Rieter Holding Ag · SIX:RIEN
Rieter — Investor Presentation (November 2012)
52 slides from Rieter's investor presentation, November 2012
Slide 1: Rieter Holding – Investor presentation
Rieter Holding – Investor presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 – November . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Technology leadership 3. Investment program 2012/2013 4. Financial results first half year 2012 . . . . . 5. Market development & Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentat
Slide 3: 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 Efficient cycle Leading market management and positions value creation Technology and innovation leadership Rieter Holding investor presentation – 2012 No
Slide 4: History of Rieter
History of Rieter 1795 – 1925 1925 – 1984 1984 – 2011 Future Pioneer & diversification Rieter Machine Works Dual strategy Focus on textile phase Ltd. becomes a publicly machinery and listed company Global company with components: Trading of cotton activities in: Focus on spinning • Textile machinery
Slide 5: 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… all four spinning technologies From raw material… …to yarn Ring conventional (1) Ring compact (2
Slide 6: Leading market positions
Leading market positions Spun Yarn Systems Premium Textile Components (SYS) (PTC) • Leading position in high segment for all fields of • Supply to 3rd party OEMs underlines position in activity textile components • Recognised as an innovation leader with • By far largest supplier of textile componen
Slide 7: Business Group Spun Yarn Systems
Business Group Spun Yarn Systems 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 mach
Slide 8: Rieter's technology offering
Rieter’s technology offering Rieter – only supplier offering four end-spinning and preparation processes Ring Spinning Process carded SERVOtrail VARIOline Card Draw frame Draw frame Roving frame Ring spinning Compact Spinning Process combed SERVOtrail SERVOlap VARIOline Card Draw frame Combing Combe
Slide 9: Rieter's expertise offering
Rieter’s expertise offering Rieter – engineering from feasibility study to full spinning mill set-up Feasibility studies Mill planning Project management - Simulation - Layout (3D) - Engineering - Spinning schedule - Automation - Coordination - Production costs - Infrastructure - Hand-over Rieter Ho
Slide 10: Business Group Premium Textile Components
Business Group Premium Textile Components 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 offe
Slide 11: Fiber end-use consumption
Textile sector growth Growth in GDP per capita – especially in China and India – is driving demand GDP and fiber consumption growth 100 Fiber end-use consumption 40 NA NA NA in kg per capita p.a. China WEU WEU 20 China WEU China 10 LA LA LA 5 India 3 India India 2000 2008 Size = Population 2016 1 1'
Slide 12: Fibre consumption by type
Fibre consumption by type Rieter covers both man-made and natural fibers in short staple segment 100% Viscose Nonwoven 4% 8% 8% Long staple Filament 40% Man-made (Polyester etc.) 32% 60% Cotton Short staple 48% 2010 Note: Estimates based on 2010 volumes Rieter Holding investor presentation – 2012 No
Slide 13: Projected growth of short-staple fiber demand
Projected growth of short-staple fiber demand Demand for short-staple fibers will significantly increase till 2030 Million tons 66 2,3% 11 51 6 41 26 Viscose staple 3 20 Man-made staple 15 29 Cotton 23 26 Source: Rieter / Gherzi 2010 2020 2030 Rieter Holding investor presentation – 2012 November 13
Slide 14: Productivity gain in short-staple spinning
Productivity gain in short-staple spinning The last decades have seen continuous productivity increase 1947 2012 Blowroom lines 2 1 Card 72 3 Auto. Card feeding - yes Sliver lap former 4 - Drawframe - 1 Ribbon lap former 4 - UNIlap - 1 Auto. Lap transport - yes Comber 24 3 Drawframes 36 x 2 1 Coarse
Slide 15: Productivity gain in short-staple spinning
Productivity gain in short-staple spinning Productivity gain from 2000 to 2010 was around 1% per year Installed spindle capacity 3,8% Consumption per installed spindle (equivalent) 285 equivalent (million tons) 196 0,7% 0,13 0,14 2000 2010 Short staple fibre consumption 4,6% (million tons) 41 2000 2
Slide 16: Market development: Expansion in Asia
Market development: Expansion in Asia In a cyclical market, India and China will continue to drive growth Spindle equivalents (shipments) - in million 19 18.2 18.5 Future growth 18 16.9 16.9 drivers 17 China 16 India 15.1 15.2 15 • Growing fibre RoW 14 demand calls for 13 10.1 12.4 12 9.5 11.5 addit
Slide 17: Rieter – Strategic intent
Rieter – Strategic intent Strategic intent Organic growth / growth by acquisitions • Stay No. 1 in the high segment, become at least No. 2 in the mid segment • Strengthen position in China and India • Close product gaps through innovation and external opportunities Innovation • Improve yarn quality
Slide 18: Rieter – Strategy implementation organic growth
Rieter – Strategy implementation organic growth Continued intensity of strategy implementation in 2012 / 2013 • Expansion in Asia: Capacity expansion of production sites in Changzhou (China) and Pune (India) Additional Investments for 2012/2013: • Innovation: Driving innovation, product ~ 90 million
