Rieter Holding Ag · SIX:RIEN
Rieter — Helvea Baader Bank Group Conference January 2015
40 slides from Rieter's conference presentation, January 2015
Slide 1: Rieter Holding Investor Presentation
Rieter Holding Investor Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . Helvea . . Baader . . Bank . Group . . .– January . . Conference . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 2: Key messages
Key messages Rieter sets priorities in the implementation of it’s strategy Strengthening innovation Expanding parts and components business Increase profitability Adjusted medium-term targets Outlook for 2014 confirmed 2015 January – Rieter Holding Investor Presentation – Helvea Baader Con
Slide 3: Agenda
Agenda 1. Market trends and growth 2. Rieter position 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 3
Slide 4: 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 53 70% 63% 58% 56% 53% 2000 2010 2014 2020 2009 2010 2011 2012 2013 Cotton Manmade staple fibres xx% CAGR short staple fib
Slide 5: 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% 4'330 14.7 15.0 3'950 2013 Mid-term 2013 Mid-term Actual estimate Actual estimate w/o Winder Endspinning machines only Market growth i
Slide 6: Agenda
Agenda 1. Market trends and growth 2. Rieter position 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 6
Slide 7: Rieter position
Rieter position Strong market position, upside potential by realized capacity increase Value (in million CHF) Spindle equivalents (in million) 4’220 18.4 3’990 3’950 17.1 3’610 14.7 13.6 22% 25% 25% 26% 7% 9% 10% 12% 2010 2011 2012 2013 2010 2011 2012 2013 Market value Rieter market share Market Rie
Slide 8: Rieter position
Rieter position Consistent profitability improvement since HY2 2012 Sales and profitability development Profitability drivers: (in million CHF) Price and currency development 557 538 523 522 Development of product and regional mix 487 478 401 Improved product cost 13.1% Less profitable busin
Slide 9: Agenda
Agenda 1. Market trends and growth 2. Rieter position 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 9
Slide 10: 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 11: 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 12: 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 1’061 1’035 Excellent after sales is a key differentiator in the market 865 889 SYS Parts and PTC business is more stable through t
Slide 13: Strategic focus – profitable growth
Strategic focus – profitable growth Improvement measures started to increase profitability Sales and EBIT (in million CHF) Improvement measures Focus area Content ~1’300 Delight your Improve customer customer satisfaction 1’035 +265 Enhance strategic Price pricing Margin Utilize capacities in Mix Ch
Slide 14: 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 15: Agenda
Agenda 1. Market trends and growth 2. Rieter position 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 15
Slide 16: Market environment
Market environment • Spinning mills’ narrowing margins due to declining raw material and yarn prices in the third quarter have resulted in a slowdown in market momentum, especially in Turkey, the Asian countries (without China and India) and Latin America. The slightly positive momentum in India was
Slide 17: Outlook
Outlook • Rieter expects for the second half of 2014 a market demand on lower levels than in the strong first semester. Demand depends among other factors on the development of yarn and raw materials prices, currency exchange rates, financing costs, and global consumer sentiment. • Based on the curr
Slide 18: 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 19: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 19
Slide 20: Key investment highlights of Rieter
Key investment highlights of Rieter 1 Long-term growth industry Experienced Broadest global Management 6 2 systems team and Board supplier of Directors Rieter Efficient cycle Leading market 5 management 3 positions with and value global footprint creation Technology and 4 innovation leadership 2015
Slide 21: Rieter's market: Short staple spinning machines and components
1 – 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: 40.2 million tons (2012) • Consumption growth: ~2.
