Slide 1: Half-Year Results 2015
Half-Year Results 2015 . . . . presentation, Investor . . . . July . 23, . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . . . . . . Joris Gröflin, Group CFO. . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and summary HY1 2015 Dr. Norbert Klapper 2. Financial results HY1 2015 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Half-Year Results 2015 2
Slide 3: HY1 2015: Key messages today
HY1 2015: Key messages today • Good result in HY1 2015 • Orders received strong at Components, stable at After Sales but low demand for Machines & Systems • Structure aligned to achieve strategic and financial targets • Strong balance sheet allows financing of growth • CHF challenge managed successf
Slide 4: 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 5: Rieter's new set-up
Rieter’s new set-up 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) Installation B
Slide 6: HY1 2015: Results
HY1 2015: Results Significant share of EBIT stems from After Sales and Components in HY1 Orders received (in mCHF) Sales (in mCHF) EBIT (in mCHF) -2% 16% 25% 35% 37% 13% 388.3 553.9 46.1 58% 17% 71% 30% Machines & Systems Components After Sales Others / corporate Half-Year Results 2015 6
Slide 7: Balance sheet
Balance sheet Continuously strong and shorter balance sheet Total assets, equity and equity ratio Liquid funds and net liquidity (in mCHF / in %) (in mCHF) 446 1’209 43% 1’100 37% 35% 992 300 768 265 712 568 172 139 119 388 442 424 HY1 HY2 HY1 HY1 HY2 HY1 2014 2014 2015 2014 2014 2015 Liabilities Eq
Slide 8: Rieter's Swiss franc challenge
Rieter’s Swiss franc challenge Additional measures initiated to reduce negative impact of strong CHF • Swiss franc cost exposure reduced Sales in since 2011 mCHF 1’061 1’153 554 • Investments in China and India as well 53% as Czech Republic allow for greater 50% flexibility 43% 40% • Rieter expects
Slide 9: Strategic focus – profitability improvement
Strategic focus – profitability improvement Continued focus on increasing profitability Sales and profitability development STEP UP Actions (in mCHF) • Grow profitable business 631 • Value-based pricing 538 557 554 523 522 • Optimized utilization of existing capacity 487 478 • Improvement of product
Slide 10: Agenda
Agenda 1. Introduction and summary of HY1 2015 Dr. Norbert Klapper 2. Financial results HY1 2015 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Half-Year Results 2015 10
Slide 11: Rieter – Financial highlights HY1 2015
Rieter – Financial highlights HY1 2015 Sales and profitability on good level % change to HY1 2014 / mCHF Orders Strong Components, stable After Sales, weaker -41% 388.3 received Machines & Systems Order backlog delivered despite currency turbulences Sales +6% 553.9 («Swiss franc shock») Short-term c
Slide 12: Rieter – Financial key figures
Rieter – Financial key figures Profitability in HY1 2015 above HY1 2014 mCHF HY1 2015 HY2 2014 HY1 2014 FY 2014 Order Intake 388.3 490.6 655.5 1146.1 Sales 553.9 631.3 522.1 1153.4 EBITDA 66.0 77.0 48.4 125.4 EBITDA margin (of sales) 11.9% 12.2% 9.3% 10.9% EBIT 46.1 55.8 28.8 84.6 EBIT margin (of sa
Slide 13: Orders by business group
Orders by business group Orders received lower at 388.3 million CHF – order growth at Components • Trends in demand differed at the three mCHF business groups 700 • Slow: Business Machines & Systems 656 with 225.5 million CHF orders received 600 (- 34% vs. HY2 2014) -21% 491 • Stable: Business Group
Slide 14: Sales by business group
Sales by business group Sales increase by 6% with growth in all three business groups • 71% of sales from Machines & mCHF Systems, 29% of sales from After Sales +6% (13%) and Components (16%) 700 631 • Positive: Business Group Machines & 600 554 Systems with 392.7 million CHF sales 522 (+ 4% vs. HY1
Slide 15: Change in sales and currency impact
Change in sales and currency impact Sales growth volume driven – but differences in the business groups Machines & Rieter mCHF After Sales Components Systems Group Sales HY1 2014 376.1 59.6 86.4 522.1 Volume and price 11.3 11.1 12.5 34.9 Currency translation 5.3 -1.1 -7.3 -3.1 Sales HY1 2015 392.7 6
Slide 16: Sales development by region
Sales development by region Strong growth in Asia and the US, positive development in India mCHF • Americas with strongest growth against HY1 2014, followed by Asian Asian countries 177 +25% countries1) 141 • India with growth 109 +37% • Turkey and China with lower Americas 80 sales than HY1 2014 Tu
Slide 17: Operating result (EBIT)
Operating result (EBIT) EBIT margin at good 8.3% In % of • EBIT increased by 60% to 46.1 million CHF in HY1 sales 5.5% 8.8% 8.3% 2015 mCHF • Higher profitability compared to HY1 2014 driven +60% by all three business groups 70 56 • Profitability development stems from 60 • Strong development at Afte
Slide 18: Net profit and RONA