Slide 19: Rieter – Strategy implementation external growth
Rieter – Strategy implementation external growth Clear criterias 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 • Allo
Slide 20: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Technology leadership 3. Investment program 2012/2013 4. Financial results first half year 2012 . . . . . 5. Market development & Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentat
Slide 21: Technology leadership – energy efficiency
Technology leadership – energy efficiency Energy efficiency especially important in end spinning with Rieter in the lead Energy cost per process step (in %) Power consumption per ton of yarn (kW/indexed) – ring spin 58 100,0 77,1 78,9 19 14 9 Spinning Rieter G32 Competitor Best Competitor Roving Rin
Slide 22: Technology leadership – innovation example
Technology leadership – innovation example Innovations will lower energy consumption even further “Seahorse” – the smart way to save energy on ring spinning Customer benefits: • 4 Watt savings per spindle = 3$ per spindle / year = 5000$ per machine / year • 2 Mio. pcs. “Seahorse” will save 64 GWh* p
Slide 23: Technology leadership – quality and productivity
Technology leadership – quality and productivity Keeping quality at higher productivity with lower energy consumption Example: Card Example: Comber C 70 C 60 % E 80 E 76 % Introduction 2011 2008 2012 2007 Largest active Largest active 1.5m Technical combing area + 500 nips/min; carding area; technol
Slide 24: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Technology leadership 3. Investment program 2012/2013 4. Financial results first half year 2012 . . . . . 5. Market development & Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentat
Slide 25: Expansion in Asia: Potential in China and India
Expansion in Asia: Potential in China and India Significant potential to increase market position in China 2010, world-wide installed capacity 2011, Rieter sales distribution in % (spindle equivalents) in % Africa Europe Africa Americas Europe 2% 6% Americas 2% 7% 12% 12% Rest of Asia China 18% 14%
Slide 26: Expansion in Asia: Five-year plan of China
Expansion in Asia: Five-year plan of China China 5-year plan demands for quality and productivity increase in spinning Main Targets of the 12th Five-year Plan of Cotton Sector Change in Index 2010 2015 % Production (10’000 tons) 2717 3450 +27% Share of non-lap carding (%) 48.06 65 +35% Share of knot
Slide 27: Expansion in Asia: Ring spin vs. competition
Expansion in Asia: Ring spin vs. competition Rieter product portfolio allows for productivity and quality increase Example: Ring spin Local Rieter G32 % competitor Energy consumption 98% 100% -2 (kWh/kg) Average spindle speed 110% 100% +10 (Ne 32) Labour requirement 88% 100% -12 (FTE for ring spin)
Slide 28: Expansion in Asia: Addressing growth potential
Expansion in Asia: Addressing growth potential Increase in locally available product portfolio to adress growth potential Preparation Ring/ Rotor Rotor Roving Air-Jet Comfort (semi) (Auto) Blowroom Card Drawframe Comber Available local capacity in China / India 2011 2014 Rieter Holding investor pres
Slide 29: Rieter – Progress investment program 2012/2013
Rieter – Progress investment program 2012/2013 Progress in Asia and in innovations, process improvements started Expansion in Asia Innovation Process improvements • Inauguration of first stage of a • Airspinning machine (J 20) well • Global processes defined further manufacturing facility in receive
Slide 30: Expansion in Asia: Progress of build-up in China
Expansion in Asia: Progress of build-up in China First part of Plant II inaugurated and operational – construction ongoing Changzhou – Plant I Changzhou – Plant II Rieter Holding investor presentation – 2012 November 30
Slide 31: Expansion in Asia: Progress of build-up in India
Expansion in Asia: Progress of build-up in India Wing already operational, capacity ramp-up ongoing in Koregaon Bhima Wing (Pune) Koregaon Bhima (Pune) Rieter Holding investor presentation – 2012 November 31
Slide 32: Process improvements – Examples
Process improvements – Examples Standardisation of processes and value chain improvements China India Rieter Holding investor presentation – 2012 November 32
Slide 33: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Technology leadership 3. Investment program 2012/2013 4. Financial results first half year 2012 . . . . . 5. Market development & Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentat
Slide 34: Rieter – Financial highlights HY1 2012
Rieter – Financial highlights HY1 2012 Sales 9% below HY1 2011 but orders increased 41% versus HY2 2011 • Order intake at 404.1 million CHF – a decrease of 40% against HY1 2011 but an Order intake increase of 41% against HY2 2011 • Order backlog above 515 million CHF, parts of it reaching already in
Slide 35: Rieter – Financial key figures
Rieter – Financial key figures Development of key figures by half year HY1 HY2 HY1 FY CHF million 2012 2011 2011 2011 Order intake (1) 404.1 287.0 671.3 958.3 Sales 487.3 523.0 537.8 1060.8 Corporate output (CO) 441.4 490.6 551.9 1042.5 EBIT (2) 32.0 42.0 70.6 112.6 EBIT margin (of CO) 7.2% 8.6% 12.
