Rieter Holding Ag · SIX:RIEN
Rieter — FY2012 Earnings Presentation
48 slides from Rieter's earnings presentation, Mar 21, 2013
Slide 1: Results 2012 Media / investor presentation
Results 2012 Media / investor presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 2: Agenda
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 2
Slide 3: 2012: Key messages today
2012: Key messages today “Rieter has strengthened its market position in a challenging market environment and is on track with its investment program. Despite cyclically weaker sales and lower profitability, Rieter continues the policy of paying cash dividends – a dividend of 2.50 CHF per share has
Slide 4: Rieter – Highlights 2012
Rieter – Highlights 2012 Market position strengthened – investment program on track • Market environment improved slightly with stabilized positive spinning mills margins Market • Indian market improved in the north, Turkey and other large markets improved slightly, development China was still hesit
Slide 5: Agenda
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 5
Slide 6: Financial Results 2012
Financial Results 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 7: Rieter – Financial highlights 2012
Rieter – Financial highlights 2012 Lower sales and EBIT as expected – dividend of 2.50 CHF per share • Order intake in 2012 of 839.7 million CHF with improvement in second half-year Orders received • Order backlog at around 550 million CHF • Sales were lower by 16% at 888.5 million CHF with weaker s
Slide 8: Rieter – Financial key figures
Rieter – Financial key figures Book-to-bill ratio turned positive in second semester of 2012 CHF million FY 2012 HY2 2012 HY1 2012 FY 2011 Order Intake (1) 839.7 435.6 404.1 958.3 Sales 888.5 401.2 487.3 1060.8 EBITDA 66.8 18.7 48.1 146.5 EBIT (2) 33.6 1.6 32.0 112.6 EBIT margin (of sales) 3.8% 0.4%
Slide 9: Orders by business group
Orders by business group 12% lower orders received than 2011, but HY2 up 8% versus HY1 2012 • Orders received included cancelations CHF million of 60 million CHF 700 671 • Decline in FY 2012 less pronounced at Spun Yarn Systems 600 118 SYS: -10% (local currency -11%) +8% PTC: -21% (local currency -2
Slide 10: Sales by business group
Sales by business group Sales declining by 16% to 888.5 million CHF with lower second half-year 2012 • Decline in both business groups: CHF million SYS: -16% (local currency -16%) -16% PTC: -19% (local currency -18%) 1.100 1.061 • Downturn more pronounced in the 1.000 199 889 second half of 2012 900
Slide 11: Sales development by region
Sales development by region Sales increase in China helped to mitigate cyclical decline in sales • Substantial increase in sales to China -13% +27% -19% -45% -27% -28% +31% CHF million • Share of sales to China increased to 21.7% (2011: 14.2%) 300 • Lower sales to main markets India and 256 Turkey 2
Slide 12: Operating result (EBIT)
Operating result (EBIT) EBIT margin decreased to 3.8% In % of 10.6% 3.8% • EBIT decreased by 70% to 33.6 million CHF in sales 2012 (incl. Strategic projects cost: - 56%) CHF million -56% • Profitability mainly impacted by 140 135 • Continued volume decrease in the profitable 22 components business (
Slide 13: Net profit (continued operations) and RONA
Net profit (continued operations) and RONA Net profit margin at 3.0% despite strong EBIT decrease In % of 11.2% 3.0% • Sale of LMW and LRT shares contributed 17.6 sales million CHF (2011: 47.3 million CHF) to net profit CHF million from continued operations 140 • Financial result mainly impacted by
Slide 14: Changes in workforce
Changes in workforce Total workforce reduced by 3% through reduction in temporaries Temporaries 28.2% 19.8% 17.2% • Decrease in sales has been followed by in % reduction of workforce in particular FTE1) through significantly lower temporaries 7.000 • Disposal of Czech production facilities -3% reduc
Slide 15: Balance sheet
