Rieter Holding Ag · SIX:RIEN
Rieter — H1 2012 Earnings Presentation
49 slides from Rieter's earnings presentation, Jul 25, 2012
Slide 1: Rieter Holding Investor presentation – 2012 Half-year results
Rieter Holding Investor presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 – Half-year results . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Summary of first half year 2012 3. Financial results first half year 2012 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentation – 2012 half year results 2
Slide 3: 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 4: 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 5: 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 6: 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 7: Expansion in Asia: Markets by geography
Expansion in Asia: Markets by geography Markets in India and China will continue to drive growth Spindle equivalents (shipments) - in million 19 18.2 18 16.9 16.9 17 China Future growth drivers 16 India 15.1 15.2 15 14 RoW • Growing fibre demand 10.1 12.4 13 calls for additional 12 9.5 11 10.4 11.6
Slide 8: 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 9: 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 10: 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 11: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Summary of first half year 2012 3. Financial results first half year 2012 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentation – 2012 half year results 11
Slide 12: HY1 2012: Key messages
HY1 2012: Key messages “In a challenging first semester 2012 Rieter succeeded to improve its market position and at the same time to push forward the investment program according to plan.” Erwin Stoller Executive Chairman Rieter Holding investor presentation – 2012 half year results 12
Slide 13: Rieter – Highlights HY1 2012
Rieter – Highlights HY1 2012 Slight improvement in market conditions, investment program on track • Slight improvement of market environment with stabilizing spinning mills margins Market • Indian market still depressed in the south but in the north improving, China, Turkey and development other lar
Slide 14: Market development
Market development Slight improvement despite still subdued demand especially in India • Spinning mill margin has been improving since August 2011, but downstream buying behaviour very volatile as raw material prices have shown a negative trend and demand for textiles especially in Europe has been d
Slide 15: 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 16: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Summary of first half year 2012 3. Financial results first half year 2012 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentation – 2012 half year results 16
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 24: 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 million
Slide 25: 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 26: 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 27: 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 28: Agenda
Agenda 1. Introduction and strategy of Rieter 2. Summary of first half year 2012 3. Financial results first half year 2012 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentation – 2012 half year results 28
Slide 29: Summary
Summary Rieter: Good progress with strategic projects in a steady half year • Market position improved • Higher order intake than in the second half of 2011 • Lower sales, as expected • Profitability reduced by lower volumes and the investment program • Investment program 2012/2013 on track Rieter H
Slide 30: 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 31: 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 32: Agenda 2012
Agenda 2012 HY1 2012 results publication / conference call: July 25, 2012 Analyst briefing: October 31, 2012 Contact: Media: Investor relations: Erwin Stoller Joris Gröflin Executive Chairman Chief Financial Officer T: +41 52 208 70 32 T: +41 52 208 70 15 [email protected] [email protected] Rieter
Slide 33: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rieter Holding investor presentation – 2012 half year results 33
Slide 34: 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 Rieter Efficient cycle Leading market management and positions value creation Technology and innovation leadership Rieter Holding investor presentation –
Slide 35: Rieter today – At a glance
Rieter today – 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
Slide 36: Long-term growth industry
Long-term growth industry Textile Business will keep on growing – short staple as largest segment World population and fiber consumption growth 92 57 9 9 13 6 7 2 2 3 3 3 1900 1950 2002 2016 World population (billion) Short staple (cotton, viscose, synthetic) Per-capita consumption (kg/p) Non-wovens
Slide 37: 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 38: Fibre consumption by type
Fibre consumption by type Rieter covers both man-made and natural fibers in short staple segment 100% 100% Synthetic Non-Wovens / 8% Non-Wovens 15% Cotton etc. Non-spun Technical 17% Textiles Filament Synthetic 33% Yarns Long Staple Wool, Jute etc. 7% Yarns 75% Knitted / Woven Cotton Short Staple Vi
Slide 39: Fibre processes in short-staple spinning
Fibre processes in short-staple spinning Fibre (-mix) used in short staple spinning depends on final application Cotton (65-75%) Spinning • Preparation • Weaving / Viscose Knitting • Ring fibers • Finishing • Compact (5-10%) • Ready- • Rotor • Airjet made clothing Synthetic fibers (25-30%) Rieter Ho
Slide 40: Innovation: Focus examples SYS
Innovation: Focus examples SYS Spinning preparation: keep quality at higher productivity Example: Card Example: Comber C 70 C 60 % E 80 E 76 % Introduction 2011 2008 2012 2007 Largest active Technical Largest active 1.5m combing area + 500 nips/min solution carding area technology 45% Max. 280 kg/h
Slide 41: Management team and Board of Directors
Management team and Board of Directors Board of Directors Erwin Stoller, Chairman This E. Schneider, Dieter Spälti, Jakob Baer, Michael Pieper, Hans-Peter Schwald, Peter Spuhler Executive Chairman of the Board Erwin Stoller General Counsel Thomas Anwander Spun Yarn Systems (SYS) Premium Textile Chie
Slide 42: Order intake development
Order intake development Order intake decline in both Business Groups CHF million 671 -220 -42 404 -5 -0 In local currencies Orders Spun Yarn Premium Divestment Currency Orders received Systems Textile translation received HY1 2011 Components effect HY1 2012 Main exchange rates in CHF: HY1 2012: EUR
Slide 43: Sales development
Sales development Sales decrease at similar level in both Business Groups CHF million 538 -21 487 -23 -5 -2 In local currencies Sales Spun Yarn Premium Divestment Currency Sales HY1 2011 Systems Textile translation HY1 2012 Components effect Main exchange rates in CHF: HY1 2012: EUR = 1.20 USD = 0.9
Slide 44: Capital expenditures
Capital expenditures Capital expenditures mainly driven by investment program • Investment projects account for approximately 2/3 of total capital CHF million expenditures mainly into expansion China and India as well as into process 70 improvements 60 • Maintenance capital expenditure at 2.0% of co
Slide 45: Net working capital
Net working capital Net working capital increases in HY1 2012 to 85.2 million CHF • Corporate output decrease leads to 30.06. 31.12. 30.06. reduction of inventories by 26.1 million CHF million 2012 2011 2011 CHF Inventories 208.7 234.8 251.0 • Net working capital increases seasonally due to high sal
Slide 46: Net liquidity
Net liquidity Net liquidity impacted by free cash flow and dividends CHF million 159 37 22 28 8 107 Free cash flow: -15.5 million CHF Net liquidity Free cash Divestments Dividends Other Net liquidity 31.12.2011 flow before 30.06.2012 divestments Rieter Holding investor presentation – 2012 half year
Slide 47: Values and principles
Values and principles Comfort thanks to Rieter Delight Enjoy your Fight for your work profits customers Rieter is a publicly listed Swiss industrial group providing innovative solutions to the global textile industry. Rieter Holding investor presentation – 2012 half year results 47
Slide 48: 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 49: Key Data per Share
Key Data per Share Rieter registered shares of 5 CHF nominal value 30.06.2012 31.12.2011 30.06.2011 Bloomberg: RIEN; Reuters: RITZn Shares outstanding excl. own shares 4‘583‘544 4‘629‘335 4‘629‘445 (end of period) Average shares (of period) 4‘616‘917 4‘625‘281 4‘621‘782 Share price (end of period) C