Slide 1: Results 2014
Results 2014 . . . /. investor Media . . presentation, . . . . 18th. .March . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . . . . . . Joris Gröflin, Group CFO. . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and summary of 2014 Dr. Norbert Klapper 2. Financial results 2014 Joris Gröflin 3. Strategic focus & outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2014 2
Slide 3: 2014: Key messages today
2014: Key messages today “Rieter accomplished its execution agenda in 2014 and took advantage from the excellent market position and the extended capacities. Rieter’s progress in profitability and in leveraging the global footprint are a strong base to benefit from future opportunities and master ch
Slide 4: Rieter – Highlights 2014
Rieter – Highlights 2014 • Execution agenda – accomplished • Record spindle shipments • Market share increased • Profits and Free Cash Flow followed • Attractive dividend proposed • Strategic focus reviewed, first steps implemented • Profitability improvement measures launched • Second half year: 63
Slide 5: Rieter position
Rieter position Increase of spindle equivalent shipments of 27% against 2013 Rieter spindle equivalents shipments Success drivers (in million) • System provider: Shipment of +27% substantial full ring and rotor spinning mill equipment 2.3 • Strong sales and distribution network across the globe 1.8
Slide 6: Rieter position
Rieter position Increase in market share thanks to strong position and capacity increase Value (in million CHF) Spindle equivalents (in million) 4 220 3 750- 18.4 3 990 3 950 3 950 17.1 3 610 14.7 13.6 ~13.7 22% 25% 25% 26% ~29-31% 7% 9% 10% 12% ~16-17% 2010 2011 2012 2013 20141) 2010 2011 2012 2013
Slide 7: 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 8: Strategic focus – profitable growth
Strategic focus – profitable growth Progress made towards mid-term targets – improvement ongoing Sales and EBIT (in million CHF) Improvement measures 5.8% 7.3% ~10% Focus area Content ~1 300 Delight your Improve customer customer satisfaction 1 153 +147 1 035 Enhance strategic Price pricing Margin U
Slide 9: Rieter’s Swiss franc challenge
Rieter’s Swiss franc challenge Additional measures initiated to reduce negative impact of strong CHF • Swiss franc exposure reduced since Sales in 2011 CHF million 1 061 1 153 • Investments in China and India as well 53% as Czech Republic allow for greater flexibility 43% 40% • Rieter expects increa
Slide 10: Agenda
Agenda 1. Introduction and summary of 2014 Dr. Norbert Klapper 2. Financial results 2014 Joris Gröflin 3. Strategic focus & outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2014 10
Slide 11: Rieter – Financial highlights 2014
Rieter – Financial highlights 2014 Higher sales and profitability – dividend of 4.50 CHF per share CHF million, except dividend Orders -9% 1 146.1 Strong HY1 received Sales +11% 1 153.4 Strong HY2 EBIT +41% 84.6 Strong HY2 Net profit +41% 52.9 Strong HY2 Investments -23% 42.2 Return to levels of dep
Slide 12: Rieter – Financial key figures
Rieter – Financial key figures Substantial improvement of profitability supported by higher sales CHF million FY 2014 HY2 2014 HY1 2014 FY 2013 Order Intake 1 146.1 490.6 655.5 1 259.4 Sales 1 153.4 631.3 522.1 1 035.3 EBITDA 125.4 77.0 48.4 95.2 EBITDA margin (of sales) 10.9% 12.2% 9.3% 9.2% EBIT 8
Slide 13: Orders by business group
Orders by business group Orders received of 1 146.1 million CHF at the level of sales • High levels of orders booked in various CHF million Asian countries, Turkey and the US 800 • Positive trend in India continued 711 • In China subdued demand 700 655 • Decline in second half of the year 600 548 ma
Slide 14: Sales by business group
Sales by business group Sales increased by 11% to 1 153.4 million CHF • Sales in the second half of the year CHF million were 21% higher than in the first six +21% months 700 631 • Business Group Spun Yarn Systems 600 with 981.0 million CHF sales (+ 14% vs. 557 522 2013) 500 478 • Business Group Pre
Slide 15: Sales development by region
Sales development by region Strong growth in Turkey and the US CHF • Global distribution of sales million • Turkey and the Americas outpace Asian 273 growth of other countries countries1) 259 +5% • Share of sales to China at 15% 264 (2013: 22%) – Chinese demand Turkey 199 +33% subdued Americas 200 •
Slide 16: Operating result (EBIT)
Operating result (EBIT) EBIT margin increased to 7.3% In % of • EBIT increased by 41% to 84.6 million CHF in 2014 sales 5.8% 7.3% CHF million • Higher profitability in HY2 of 8.8% of sales driven +41% by both BG 100 85 • Profitability development stems from • Higher sales (sales growth of 11%), disc
Slide 17: Net profit and RONA
Net profit and RONA Net profit margin increase to 4.6% thanks to better operating result In % of • Financial result is slightly lower than previous year sales 3.6% 4.6% which benefited from positive special factors CHF million (revaluation gain of 5.2 million CHF from minority +41% investors put opt
Slide 18: Changes in workforce
Changes in workforce Total workforce increased by 4% despite sales increase of 11% Temporaries • Higher sales volumes of 11% managed in % 17.2% 20.2% 19.6% with 4% more employees FTE1) • Higher output was achieved through +4% productivity increases resulting from 7000 operational excellence initiati
Slide 19: Balance sheet