Slide 22: Rieter's market: Long-term growth industry
1 – Rieter’s market: Long–term growth industry Cyclical market will be driven by continued growth in fiber demand Spindle equivalents (shipments) - in million Investment cycle triggers: 20 19.1 18.4 • Positive spinning mill China 17.1 margins (conversion 15.5 15 India 14.7 14.7 between raw material
Slide 23: Rieter's market: Impact of macro trends on growth
1 – 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 gain
Slide 24: Rieter's market: Fiber and yarn price
1 – 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,
Slide 25: Broadest global systems supplier
2 – 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 (1)
Slide 26: Full-liner: Spinning technology for all fiber types
2 – 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) 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 2
Slide 27: Full-liner: Rieter offers full systems
2 – 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 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference
Slide 28: Service and installation offering
2 – Service and installation offering Rieter – service and engineering solutions as key value proposition Feasibility studies Mill planning Project management - Simulation - Layout (3D) - Engineering - Spinning schedule - Automation - Coordination - Production costs - Infrastructure - Hand-over 2015
Slide 29: Leading market positions with global footprint
3 – Leading market positions with global footprint Continuous increase of sales in largest market China 2012, world-wide installed capacity (spindle equivalents) in % 2010 – 2013, Rieter sales in Mio CHF Africa Europe 1.200 Americas 1061 5% 1035 7% 1.000 2% 151 870 889 223 China Rest of Asia 800 103
Slide 30: Technology and innovation leadership
4 – Technology and innovation leadership SYS and PTC are focused on improving customer’s competitive position Cost structure of a spinning mill In % of total cost, excluding overhead and interest costs Improvement of yarn property (higher prices) Raw 45-73% material 68-85% Reduction of raw material
Slide 31: Efficient cycle management and value creation
5 – Efficient cycle management and value creation Improved sales and profitability in HY1 CHF million HY1 2014 HY2 2013 HY1 2013 FY 2013 FY 2012 Order Intake 655.5 548.0 711.4 1‘259.4 839.7 Sales 522.1 557.2 478.1 1‘035.3 888.5 EBITDA (1) 48.4 60.9 34.3 95.2 65.9 EBIT (1) 28.8 43.1 17.1 60.2 32.7 EB
Slide 32: Return on net assets and free cash flow
5 – Efficient cycle management and value creation Return on net asset base and free cash flow generation of high significance Sales Return on net assets Capex and FCF (in million CHF) (in %)1) (in million CHF)2) 79.5 1061 1035 13.1 61.1 199 889 178 161 8.5 6.7 862 858 728 -32.3 -57.3 -55.0 -81.6 201
Slide 33: RONA calculation
5 – Efficient cycle management and value creation RONA calculation CHF million 31.12.2013 31.12.2012 2013 Non-current assets 371.1 356.3 Inventories and receivables 373.2 361.9 Liquid funds 369.7 351.9 Total assets 1‘114.0 1‘070.1 Non-current liabilities (excl. debt) -137.4 -138.0 Current liabilitie
Slide 34: Strong net liquidity and stable equity ratio
5 – Efficient cycle management and value creation Strong net liquidity of 118.6 million CHF and equity ratio stable at 35% • Net liquidity of 118.6 million 30.06. 31.12. 30.06. 31.12. CHF impacted by CHF million 2014 2013 2013 2012 • low free cash flow due to Total assets 1100.2 1114.0 1092.7 1070.1
Slide 35: Experienced BoD and Management team
6 – Experienced BoD and Management team 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 President Member of the Board Member of the Board Member of the Board Man
Slide 36: 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 37: Spun Yarn Systems 2013
Spun Yarn Systems 2013 Leading systems supplier in the spinning process Brand: • Customers / regions: Spinning mills in Turkey, India, China, South East Asia, North and Latin America, Africa • Market size: ~2,800 million CHF (2010) • Product offering: Short staple spinning systems and machinery for
Slide 38: Premium Textile Components 2013
Premium Textile Components 2013 Leading supplier of premium textile components Brands: • Customers / regions: Spinning mills and OEMS (Rieter and third) in India, China, Turkey, Europe, South East Asia, North and Latin America, Africa • Market size: ~1,100 million CHF (2010) • Product offering: Dura
Slide 39: Strategy implementation external growth
Rieter – Strategy implementation external growth Clear criteria for target selection • Selected acquisitions in the Criteria: components business • Strong brand in the respective segment • Closing product gaps in the • Improving market access or machinery business enhancing product portfolio • Allow
Slide 40: Values and principles
Values and principles Comfort thanks to Rieter Delight Fight Enjoy your for your Customers Profits Work Rieter is a publicly-listed Swiss industrial group providing innovative solutions tor the global industry. 2015 January – Rieter Holding Investor Presentation – Helvea Baader Conference 40
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