Net profit and RONA Net profit margin increase to 5.3% thanks to better operating result In % of • Financial result improved against HY1 2014 due to sales 2.7% 6.1% 5.3% lower interest cost mCHF • Tax rate declined to 29.7% (HY1 2014: 33.5%) 50 • Earnings per share increased to 6.36 CHF +103% (HY1 2
Slide 19: Changes in workforce
Changes in workforce Total workforce drops 1% year-on year Temporaries • Fix employees increase mainly in in % 20.7% 19.6% 14.5% Czech Republic FTE1) • Temporaries decrease mainly in China, -1% Switzerland and Germany 7.000 6100 6224 6021 6.000 1265 1220 871 5000 4000 3000 4835 5004 5150 2000 1000 0
Slide 20: Balance sheet
Balance sheet Net liquidity at 139.0 million CHF and equity ratio increase to 42.7% • Currency translation adjustment with 30.06. 31.12. 30.06. negative impact on net liquidity mCHF 2015 2014 2014 • Dividend of 20.6 million CHF (4.50 CHF Total assets 991.6 1209.4 1100.2 per share) paid out in April
Slide 21: Net working capital
Net working capital Seasonal increase of net working capital to 62.1 million CHF • Positive impacts on net working capital 30.06. 31.12. 30.06. thanks to lower inventories mCHF 2015 2014 2014 • Advance payments at lower levels due Inventories 207.8 253.1 264.8 to low orders received at Machines & Sy
Slide 22: Capital expenditures / D&A
Capital expenditures / D&A Capital expenditures significantly below depreciation / amortization level mCHF Capital expenditures Depreciation & Amortization 45 45 40 40 -42% 35 35 30 30 30 +2% 25 10 25 21 20 20 20 0 20 8 8 8 15 13 9 15 0 1 1 10 4 7 10 5 5 5 1 5 3 10 0 3 5 4 7 8 7 5 0 1 0 HY1 2014 HY2
Slide 23: Free cash flow
Free cash flow Net working capital drives free cash flow to -5.1 million CHF in HY1 • Free cash flow impacted by higher HY1 HY1 mCHF receivables and lower payables and 2015 2014 advance payments Net profit 29.1 14.3 • Lower capex Interest and tax expense (net) 16.4 13.3 • Positive impact from sale o
Slide 24: Agenda
Agenda 1. Introduction and summary of 2014 Dr. Norbert Klapper 2. Financial results 2014 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Half-Year Results 2015 24
Slide 25: Outlook
Outlook • As of June 30, 2015, the order backlog amounted to around 540 million CHF. • There was a healthy trend in demand for products and services provided by After Sales and Components in the first six months of the year. By contrast, Machines & Systems’ markets were characterized by spinning mil
Slide 26: Mid-term targets
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, raw material pri
Slide 27: 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 28: Values and principles
Values and principles Half-Year Results 2015 28
Slide 29: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Half-Year Results 2015 29
Slide 30: RONA
RONA Return on net assets (RONA) of 10.7% above cost of capital mCHF 30.06.2015 31.12.2014 HY1 2015 Non-current assets 361.2 387.3 Inventories and receivables 365.2 376.5 Liquid funds 265.2 445.6 Total assets 991.6 1‘209.4 Non-current liabilities (excl. debt) -138.4 -141.7 Current liabilities (excl.
Slide 31: RONA
RONA Decrease of net assets in HY1 2015 Net profit before fin. result mCHF Net assets (excl. Debt) and write-off of fin. assets 716 44 570 550 387 363 34 361 377 437 365 21 446 300 265 -133 -142 -138 -397 -352 -303 HY1 2014 HY2 2014 HY1 2015 HY1 2014 HY2 2014 HY1 2015 Non-current assets Non-current
Slide 32: Key data per share
Key data per share Rieter registered shares of 5 CHF nominal value 30.06.2015 31.12.2014 30.06.2014 Bloomberg: RIEN; Reuters: RITZn Shares outstanding excl. own shares 4‘581‘585 4‘575‘484 4‘583‘858 (end of period) Average shares (of period) 4‘577‘017 4‘583‘909 4‘587‘530 Share price (end of period) C
Slide 33: Rieter – global presence
Rieter – global presence Half-Year Results 2015 33
Slide 34: 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 35: Market trends and growth
Market trends and growth Market for short staple spinning equipment is assumed to grow in value Value (in mCHF) 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 only Mar
Slide 36: Dividend
Dividend Dividend of 4.50 CHF paid out for 2014 Dividend Pay-out ratio Reserves from capital (in CHF per share) (in % of net profit) contributions (in mCHF) 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 * Equals CHF 15.86 per share Hal
Slide 37: 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 38: Rieter position
Rieter position Increase in market share thanks to strong position and capacity increase Value (in mCHF) 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 20141)
Slide 39: Strategic focus – profitable growth
Strategic focus – profitable growth Progress made towards mid-term targets – improvement ongoing Sales and EBIT (in mCHF) 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 Utilize
Slide 40: 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