Balance sheet Net liquidity increases to 171.7 million CHF and equity ratio to 37% • Net liquidity of 171.7 million CHF mainly 31.12. 30.06. 31.12. impacted by positive free cash flow of CHF million 2014 2014 2013 49.1 million CHF Total assets 1 209.4 1 100.2 1 114.0 • Dividend of 16.0 million CHF (
Slide 20: Net working capital
Net working capital Slight increase of net working capital to 24.6 million CHF Net working capital increases 9.9 million 31.12. 30.06. 31.12. CHF mainly due to CHF million 2014 2014 2013 • Higher inventories driven by higher Inventories 253.1 264.8 233.0 sales volumes • Lower advance payments from T
Slide 21: Capital expenditures / D&A
Capital expenditures / D&A Capital expenditures at depreciation / amortization level (3.7% of sales) CHF million Capital expenditures Depreciation & Amortization 90 90 81 80 80 70 19 70 -23% 60 55 60 +17% 50 10 50 42 41 40 40 35 12 33 10 30 63 30 13 15 20 45 20 30 31 10 10 18 22 0 0 2012 2013 2014 2
Slide 22: Free cash flow
Free cash flow Strong free cash flow of 49.1 million CHF • Free cash flow positively impacted by CHF million 2014 2013 higher profitability and lower capital Net profit 52.9 37.4 expenditure • Volume related increase of net working Interest expense (net) 10.7 14.0 capital reduces free cash flow by 1
Slide 23: RONA
RONA Return on net assets (RONA) of 10.5% above cost of capital CHF million 31.12.2014 31.12.2013 2014 Non-current assets 387.3 371.1 Inventories and receivables 376.5 373.2 Liquid funds 445.6 369.7 Total assets 1 209.4 1 114.0 Non-current liabilities (excl. debt) -141.7 -137.4 Current liabilities (
Slide 24: Agenda
Agenda 1. Introduction and summary of 2014 Dr. Norbert Klapper 2. Financial results 2014 Joris Gröflin 3. Strategic focus & outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2014 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: Strategic focus – innovative solutions
Strategic focus – innovative solutions Creating customer value through innovative solutions Spinning mill profitability impact Rieter innovation focus areas (in basis points) Improvement of yarn property Yarn price +5% ~500 (higher prices) Reduction of raw material cost Material cost -5% ~345 (Flexi
Slide 27: Strategic focus – after sales excellence
Strategic focus – after sales excellence Creating customer value through after sales excellence Distribution of sales (in million CHF) After sales growth potentials 1 153 Excellent after sales is a key differentiator in 1 061 1 035 the market 865 889 Growth potential for Rieter after sales busin
Slide 28: Strategic focus – after sales excellence
Strategic focus – after sales excellence New organization as of January 1, 2015 to reflect strategic focus 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 Presid
Slide 29: Strategic focus – profitability improvement
Strategic focus – profitability improvement Progress on profitability in half year 2, 2014 Sales and profitability development Profitability improvement measures: (in million CHF) Value-based pricing 631 557 Optimized utilization of existing capacity 538 523 522 487 478 Improvement of product
Slide 30: Outlook
Outlook • Rieter has closed the year 2014 with an order backlog of around 730 million CHF which demonstrates the global strength of the company and its brands. • Rieter's exposure to the Swiss Franc has decreased over the last years. Short term profitability improvement measures have been released t
Slide 31: Strategic focus – mid-term targets
Strategic focus – mid-term targets Sales Sales growth above market EBIT margin ~10% at sales of ~1.3 bn1) RONA2) ~14% Target pay-out ratio of about Dividend policy 30% of net profits 1) Targets assume growth in consumption of short-staple fibers of 2 – 3 % p.a., current (average 2014) exchange rates
Slide 32: 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 33: Values and principles
Values and principles Results 2014 33
Slide 34: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2014 34
Slide 35: Rieter – global presence
Rieter – global presence Results 2014 35
Slide 36: Market trends and growth
Market trends and growth Rieter will profit from market drivers and shifts Textile Mill Consumption (in million tons) Performance shift (in %) 2.5% 108 30% 37% 90 42% 44% 47% 76 ~60% 53 70% 63% 58% 56% 53% ~40% 2000 2010 2014 2020 2009 2010 2011 2012 2013 20141) Cotton Manmade staple fibres xx% CAGR
Slide 37: Market trends and growth
Market trends and growth Market for short staple spinning equipment is assumed to grow in value Value (in million CHF) Spindle equivalents (in million) +1.9% +0.4% 3 750- 4 330 14.7 15.0 3 950 3 950 ~13.7 2013 20141) Mid-term 2013 20141) Mid-term estimate estimate w/o Winder Endspinning machines onl
Slide 38: Dividend proposal
Dividend proposal Dividend of 4.50 CHF proposed Dividend Pay-out ratio Reserves from capital (in CHF per share) (in % of net profit) contributions (in million CHF) 6.0 41 129.4 39 39 4.5 101.7 90.1 3.5 23 74.1* 2.5 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 (proposal) (proposal) * E
Slide 39: Key data per share
Key data per share Rieter registered shares of 5 CHF nominal value 31.12.2014 30.06.2014 31.12.2013 Bloomberg: RIEN; Reuters: RITZn Shares outstanding excl. own shares 4 575 484 4 583 858 4 586 711 (end of period) Average shares (of period) 4 583 909 4 587 530 4 602 652 Share price (end of period) C