Slide 1: Results 2017 Media and Investor Presentation, March 13, 2018
Results 2017 . Media . . and . Investor . . . Presentation, . . . . March . . 13, . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . Joris . Gröflin, . . Group . CFO. . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Highlights 2017 Dr. Norbert Klapper 2. Financial Results 2017 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2017, Media and Investor Presentation, March 13, 2018 2
Slide 3: Highlights 2017
Highlights 2017 • Order intake CHF 1 051.5 million, order backlog CHF 540 million • Improvement program “STEP UP” on track: 1. Innovation: Successful product launches in 2017, launches in 2018 on track, strong focus on ITMA Barcelona 2019 2. After Sales/Components: After Sales continues to grow, suc
Slide 4: Order Intake by Business Group
Order Intake by Business Group Increase of orders in 2017 by 16% CHF million +16% • HY1 2017: CHF 495.2 million 1.100 HY2 2017: CHF 556.3 million 1 052 1.000 • Business Group Machines & Systems 905 Growth in Asian countries1, mainly Uzbekistan, 900 Bangladesh and Indonesia; Turkey picked up in 800 H
Slide 5: Innovative Solutions
Innovative Solutions Focus on innovation and digitization of spinning mills R&D expenses • Successful market introduction of the single- (CHF million/in % of sales) head draw frame RSB-D 50 48.0 49.2 • Launch of UPtime Digital Maintenance 45.0 46.3 46.6 Solution • New compact spinning and ring spinn
Slide 6: UPtime Digital Maintenance Solution
UPtime Digital Maintenance Solution Bring artificial intelligence into spinning maintenance UPtime Digital Maintenance Solution • UPtime is an expert system which supports predictive maintenance in the mill • Significant reduction of unplanned downtime • Lower cost of maintenance and inspection • In
Slide 7: After Sales Excellence
After Sales Excellence Top and bottom line continue to grow Sales EBIT CHF million CHF million 166 35 +14.8% +39.2% 30 28 146 27 26 140 142 25 140 20 20 127 15 120 10 5 100 0 2014 2015 2016 2017 2014 2015 2016 2017 EBIT in 2017 are before restructuring and impairment Results 2017, Media and investor
Slide 8: SSM Textile Machinery (SSM)
SSM Textile Machinery (SSM) Successful integration of SSM into the Business Group Components • Impact of SSM on the consolidated income statement (July 1 until December 31, 2017): Order Intake: CHF 42.5 million Sales: CHF 49.1 million EBITDA1: CHF 8.3 million Enterprise Value: CHF 100.2 million 1 be
Slide 9: Ingolstadt/Germany
Ingolstadt/Germany Project on track • Agreement with the Works Council in September 2017 • Implementation started, production will be fully transferred to the Czech Republic by end of 2018 • Rieter expects annual savings of more than CHF 15 million as of 2019 • R&D and after sales support will stay
Slide 10: Agenda
Agenda 1. Highlights 2017 Dr. Norbert Klapper 2. Financial results 2017 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2017, Media and Investor Presentation, March 13, 2018 10
Slide 11: Financial Highlights 2017
Financial Highlights 2017 Return to growth and strong impact of restructuring CHF million, except dividend +16% (excl. Order Intake 1 051.5 Upturn in second half-year 2017 continued SSM +11%) +2% (excl. Sales 965.6 Stronger second semester SSM -3%) EBITDA 9.8% before restr. 94.6 At the level of prev
Slide 12: Financial Key Figures
Financial Key Figures Stronger profitability and cash flows in second half year CHF million FY 2017 HY2 2017 HY1 2017 FY 2016 Order Intake 1 051.5 556.3 495.2 905.2 Sales 965.6 550.4 415.2 945.0 EBITDA before restr. charges 94.6 59.8 34.8 95.8 EBITDA margin (of sales) 9.8% 10.9% 8.4% 10.1% EBIT befo
Slide 13: Sales by Business Group
Sales by Business Group Sales at CHF 966 million ‒ thanks to strong second semester CHF million +2% CHF million 1.000 945 966 1.000 900 900 800 800 700 700 590 +33% 603 600 600 550 500 500 415 400 400 334 300 146 300 255 142 200 200 76 200 2301 70 100 100 1401 90 0 0 2016 2017 HY1 2017 HY2 2017 Mach
Slide 14: Sales Development by Region
Sales Development by Region Growth in Asian countries and Americas ‒ solid demand from China CHF million • In Asian countries¹, Rieter increased sales to CHF 1.100 945 966 319.1 million (+11% vs. 2016) 1.000 46 Europe • Sales of CHF 184.0 million in China at a good level (-1% vs. 2016) 900 43 41 28
Slide 15: Operating Result (EBIT) before Restructuring Charges
Operating Result (EBIT) before Restructuring Charges EBIT before restructuring at 5.4% of sales In % of 6.0% 5.4% • Business Group Machines & Systems: decrease in sales operating profitability in 2017 due to lower volumes with EBIT before restructuring charges of 0.1% of CHF million sales (2016: 0.6
Slide 16: Net Profit and Return on Net Assets (RONA)
Net Profit and Return on Net Assets (RONA) Net profit margin (1.4%) and RONA (3.0%) affected by restructuring charges In % of • Financial result (net) of CHF -0.5 million improved sales 4.5% 1.4% compared to previous year (2016: CHF -3.1 million) CHF million • Tax rate declined to 17% (2016: 21%) wi
Slide 17: Balance Sheet
Balance Sheet Improvement of net liquidity in the second semester • Net working capital increased to CHF 31/12/ 30/06/ 31/12/ CHF million 37.9 million (2016: CHF -14.6 million) 2017 2017 2016 • Net liquidity decreased to CHF 130.5 Total assets 1 048.2 1 009.0 998.1 million mainly affected by acquisi
