Rieter Holding Ag · SIX:RIEN

Rieter — Investor Presentation (November 2015)

48 slides from Rieter's investor presentation, Nov 13, 2015

  1. Slide 1: Investor and Analyst Briefing 2015

    Investor and Analyst Briefing 2015 . . . 2015, ITMA . . November . . . 13, . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIETER HOLDING . . . . . . . . . . . . . . . . . . . . . . . . .

  2. Slide 2: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  3. Slide 3: Welcome and schedule

    Welcome and schedule • 13.10 – 13.15 Welcome • 13.15 – 13.45 Presentation • 13.45 – 14.15 Q&A • 14.15 – 15.00 Booth tour Investor & Analyst Briefing November 2015 3

  4. Slide 4: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  5. Slide 5: Strategic focus – long-term growth industry

    Strategic focus – long-term growth industry Textile business will continue to grow – short staple as largest segment World population and fiber consumption growth 137 104 66 relevant market 51 relevant market 57 Short staple (cotton, viscose, 35 synthetic, recycled fibers) Other fibers (filament, no

  6. Slide 6: 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

  7. Slide 7: Rieter's progress towards the mid-term targets

    Rieter’s progress towards the mid-term targets Committed execution of “STEP-UP” initiatives since October 2014 Mid-term targets 17/18 “STEP-UP” “STEP-UP” Progress Delight your Sales growth customer Introduction of BG After Sales Sales above market Price Mitigation of CHF appreciation impact Margin E

  8. Slide 8: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  9. Slide 9: Focus on innovation – key drivers

    Focus on innovation – key drivers Rieter is focusing on improving customers competitive position Material cost Labor Energy Depreciation Yarn price • Raw material yield • Automation • Power • Utilization • Yarn properties • Raw material quality • Maintenance consumption (Reliability/ • Evenness / co

  10. Slide 10: Combing: The new E 36 / E 86

    Combing: The new E 36 / E 86 Industry leadership with the new combing machine set Combing set E 36 / E 86 • High output of 540 kg/h per set:  + 20% • + 1 combing machine per set • Noil ratio adjustments possible • comb inside Investor & Analyst Briefing November 2015 10

  11. Slide 11: Rotor spinning: The new R 66

    Rotor spinning: The new R 66 Productivity and performance – also down the value chain Rotor Auto R 66 • Longer machine (up to 700 positions) • High yarn strength with better performance in weaving / knitting • Improved winding leads to higher R 66 Picture package quality • Fiber versatility with CHA

  12. Slide 12: Airjet spinning: The new J 26

    Airjet spinning: The new P 26 Important milestone passed: Polyester option now available Airjet J 26 • Water-based injection solution allows 100% polyester spinning • Soft-yarn spinning capability for 100% combed cotton and blends • Up to 6 robots on 200 spinning J 26 Picture positions allow high fl

  13. Slide 13: New innovations: “Internet of Things”

    New innovations: “Internet of Things” Mill monitoring becomes mobile and interactive: SPIDERweb Mill Control • Mill Monitoring System – for specialists • Cockpit & Alert App – for managers • Detailed mill information • Summarized mill information • Usable within mill local network • Worldwide usable

  14. Slide 14: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  15. Slide 15: After Sales value proposition

    After Sales value proposition Long-term customer competitiveness maximizing return on investment Sustaining Value Rieter After Sales serves customers wherever they are located with spare parts, value-adding after sales services and solutions over the entire product life cycle. Solution Provider Afte

  16. Slide 16: After Sales: Building on a strong base

    After Sales: Building on a strong base A global footprint of dedicated after sales professionals • Worldwide presence with more than 700 after sales professionals • Serving more than 3’000 active customers in 98 countries via Rieter subsidiaries and around 60 agents • Significant size of installed R

  17. Slide 17: After Sales: Our ambition

    After Sales: Our ambition After Sales aims to grow by more than 30% in sales until 2018 against 2014 Sales (in MCHF) Main growth drivers: > 166 • After Sales Excellence initiative: • Portfolio enlargement +>30% 128 • Penetration / share of wallet increase • Delivery performance optimization • Growth

  18. Slide 18: After Sales: First results

    After Sales: First results Promising customer response with the After Sales Excellence program Example for After Sales Solutions offering • Consulting customers with end-to-end mill conversions and upgrades • Rieter’s systems supplier expertise as a key differentiator 1 3 2 1 1 2 3 Investor & Analys

  19. Slide 19: After Sales: The way forward

    After Sales: The way forward Bundling products and services around customer needs Actions: • Dedicated business group established: • Increased customer focus • Concentration of capabilities and capacities • Improvement and growth levers identified: >10 initiatives released • After sales innovations

  20. Slide 20: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  21. Slide 21: Profitability improvement mid-term: 10% EBIT margin

    Profitability improvement mid-term: 10% EBIT margin Key initiatives lead to the profitability improvement HY1 HY2 HY1 Mid-term Key initiatives 2014 2014 2015 Target Machines & Systems 376.1 477.4 392.7 Innovations / CN,IN / Pricing Sales After Sales 59.6 67.9 69.6 After Sales Excellence +>30% (mCHF)

  22. Slide 22: Profitability improvement mid-term: 14% RONA

    Profitability improvement mid-term: 14% RONA Reduction of net assets with increased profitability in order to achieve target • Reduction of net working capital Net profit by half-year • Sale of non-core assets (before interest cost / mCHF) • Investments on or below D&A level 60 50 HY2 2014 40 13.7%

  23. Slide 23: Agenda

    Agenda 1. Welcome Cornelia Schreier 2. Introduction and strategic focus Dr. Norbert Klapper 3. Innovative solutions Dr. Norbert Klapper 4. After Sales Carsten Liske . . . . . 5. Profitability improvement Joris Gröflin . . . . . . . . . . . . . . . 6. Outlook Dr. Norbert Klapper . . . . . . . . . . .