Slide 36: Orders by Business Group
Orders by Business Group Order intake increased 41% versus HY2 2011 • Order intake 40% lower compared to HY1 2011 CHF million • Against HY2 2011 orders increased 900 41% driven by SYS (+48%) and PTC (+14%) 800 -40% +41% • Order intake in China in HY1 2012 700 671 exceeded HY1 2011 600 119 • Orders w
Slide 37: Sales by Business Group
Sales by Business Group Sales decreased 9% versus HY1 2011 to 487 million CHF • Sales decline by both Business Groups CHF million • SYS: -6% (local currency -6%) • PTC: -23% (local currency -21%) 900 • SYS sales development with > 400 800 million CHF relatively stable against 700 previous periods -9
Slide 38: Sales distribution HY1 2012
Sales distribution HY1 2012 Sales growth in China and Rest of Asia but decline in India • Rest of Asia grew 13% mainly in South Korea, Bangladesh, Indonesia and HY1 2012, sales distribution in % Pakistan Africa • Sales in Turkey decreased by 6% Europe 3% Rest of • Sales growth in China continued als
Slide 39: Operating result (EBIT) before strategic projects
Operating result (EBIT) before strategic projects EBIT margin before strategic projects at 10.1% of corporate output In % of CO 14.1% 11.6% 10.1% • Both Business Group‘s profitability decrease were impacted by CHF million • volume decrease, 90 -43% • significantly lower sales in India, 80 78 • Incre
Slide 40: Operating result (EBIT) by Business Group
Operating result (EBIT) by Business Group Volume decrease and investment program costs lead to lower EBIT margin In % of CO 12.8% 8.6% 7.2% • Investment program impacted in HY1 2012 Rieter EBIT with 12.5 million CHF CHF million equivalent to 2.8% of corporate output (HY1 2011: 7.1 million CHF) 90 -5
Slide 41: Net profit
Net profit Net profit margin at 5.0% of corporate output In % of CO 16.5% 5.7% 5.0% • Net profit decreased to 21.9 million CHF compared to previous exceptional half- CHF million year, which included sale of LMW 120 shares amounting to 42.3 million CHF • Gain on sale of investments of 4.4 -69 100 mil
Slide 42: Changes in workforce
Changes in workforce Flexibility mainly through temporary personnel Temporaries • Decrease in sales by 9% and corporate in % 28.6% 19.8% 14.6% output by 20% has been followed by FTE1) reduction of workforce in particular -17% through significantly lower temporaries 7.000 6.618 • Fix personnel reduce
Slide 43: Balance sheet
Balance sheet Solid net liquidity of 107.4 million CHF and equity ratio of 35% • Dividend of 27.7 million CHF paid out in 30.06. 31.12. 30.06. April, 2012 CHF million 2012 2011 2011 • Net liquidity of 107.4 million CHF Total assets 1061.7 1111.4 1135.5 remains solid • Shareholders‘ equity ratio rema
Slide 44: Free cash flow
Free cash flow Free cash flow of –15.5 million CHF impacted by net working capital swing HY1 HY1 • Free Cash Flow is negatively impacted CHF million by net working capital increase of –34.3 2012 2011 million CHF due to high sales in June Net profit 21.9 91.0 (higher trade receivables of 37.8 million
Slide 45: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Technology leadership 3. Investment program 2012/2013 4. Financial results first half year 2012 . . . . . 5. Market development & Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentat
Slide 46: Market development
Market development Challenging market environment with slight pick-up in northern India • Spinning mill margin continued to be stable and on a profitable level. However, downstream buying behaviour remained volatile. Financing for projects is becoming increasingly more difficult, especially in China
Slide 47: Outlook 2012
Outlook 2012 • Rieter will continue intensified investment activity through the 2012 financial year to lay the foundations for further profitable growth. To accelerate expansion in Asia and product innovation, Rieter plans investment activities totaling around 90 million CHF in 2012 and 2013, about
Slide 48: 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 corporate output Target pay-out ratio of Dividend policy approx. 30% of net result Rieter Holdin
Slide 49: Values and principles
Values and principles Rieter Holding investor presentation – 2012 November 49
Slide 50: 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 51: Appendix
Appendix Rieter Holding investor presentation – 2012 November 51
Slide 52: Cycle management: Employees
Cycle management: Employees Adjustment to volume swings and increase in China and India Distribution of employees (FTE) World India China 6.618 6.125 5.852 5.479 1.759 1.844 794 825 859 5.126 683 4.431 1.201 1.195 1.282 536 884 469 2009 HY1 2010 HY1 2011 HY1 2009 HY1 2010 HY1 2011 HY1 2009 HY1 2010
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