Slide 18: Net Working Capital
Net Working Capital Decrease of net working capital in the second semester Increase in net working capital compared 31/12/ 30/06/ 31/12/ to previous year mainly as a result of the CHF million 2017 2017 2016 following effects: • higher inventories (planned deliveries in Inventories 192.4 201.9 163.2
Slide 19: Capital Expenditures/Depreciation & Amortization
Capital Expenditures/Depreciation & Amortization Capital expenditures below the level of depreciation/amortization CHF million Capital expenditures Depreciation & amortization 60 60 +9% 50 50 43 39 40 -6% 40 31 14 29 14 30 30 1 10 12 1 20 1 20 10 15 1 15 10 12 10 14 13 5 4 0 0 2016 2017 2016 2017 Ma
Slide 20: Free Cash Flow
Free Cash Flow Free cash flow affected by acquisition and increase in net working capital CHF million 2017 2016 In 2017, free cash flow was affected Net profit 13.3 42.7 mainly by the acquisition of SSM (CHF-100.2 million) and increase in Interest expense (net) 1.8 2.6 net working capital Tax expens
Slide 21: Changes in Workforce
Changes in Workforce Increase in workforce mainly as a result of the acquisition of SSM Temporaries • SSM workforce of 256 employees in % 11.3% 11.1% 12.3% included in 2017 FTE1 5 982 • Without SSM, the permanent workforce 6000 5 727 5 649 reduced marginally to 4 990 736 650 627 5000 4000 3000 5 077
Slide 22: Agenda
Agenda 1. Highlights 2017 Dr. Norbert Klapper 2. Financial results 2017 Joris Gröflin 3. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2017, Media and Investor Presentation, March 13, 2018 22
Slide 23: Focus 2018
Focus 2018 Rieter remains focused on STEP UP priorities • Innovation: Product launches in 2018, extend digital offering, strong focus on ITMA Barcelona 2019 • After Sales: Achieve sales target in 2018 of CHF 166 million • Profitability: Ingolstadt (Germany) implementation of production transfer, Win
Slide 24: Strategic focus – mid-term targets
Strategic focus – mid-term targets Sales Sales growth above market EBIT margin1 ~10% RONA2 ~14% Target pay-out ratio of at least Dividend policy 40% of net profits 1 At sales of ~1.3 CHF bn 2 RONA is calculated as net result before interest costs and write-off of financial assets divided by net asse
Slide 25: Outlook
Outlook • In the first two months, demand has been on a stable level. Rieter expects this momentum to continue. • With a stronger second semester, Rieter expects sales and profitability for 2018 to be above the level of 2017 (before restructuring charges). • In the first semester of 2018, EBIT and n
Slide 26: 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 27: Appendix
Appendix Results 2017, Media and Investor Presentation, March 13, 2018 27
Slide 28: Values and Principles
Values and Principles Results 2017, Media and Investor Presentation, March 13, 2018 28
Slide 29: Group Executive Committee
Group Executive Committee Dr. Norbert Klapper Serge Entleitner Jan Siebert Carsten Liske Joris Gröflin Thomas Anwander Chief Executive Officer Head Business Group Head Business Group Head Business Group Chief Financial Officer General Counsel and Components Machines & Systems After Sales Company Sec
Slide 30: Board of Directors
Board of Directors Michael Pieper Bernhard Jucker Hans-Peter Schwald Carl Illi Member of the BoD Chairman of the BoD Member of the BoD Member of the BoD Chairman of the SC Member of the AC/NC/RC Member of the AC/SC Member of the NC/RC Peter Spuhler This E. Schneider Roger Baillod Luc Tack Member of
Slide 31: Key Data per Share
Key Data per Share Rieter registered shares of CHF 5 nominal value Bloomberg: RIEN SW; Thompson Reuters: RIEN.S 31/12/2017 30/06/2017 31/12/2016 Shares outstanding excl. own shares 4 524 754 4 528 326 4 515 015 (end of period) Average shares (of period) 4 524 273 4 523 565 4 515 861 Share price (end
Slide 32: Profitability Improvement Mid-Term: 10% EBIT
Profitability Improvement Mid-Term: 10% EBIT STEP UP initiatives address profitability improvement FY HY2 HY1 FY CHF million 2017 2017 2017 2016 Sales 965.6 550.4 415.2 945.0 Group EBIT (b.r.c.) 51.8 35.8 16.0 56.5 EBIT margin (of sales) 5.4% 6.5% 3.9% 6.0% Sales 589.5 334.4 255.1 603.4 Ingolstadt r
Slide 33: Return on Net Assets (RONA)
Return on Net Assets (RONA) RONA of 3.0% after restructuring charges CHF million 31/12/2017 31/12/2016 2017 Change Non-current assets 450.0 344.3 105.7 Inventories and receivables 353.8 281.2 72.6 Liquid funds 244.4 372.6 -128.2 Total assets 1 048.2 998.1 50.1 Non-current liabilities (excl. debt) -1
Slide 34: Profitability Improvement Mid-Term: 14% RONA
Profitability Improvement Mid-Term: 14% RONA Continued reduction of net assets – HY2 impacted by restructuring charges • Reduction of net working capital Net profit by half-year • Sale of non-core assets (before interest cost/CHF million) • Investments below D&A level 60 HY2 2014 50 HY2 2016 13.7% 1
Slide 35: Winterthur Site Development
Winterthur Site Development New facility with customer and innovation center, assembly, administration • Rieter intends to create a modern location in Winterthur on around 30 000 m2 • October 2017: Rieter launched a study contract and awarded this to five renowned Swiss architects • March 2018: Firm