Balance sheet Net liquidity decrease to 95.6 million CHF and equity ratio stable at 35% • Net liquidity of 95.6 million CHF mainly 31.12. 30.06. 31.12. impacted by negative free cash flow of CHF million 2012 2012 2011 -32.3 million CHF and dividend of -27.7 million CHF paid out in April 2012 Total a
Slide 16: Net working capital
Net working capital Net working capital with slight increase to 62.0 million CHF • Postponements of deliveries led to 31.12. 30.06. 31.12. higher inventories at year-end CHF million 2012 2012 2011 • Significant reduction of trade Inventories 229.3 208.7 234.8 receivables compared to half-year 2012 •
Slide 17: Capital expenditures
Capital expenditures Capital expenditures mainly driven by expansion in China and India • Capital expenditure for investment program 2012 / 2013 amounts to 51.6 CHF million million CHF +42% 90 • Maintenance capital expenditure at 30.0 81 million CHF (3.4% of sales) 80 70 19 60 57 50 10 40 30 26 63 5
Slide 18: Free cash flow (continuing operations)
Free cash flow (continuing operations) Free cash flow of -32.3 million CHF as a result of high investments • Negative free cash flow of -32.3 million CHF million 2012 2011 CHF (2011: 79.5 million CHF) Net profit 26.5 119.0 • Further sale of LMW and LRT shares and divestment of Czech production Inter
Slide 19: Spun Yarn Systems 2012
Spun Yarn Systems 2012 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 20: Spun Yarn Systems: Sales
Spun Yarn Systems: Sales Cyclical decrease of sales by 16% • Sales declined by 16% mainly in the second half-year due to CHF million -16% • Lower order intake in the first 900 862 semester 800 • Postponement of deliveries into 728 2013 700 674 600 500 400 300 200 100 0 2010 2011 2012 Results 2012 20
Slide 21: Spun Yarn Systems: Operating result (EBIT)
Spun Yarn Systems: Operating result (EBIT) EBIT decreased to 30.5 million CHF or 4.2% of sales In % of 6.3% 9.4% 4.2% • EBIT declined to 30.5 million CHF sales CHF million • Main drivers for decline were lower volume, a product mix with less 90 -62% favorable margins and lower spare parts 81 sales 8
Slide 22: Premium Textile Components 2012
Premium Textile Components 2012 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 23: Premium Textile Components: Sales
Premium Textile Components: Sales Sales decrease mainly due to lower third-party demand • Sales declined by 19% to 160.9 million CHF, as demand declined cyclically CHF million from textile machinery manufacturers and for retrofit business 250 • Business with spinning mills wear & tear -19% parts dev
Slide 24: Premium Textile Components: Operating result (EBIT)
Premium Textile Components: Operating result (EBIT) Volume-driven profitability decrease In % of segment 12.4% 13.3% 6.9% • EBIT declined to 16.0 million CHF sales CHF million • Main drivers for decline were lower volume, lower proportion of high-margin 40 -54% products and strategic project costs 3
Slide 25: Agenda
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 25
Slide 26: Rieter – Strategic intent
Rieter – Strategic intent Strategic intent Organic growth / growth by acquisitions • Stay No. 1 in the import segment, become at least No. 2 in the local segment • Strengthen position in China and India • Close product gaps through innovation and external opportunities Innovation • Improve yarn qual
Slide 27: 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: ~ 140 million CHF • Innovation: Driving innovation,
Slide 28: 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 2010 – 2012, Rieter sales in Mio CHF (spindle equivalents) in % 1.200 Europe Africa 1.060 Americas 6% 2% 1.000 151 870 889 7% 800 103 175 193 China 146 209 9
Slide 29: Expansion in Asia: Addressing growth potential
Expansion in Asia: Addressing growth potential Increase in locally available product portfolio to address growth potential Preparation Ring/ Rotor Rotor Roving Air-Jet Comfort (semi) (Auto) Blowroom Card Drawframe Comber Available local capacity in China / India 2011 2014 Results 2012 29
Slide 30: Strategy implementation: Innovation – example (1/2)
