Rieter Holding Ag · SIX:RIEN
Rieter — FY2013 Earnings Presentation
46 slides from Rieter's earnings presentation, Mar 18, 2014
Slide 1: Results 2013
Results 2013 . . . ./ investor Media . . . presentation, . . . . 18th . . March . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Norbert Klapper, Group CEO . . .Gröflin, Joris . Group . CFO. . . . . . . . . . . . . . . . . . . . 1
Slide 2: Agenda
Agenda 1. Introduction and summary of 2013 Dr. Norbert Klapper 2. Financial results 2013 Joris Gröflin 3. A view on Rieter Dr. Norbert Klapper 4. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2013 - Media / investor pres
Slide 3: 2013: Key messages today
2013: Key messages today “Rieter has leveraged its strong market position in a more dynamic market environment and has largely completed its investment program. Thanks to higher sales, profitability and increasing free cash flows, Rieter increases the cash dividend – a dividend of 3.50 CHF per share
Slide 4: Rieter – Highlights 2013
Rieter – Highlights 2013 Significant increase in orders and sales – higher profitability and dividend • Continued positive spinning mill margins led to broad-based willingness to invest Market • Substantial orders booked in Turkey, other Asian countries and US development • Chinese market strong in
Slide 5: Rieter – Investment program 2012 / 2013
Rieter – Investment program 2012 / 2013 Investment program largely completed 2012 2013 2014 Expansion in Asia • Inauguration of first • Completion of plant II • Full additional stage of second plant in in Changzhou production capacity Changzhou (China) available • Ramp-up of second • Construction of
Slide 6: Agenda
Agenda 1. Introduction and summary of 2013 Dr. Norbert Klapper 2. Financial results 2013 Joris Gröflin 3. A view on Rieter Dr. Norbert Klapper 4. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2013 - Media / investor pres
Slide 7: Rieter – Financial highlights 2013
Rieter – Financial highlights 2013 Higher sales, profitability and free cash flow – dividend of 3.50 CHF per share • Order intake of 1’259.4 million CHF was 50% higher than 2012 Orders received • Order backlog at around 765 million CHF • By around 17% higher sales at 1’035.3 million CHF. Increase by
Slide 8: Rieter – Financial key figures
Rieter – Financial key figures Substantial improvement of profitability supported by higher sales CHF million FY 2013 HY2 2013 HY1 2013 FY 2012 Order Intake 1‘259.4 548.0 711.4 839.7 Sales 1‘035.3 557.2 478.1 888.5 EBITDA (1) 95.2 60.9 34.3 65.9 EBIT (1) 60.2 43.1 17.1 32.7 EBIT margin (of sales) 5.
Slide 9: Orders by business group
Orders by business group 50% higher orders than 2012 driven by HY1 • Year-on-year increase driven by Spun CHF million Yarn Systems 800 • SYS: + 56% (local currency + 57%) 711 700 • PTC: + 21% (local currency + 21%) 89 • Order backlog at around 765 million 600 548 CHF at year-end (2012: around 550 50
Slide 10: Sales by business group
Sales by business group Sales increased by around 17% against 2012 to 1’035.3 million CHF • Increase in both business groups • SYS: + 18% (local currency + 19%) CHF million 700 • PTC: + 10% (local currency + 10%) +17% 600 557 • Increase in HY2 due to increased and 500 487 478 92 modernized capacitie
Slide 11: Sales development by region
Sales development by region Growth in all areas except Europe in 2013 CHF • Sales growth in absolute terms million widely spread over all main regions Other Asian 259 +16% countries 224 • Higher sales to other Asian countries reflect increase of 223 demand in HY1 13 China 193 +16% • Share of sales t
Slide 12: Operating result (EBIT)
Operating result (EBIT) EBIT margin increased to 5.8% In % of • EBIT increased by 84% to 60.2 million CHF in 2013 sales 3.7% 5.8% (incl. strategic projects costs: of 23.7 million CHF) CHF million • Profitability mainly impacted by 90 +84% • Continued volume increase in the more 80 profitable compone
Slide 13: Net profit and RONA
Net profit and RONA Net profit margin increase to 3.6% thanks to better operating result In % of • Financial result mainly impacted by interest cost on sales 2.9% 3.6% 2015 bond and revaluation gain of 5.2 million CHF CHF million from minority investors put option • Disposal of equity interests cont
Slide 14: Changes in workforce
Changes in workforce Total workforce increased by 5% despite sales increase of around 17% Temporaries • Higher volumes managed with in % 19.8% 17.2% 20.2% additional temporary personnel and FTE1) higher productivity +5% • Structural cost reduction program 7000 ongoing 5852 6003 6000 5705 1157 985 12
Slide 15: Balance sheet
Balance sheet Net liquidity increases to 141.3 million CHF and equity ratio stable at 35% • Net liquidity of 141.3 million CHF mainly 31.12. 30.06. 31.12. impacted by positive free cash flow of CHF million 2013 2013 2012 61.1 million CHF thanks to strong improvement of net working capital Total asse
Slide 16: Net working capital
Net working capital Significant decrease of net working capital to 14.7 million CHF • Inventories reduction since HY1 2013 31.12. 30.06. 31.12. despite higher sales CHF million 2013 2013 2012 • Significant increase of advance Inventories 233.0 248.4 229.3 payments from customers thanks to higher ord
Slide 17: Capital expenditures
Capital expenditures Capital expenditures drop 33% and are mainly driven by investment program • Capital expenditure for investment program 2013 amounts to 35.7 million CHF million CHF (2012: 51.6 million CHF) 90 -33% • Maintenance capital expenditure at 19.3 82 million CHF (1.9% of sales), which is