  24. Slide 24: Outlook

    Outlook • While the order intake trend for both business groups Components and After Sales is pleasing, the market for new machinery at the business group Machines & Systems is at a low level. This trend is due to spinning mills’ low margins as well as uncertainty in the individual sales markets. •

  25. Slide 25: 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

  26. Slide 26: Values and principles

    Values and principles Investor & Analyst Briefing November 2015 26

  27. Slide 27: Appendix

    Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investor & Analyst Briefing November 2015 27

  28. Slide 28: 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 after sales Technology and 4 innovation lea

  29. Slide 29: 1 – Long-term growth industry

    1 – Long-term growth industry Rieter will profit from market drivers and shifts Textile mill consumption (in million tons) Performance shift (in %) 2.2% 98 30% 37% 85 42% 44% 47% 74 60% 51 70% 63% 58% 56% 53% 40% 2000 2010 2014 2020 2009 2010 2011 2012 2013 2014 Cotton xx% CAGR short staple fibers H

  30. Slide 30: 1 – Long-term growth industry

    1 – Long-term growth industry Market for short staple spinning equipment is assumed to grow in value Value (in million CHF) Spindle equivalents (in million) +1.5% -0.4% 3'830 4'070 13.8 13.6 2014 Mid-term 2014 Mid-term estimate estimate Without Winder Endspinning machines only  Market growth is dri

  31. Slide 31: 2 – Rieter systems with superior customer value

    2 – Rieter systems with superior customer value Higher total value of ownership for Rieter systems customers Exemplary spinning mill lay-out: Compact ring spinning system Draw Blowroom Card Comber Flyer Compact ring spin frame Rieter System Value Proposition  One-stop-shop: providing customer speci

  32. Slide 32: 2 – Rieter: Business Groups

    2 – Rieter: Business Groups 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) Instal

  33. Slide 33: 2 – Rieter: Business Groups

    2 – Rieter: Business Groups Preparation • Leading position in high-end segment for all fields Machines & of activity Systems • Recognized as an innovation leader with superior Ring Compact Rotor Air-Jet products Transport Automation Monitoring • Best support to leverage customers’ investment in Riet

  34. Slide 34: 2 – Business Group Machines & Systems

    2 – Business Group Machines & Systems Rieter offering systems solutions from bale to yarn Fiber Spinning Ring Compact Compact Rotor Air-Jet Preparation Preparation Spinning Spinning Spinning Spinning Spinning Investor & Analyst Briefing November 2015 34

  35. Slide 35: 2 – Business Group Components

    2 – Business Group Components The only global components provider for all spinning technologies • Complete components product range from fibre to yarn • Spinning components for all 4 spinning technologies • Products for high-end and basic technology • Global sales, service, engineering and manufactu

  36. Slide 36: 3 – Leading market positions with global footprint

    3 – Leading market positions with global footprint Strong global production, sales and service footprint to serve key markets Investor & Analyst Briefing November 2015 36

  37. Slide 37: 3 – Leading market positions with global footprint

    3 – Leading market positions with global footprint Increase in market share thanks to strong position and capacity increase Value (in mCHF) Spindle equivalents shipped (in million) 4’220 18.4 3’990 3’950 3’830 17.1 3’610 14.7 13.6 13.8 22% 25% 25% 26% 30% 7% 9% 10% 12% 17% 2010 2011 2012 2013 2014 2

  38. Slide 38: 3 – Leading market positions with global footprint

    3 – Leading market positions with global footprint Continuous increase of sales in Asia World-wide installed capacity Rieter sales in Mio CHF (spindle equivalents) in % 1.200 1’153 Africa Europe Americas 1’061 1’035 174 China 7% 5% 1.000 151 2% 870 889 223 131 India Asian 103 175 800 193 countries*

  39. Slide 39: 4 – Technology and innovation leadership

    4 – Technology and innovation leadership Past break-through examples prove technology and innovation leadership Widest, self OMEGAlap Double-head New Compact Rotor sharpening (combing autolevel. Air-Jet spinning spinning Machines & card prep.) draw frame Machine machine K 46 machine R 66 Systems 200

  40. Slide 40: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation Rieter’s market is characterized by cyclical fluctuations 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 and 13

  41. Slide 41: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation Significant share of EBIT stems from After Sales and Components in HY1 15 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 I

  42. Slide 42: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation 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

  43. Slide 43: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation 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 or

  44. Slide 44: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation 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

  45. Slide 45: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation 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. d

  46. Slide 46: 5 – Efficient cycle management and value creation

    5 – Efficient cycle management and value creation 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 2

  47. Slide 47: 6 – Experienced management team and BoD

    6 – Experienced management team and BoD 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 Preside

  48. Slide 48: Share price

    Share price 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) CHF 147.

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