Rieter Posts 11% Increase in FY2018 Sales

The Rieter Group increased their sales in 2018 by 11% over the previous year to CHF 1,075.2 million.

Sales increased thanks to organic growth in the Business Group Machines & Systems. The acquisition of SSM Textile Machinery in the Business Group Components supported this positive development. The Business Groups After Sales and Components were able to maintain previous year’s levels of sales despite weaker market dynamics during the second semester of 2018.

2018 sales in Asian countries (excluding China, India and Turkey) increased by 36% to CHF 433.9 million, of which Uzbekistan contributed CHF 144.1 million. Sales in China fell 19% to CHF 148.6 million. With the phasing-out of the subsidy program in the western province of Xinjiang, demand for machinery declined. Sales in India dropped 16% to CHF 146.2 million. In Turkey, Rieter achieved sales of CHF 154.8 million (up 55%) in a difficult market environment, thanks to the introduction of new ring and compact spinning machines. Sales in North and South Americas decreased by 5% to CHF 108.6 million, while those in the European region increased by 3% to CHF 47.3 million. Sales in the African region climbed 29% to CHF 35.8 million.

As a result of a weak market environment, the order intake fell 17% to CHF 868.8 million. The Business Group Machines & Systems posted a 30% drop to CHF 468.3 million. Demand in new machinery business was characterized by uncertainties in Asia and Turkey, as well as the tense financing situation for emerging market customers. Both factors had a negative impact on investment sentiments in the spinning industry. This was especially evident in the fourth quarter of 2018, which with an order intake of CHF 34.9 million was very weak in all regions.

The Business Group Components achieved an order intake of CHF 260.1 million, around 14% above the previous year (excluding acquisition, down 6%). Due to weaker macroeconomic conditions, the order intake in the fourth quarter of 2018 amounted to CHF 55.0 million, which was lower than in previous quarters. The decline can be attributed to low propensity for investments.

The Business Group After Sales recorded a 9% decline in order intake to CHF 140.4 million. An order intake of CHF 29.1 million in the fourth quarter of 2018 was lower than in previous quarters. This is due in particular to the lower order intake for installation services for new machines.

The order backlog amounted to about CHF 325 million at the end of 2018, as compared with about CHF 540 million at the end of 2017. Accordingly, Rieter is planning capacity adjustments and cost reduction measures.

Rieter expects an EBIT margin of around 4% and net profits of around 3% of sales. Net liquidity increased to CHF 150.3 million from CHF 130.5 million a year ago.