Slide 18: Free cash flow
Free cash flow Strong free cash flow of 61.1 million CHF despite high investments • Positive free cash flow of 61.1 million CHF million 2013 2012 CHF (2012: -32.3 million CHF) Net profit 37.4 25.7 • Main impact on free cash flow from net working capital improvement and high Interest and tax expense
Slide 19: Agenda
Agenda 1. Introduction and summary of 2013 Dr. Norbert Klapper 2. Financial results 2013 Joris Gröflin 3. A view on Rieter Dr. Norbert Klapper 4. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2013 - Media / investor pres
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 Resul
Slide 21: 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 18.2 18.5 • Positive spinning mill China 16.9 16.9 margins (conversion 15 India 15.1 15.2 14.2 between raw mate
Slide 22: 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 23: Broadest global systems supplier
2 – Broadest global systems supplier 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 Resul
Slide 24: Leading market positions with global footprint
3 – Leading market positions with global footprint Market leadership in the import segment, still potential in the local segment Market position 2013 Product group Segment Machinery Components (SYS) (PTC) Spinning Import 1 1 preparation Local 3 3 Ring Import 1 1 spinning Local 4 3 Compact Import 1 1
Slide 25: 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% 2% 1.000 151 870 889 223 China Rest of Asia 800 103
Slide 26: 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 27: Efficient cycle management and value creation
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 28: 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 29: Agenda
Agenda 1. Introduction and summary of 2013 Dr. Norbert Klapper 2. Financial results 2013 Joris Gröflin 3. A view on Rieter Dr. Norbert Klapper 4. Outlook Dr. Norbert Klapper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2013 - Media / investor pres
Slide 30: Targets 2014
Targets 2014 • Customer Focus! • Process order backlog to the satisfaction of our customers • Ensure an executable and profitable order intake • Finalize investment programs • India and China: Completed • Processes: Finish improvements • Airjet spinning: Continue market introduction • Leverage inves
Slide 31: Outlook 2014
Outlook 2014 • With broadly based business worldwide, Rieter has seen a good demand for textile machinery and components in the first two months of 2014. Demand depends among other factors on the development of yarn and raw materials prices, currency exchange rates, financing costs, and global consu
Slide 32: Targets over the cycle
Targets 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 sales Target pay-out ratio of Dividend policy approx. 30% of net result Results 2013 - Media / inve
Slide 33: 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 34: Agenda 2014
Agenda 2014 Full year 2013 results analyst presentation / conference call: March 18, 2014, 2 p.m. CET Annual General Meeting: April 09, 2014 HY1 2014 results publication: July 23, 2014 Contact: Investor relations: Media: Joris Gröflin Cornelia Schreier Chief Financial Officer Head Corporate Communic
Slide 35: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2013 - Media / investor presentation, 18th March 2014 35
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: Net liquidity
Net liquidity Net liquidity positively impacted by free cash CHF million 1 -12 141 -4 60 96 Free cash flow: +61.1 million CHF Net liquidity Free cash Divestments Dividends Other Net liquidity 31.12.2012 flow before 31.12.2013 divestments Results 2013 - Media / investor presentation, 18th March 2014
Slide 38: Order intake development and currency impact
Order intake development and currency impact Order intake mainly driven by Spun Yarn System volume increase CHF million 1.259 30 -7 397 840 In local currencies Orders Spun Yarn Premium Currency Orders Received 2012 Systems Textile effects Received 2013 Components Results 2013 - Media / investor pres
Slide 39: Sales development and currency impact
Sales development and currency impact Increase in both business groups driven by volume CHF million -5 1.035 16 889 135 In local currencies Sales 2012 Spun Yarn Premium Currency Sales 2013 Systems Textile effects Components Results 2013 - Media / investor presentation, 18th March 2014 39
Slide 40: 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 41: Full-liner: Rieter offers full systems
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 Results 2013 - Media / investor presentation, 18th March 2014 41
Slide 42: 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 43: Rieter's market: Impact of macro trends on growth
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 gains •
Slide 44: 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 45: Values and principles
Values and principles Results 2013 - Media / investor presentation, 18th March 2014 45
Slide 46: Key data per share
Key data per share Rieter registered shares of 5 CHF nominal value 31.12.2013 30.06.2013 31.12.2012 Bloomberg: RIEN; Reuters: RITZn Shares outstanding excl. own shares 4‘586‘711 4‘575‘004 4‘621‘425 (end of period) Average shares (of period) 4‘602‘652 4‘617‘076 4‘609‘778 Share price (end of period) C