net liquidity at 63.2 million CHF and equity ratio at 34% • Net liquidity of 63.2 million CHF mainly 30.06. 31.12. 30.06. impacted by negative free cash flow of CHF million 2013 2012 2012 -12.1 million CHF and dividend of -11.6 million CHF paid out in April 2013 Total assets 1092.7 107
Slide 23: Agenda
Agenda 1. Rieter’s market: Short – staple 2. Rieter’s position 3. Rieter’s investment program 2012/2013 4. Half-year results 2013 . . . . . 5. Market development and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Present
Slide 24: Market development
Market development Market continues on strong level • Market conditions are still favourable, although with wide regional diversification. • Demand in Turkey and China weakened compared with the strong order intake in the first half year, and in India improved only slightly. Thanks to strong market
Slide 25: Outlook 2013
Outlook 2013 • With broadly based business worldwide, Rieter still expects a good but slightly declining demand for textile machinery and components during the last few months of 2013. Demand depends among other factors on the development of yarn and raw materials prices, currency exchange rates, fi
Slide 26: Guidance over the cycle
Guidance over the cycle Over the cycle Sales Sales growth of > 5% > 9% over the cycle, EBIT margin peak years > 12% > 6 % over the cycle, Net result peak years > 8% RONA peak years > 14% Capex 4 – 5 % of sales Target pay-out ratio of Dividend policy approx. 30% of net result 2014 January – Rieter Ho
Slide 27: Agenda 2013 / 2014
Agenda 2013 / 2014 Publication of sales figures for the 2013 financial year: February 4, 2014 Results media conference and presentation of the 2013 financial statements: March 18, 2014 Annual General Meeting: April 9, 2014 Contact: Investor relations: Media: Joris Gröflin Cornelia Schreier Chief Fin
Slide 28: Values and principles
Values and principles 2014 January – Rieter Holding Investor Presentation – Helvea Conference 28
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: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 January – Rieter Holding Investor Presentation – Helvea Conference 30
Slide 31: Rieter – Strategic intent
Rieter – Strategic intent Strategic intent Organic growth / growth by acquisitions • Stay No. 1 in the import segment, become at least No. 2 in the local segment • Strengthen position in China and India • Close product gaps through innovation and external opportunities Innovation • Improve yarn qual
Slide 32: Strategy implementation: Maintain break-even focus
Strategy implementation: Maintain break-even focus Measures to increase profitability have been initiated • Reduce break-even after conclusion of investment program 2012 / 2013: • Reduction of global workforce by 5% over the next 24 months predominantly in Switzerland through • Natural fluctuation •
Slide 33: Rieter – At a glance
Rieter – At a glance Rieter is a leading supplier of short staple textile machinery and components • Rieter – an industrial group based in Winterthur, CH, operating on a global scale • Formed in 1795, and a leading supplier of short-staple spinning machinery and technology components • Widest produc
Slide 34: Orders by business group
Orders by business group Significant increase in order intake with largest share from Turkey • Continued market recovery allows both Business Groups to profit from strong CHF million market position +76% • Turkey with largest share of order intake 800 711 • Growth in China thanks to localized 700 67
Slide 35: Sales development by region
Sales development by region Continued growth in China in first semester 2013 • Sales to China grows in absolute and -9% +31% -31% +4% -5% -22% +103% relative terms (to 24% vs. 18% HY1 CHF million 2012) 139 • Lower sales to main market regions 140 126 Turkey and other Asian countries reflect 120 116
Slide 36: Global supplier: Rieter sales by country
Global supplier: Rieter sales by country Share of sales to Asia and China is increasing Distribution of sales (in million CHF) 1.061 870 256 889 229 224 151 Other Asia 103 522 209 193 China 478 144 117 Turkey 126 175 168 India 75 146 35 116 Americas 67 96 128 124 63 Europe 104 91 54 119 124 89 52 Af
Slide 37: Changes in workforce
Changes in workforce Continued reduction of fix workforce Temporaries 14.6% 17.2% 18.1% • In March, 2013, announced global in % workforce reduction of 5% over the next FTE1) 24 months is ongoing (mainly in Switzerland) 7.000 • Higher sales volume versus second 6.000 5.705 5.675 semester 2012 mainly
Slide 38: Net working capital
Net working capital Demand drives increase of net working capital to 74.9 million CHF • Increase in order intake leads to higher 30.06. 31.12. 30.06. inventories CHF million 2013 2012 2012 • Seasonal increase of trade receivables Inventories 248.4 229.3 208.7 compared to year-end 2012 • Advance paym
Slide 39: Free cash flow
Free cash flow Free cash flow of –12.1 million CHF impacted by high investments HY1 HY1 • Free Cash Flow is driven by low CHF million earnings, continued high investments 2013 2012 and increase in net working capital Net profit 5.0 21.5 • High capital expenditures are mainly driven by investment pro
Slide 40: Sales by Business Group
Sales by Business Group Sales with increase of 19% versus second semester 2012 • Sales increase by both Business Groups compared to second semester: CHF million • SYS: +20% 800 • PTC: +15% / +9% segment sales 700 • PTC with sales level of HY1 2012 thanks to slight recovery in demand 600 +19% from Ch
Slide 41: Operating result (EBIT)
Operating result (EBIT) EBIT improvement against second semester 2012 In % of 6.5% 0.3% 3.6% • Increasing sales volume against second sales semester 2012 leads to profitability CHF million improvement 60 • Delivery of in 2012 concluded orders with lower margins in the machine business (SYS) with neg
Slide 42: Net profit
Net profit Net profit margin at 1.0% of sales – EPS of 1.51 CHF in HY1 2013 In % of 4.4% 1.0% 1.0% • Net profit including 0.3 million CHF sales extraordinary gain on sale of CHF million investments (HY1 2012: 4.4 million CHF, HY2 2012: 13.2 million CHF) 40 • Financial result of –7.4 million CHF 35 m
Slide 43: Innovation: Continued technology leadership
Innovation: Continued technology leadership Rieter continues to drive innovation in both pre and end spinning Varioline RSB D 45 C 70 E 80 ECOrized Q 10 J 20 R 60 Clip-on Opening Roller SB-D 22 R 35 K 46 2011 2012 2013 Hipro Metallic Primacomb TRITON Ri-Q-Comb ProFil CleanB Wire 9030 Crocodoff EliTe
Slide 44: Innovation: PTC – Example LENA
Innovation: PTC – Example LENA Premium Textile Components with technological edge Energy (W) 16 Standard spindle 14 Customer Benefits: 12 Chinese spindle • Low energy consumption 10 • Higher production speed LENA 8 • Extended life time 6 • Low noise level 4 2 Spindle speed 10 11 12 13 14 15 16 17 18
Slide 45: Key investment highlights of Rieter
Key investment highlights of Rieter Long-term growth industry Experienced Management team Broadest global and Board of systems supplier Directors Rieter Efficient cycle Leading market management and positions value creation Technology and innovation leadership 2014 January – Rieter Holding Investor