Strategy implementation: Innovation – example (1/2) Combing: Rieter set in 2012 again the benchmark with the highly flexible E 80 -30% Comber E 80 Quality: 90 100 Irregularities (IPI %) 70 +50% Productivity: Tons / day per 150 127 100 comber (indexed) +150 Yield: Raw material saving 150 per year in
Slide 31: Strategy implementation: Innovation – example (2/2)
Strategy implementation: Innovation – example (2/2) Combing: Rieter constantly reduces energy consumption Comber E80 500 nips/min, 84 kg/h: 3.7 kWh = 44 kW/ton combed sliver Results 2012 31
Slide 32: Rieter – progress investment program 2012 / 2013
Rieter – progress investment program 2012 / 2013 Investment program on track – half-way milestones passed 2012 2013 2014 Expansion in Asia • Inauguration of first • Completion of plant II stage of second plant in in Changzhou Changzhou (China) • Ramp-up of second • Full additional • Construction of
Slide 33: Strategy implementation: Maintain break-even focus
Strategy implementation: Maintain break-even focus Measures to increase profitability have been initiated • Reduce break-even after conclusion of investment program 2012 / 2013: • Reduction of global workforce by 5% over the next 24 months predominantly in Switzerland through • Natural fluctuation •
Slide 34: 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 sales Target pay-out ratio of Dividend policy approx. 30% of net result Results 2012 34
Slide 35: Agenda
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 35
Slide 36: 2013 Outlook
2013 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 37: Summary 2012
Summary 2012 Rieter: Market position strengthened in a weaker market environment • Market position improved – third half-year in a row with increasing order intake • Lower sales in 2012, as expected • Profitability reduced by lower volumes, product mix and margins and the investment program • Invest
Slide 38: Outlook 2013
Outlook 2013 • Rieter business activities are broadly based worldwide. Heterogeneous market development is expected for 2013. Market development depends amongst other factors also on currency exchange rate developments, consumer sentiment in Europe and North America, fiber consumption growth in Asia
Slide 39: Agenda 2013
Agenda 2013 Full year 2012 results analyst presentation / conference call: March 21, 2013, 2 p.m. CET Annual General Meeting: April 18, 2013 HY1 2013 results publication: July 25, 2013 Contact: Investor relations: Media: Joris Gröflin Cornelia Schreier Chief Financial Officer Head Corporate Communic
Slide 40: Appendix
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 40
Slide 41: 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 42: 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 43: Order intake development and currency impact
Order intake development and currency impact Decline in both business groups due to lower volumes CHF million 958 -84 840 -36 2 In local currencies Orders Spun Yarn Premium Currency Orders Received 2011 Systems Textile effects Received 2012 Components Results 2012 43
Slide 44: Sales development and currency impact
Sales development and currency impact Decline in both business groups driven by volume CHF million 1.061 -140 4 889 -36 In local currencies Sales 2011 Spun Yarn Premium Currency Sales 2012 Systems Textile effects Components Results 2012 44
Slide 45: Net liquidity
Net liquidity Net liquidity impacted by free cash flow and dividends CHF million 159 -67 35 -28 96 -3 Free cash flow: -32.3 million CHF Net liquidity Free cash Divestments Dividends Other Net liquidity 31.12.2011 flow before 31.12.2012 divestments Results 2012 45
Slide 46: 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 47: Values and principles
Values and principles Results 2012 47
Slide 48: Key data per share
Key data per share Rieter registered shares of 5 CHF nominal value 31.12.2012 30.06.2012 31.12.2011 Bloomberg: RIEN; Reuters: RITZn Shares outstanding excl. own shares 4‘621‘425 4‘583‘544 4‘629‘335 (end of period) Average shares (of period) 4‘609‘778 4‘616‘917 4‘625‘281 Share price (end of period) C