WINTERTHUR, Switzerland — July 18, 2024 — In the first half of 2024, the Rieter Group posted an order intake of 403.4 million Swiss francs ($438 million) (first half of 2023: 325.0 million Swiss francs ($353 million), which represents a significant increase of 24 percent compared with the same period of the previous year. Sales were 421.0 million Swiss francs ($457 million) (first half of 2023: 758.2 million Swiss francs ($822.7 million)). As expected, this was 44-percent lower than the previous year.
In a challenging business environment, Rieter achieved an EBIT margin of 2.1 percent thanks to strict cost management. The systematic implementation of the “Next Level” performance program led to a strengthening of profitability. Rieter recorded a profit at the EBIT level of 8.9 million Swiss francs ($9.7 million) in the first half of 2024 (first half of 2023: 25.2 million Swiss francs ($27.4 million)). The reduction of the cost base particularly in research and development as well as selling and administrative expenses contributed to this positive result.
Order intake
In line with expectations, the order intake of 403.4 million Swiss francs ($438 million) in the first half of 2024 was significantly higher than in the same period of the previous year (first half of 2023: 325.0 million Swiss francs ($353 million)). The increase in demand for new machines in the Business Group Machines & Systems contributed to this positive development. Orders came mainly from China, India, and Türkiye. At the same time, demand for consumables, wear & tear and spare parts declined slightly due to continued weak demand for textiles.
Sales by business group
Sales in the Business Group Machines & Systems decreased by 62 percent to 198.7 million Swiss francs ($216 million )and in the Business Group Components by 12 percent to 126.5 million Swiss francs ($137 million). The decline in sales in both business groups is a consequence of the low order intake in 2023. In contrast, sales in the Business Group After Sales increased by 4 percent year-on-year to 95.8 million Swiss francs ($140 million). Growth was achieved through an increase in installation services and sales of engineered solutions. Demand for consumables, wear & tear and spare parts will depend on spinning mill capacity utilization in the months ahead. Rieter expects the global increase in spinning mill capacity to have a positive impact on volumes in the second half of 2024.
Order backlog
On June 30, 2024, the company had an order backlog of around 640 million Swiss francs ($695 million) (first half of 2023: around 1,100 million Swiss francs ($1,195 million)). This corresponds to a similar level at the end of 2023.
EBIT, net result and free cash flow
In the first half of 2024, Rieter posted a profit of 8.9 million Swiss francs($9.7 million) at the EBIT level, with an EBIT margin of 2.1 percent (first half of 2023: 25.2 million Swiss francs ($27.3 million)) and a net result of 1.7 million Swiss francs ($1.8 million) (first half of 2023: 13.3 million Swiss francs ($14.4 million)). The decrease is due to the lower sales volume in the 2024 financial year.
In the first half of 2024, free cash flow was -1.1 million Swiss francs ($-1.2 million) (first half of 2023: 10.0 million Swiss francs ($10.9 million)). The negative free cash flow was mainly due to cash outflows related to the settlement of provisions for the “Next Level” performance program.
Significant cost reductions as a result of the “Next Level” performance program
Rieter is working intensively on the implementation of the measures set out in the “Next Level” performance program. The optimization of overhead structures and the adjustment of production capacities were successfully implemented according to plan. Thanks to strict cost management, EBIT was positive despite the fact that sales were lower than forecast in the “low” scenario.
The transfer of resources and responsibilities to India and China is on track, enabling the key markets to respond more effectively to customer needs and cycles in the machinery business.
Rieter continues to pursue growth in the after sales and components business in order to achieve a more balanced mix between the business groups in the medium term.
Outlook for the full year 2024 specified
The markets remained under pressure from the economic slowdown, high inflation rates and noticeably dampened consumer sentiment. The first signs of a recovery in financial year 2024 have emerged in the key markets of China and India. Rieter expects demand to pick up further in the coming months.
For the full year 2024, Rieter anticipates sales in the range of 900 million ($977 million) to 1 billion ($1.1 billion) and a positive EBIT margin of 2 to 4 percent.
Order Intake by Business Group
| ORDER INTAKE CHF MILLION |
JANUARY – JUNE 2023 | JANUARY – JUNE 2024 | DIFFERENCE | DIFFERENCE IN LOCAL CURRENCY |
| Rieter | 325.0 | 403.4 | 24% | 29% |
| Machines & Systems | 111.4 | 211.5 | 90% | 98% |
| Components | 131.0 | 117.6 | -10% | -8% |
| After Sales | 82.6 | 74.3 | -10% | -6% |
Sales by Business Groups
| SALES CHF MILLION |
JANUARY – JUNE 2023 | JANUARY – JUNE 2024 | DIFFERENCE | DIFFERENCE IN LOCAL CURRENCY |
| Rieter | 758.2 | 421.0 | -44% | -43% |
| Machines & Systems | 521.9 | 198.7 | -62% | -61% |
| Components | 143.9 | 126.5 | -12% | -11% |
| After Sales | 92.4 | 95.8 | 4% | 7% |
Sales by Region
| SALES BY REGION CHF MILLION |
JANUARY – JUNE 2023 | JANUARY – JUNE 2024 | DIFFERENCE | DIFFERENCE IN LOCAL CURRENCY |
| Rieter | 758.2 | 421.0 | -44% | -43% |
| Asian countries1 | 227.0 | 94.2 | -59% | -58% |
| China | 83.7 | 74.4 | -11% | -7% |
| India | 131.5 | 58.7 | -55% | -54% |
| Türkiye | 78.5 | 76.7 | -2% | 0% |
| North and South America | 105.5 | 54.3 | -49% | -48% |
| Europe | 44.7 | 25.4 | -43% | -42% |
| Africa | 87.3 | 37.3 | -57% | -57% |
1 Excluding China, India, and Türkiye
Key Figures
| CHF MILLION | JANUARY ‒ JUNE 2023 |
JANUARY ‒ JUNE 2024 |
DIFFERENCE |
| Rieter | |||
| Order intake | 325.0 | 403.4 | 24% |
| Sales | 758.2 | 421.0 | -44% |
| Operating result before interest, taxes, depreciation, and amortization (EBITDA) | 52.2 | 35.7 | -32% |
| Operating result before interest, taxes, and restructuring (EBIT before restructuring) | 28.2 | 9.1 | -68% |
| – in % of sales | 3.7% | 2.2% | |
| Operating result before interest and taxes (EBIT) | 25.2 | 8.9 | -65% |
| – in % of sales | 3.3% | 2.1% | |
| Net result | 13.3 | 1.7 | -87% |
| Basic earnings per share (CHF) | 2.97 | 0.39 | -87% |
| Free cash flow | 10.0 | -1.1 | -111% |
| Net debt at the end of the reporting period | -298.9 | -243.9 | -18% |
| Equity in % of total assets at the end of the reporting period | 23.0% | 31.9% | |
| Number of employees (excluding temporaries) at the end of the reporting period | 5 555 | 4 831 | -13% |
| Business Group Machines & Systems | |||
| Order intake | 111.4 | 211.5 | 90% |
| Sales | 521.9 | 198.7 | -62% |
| Operating result before interest, taxes, and restructuring (EBIT before restructuring) | 2.2 | -9.8 | -545% |
| – in % of sales | 0.4% | -4.9% | |
| Operating result before interest and taxes (EBIT) | 1.6 | -9.9 | -719% |
| – in % of sales | 0.3% | -5.0% | |
| Business Group Components | |||
| Order intake | 131.0 | 117.6 | -10% |
| Sales | 143.9 | 126.5 | -12% |
| Total segment sales | 211.3 | 151.4 | -28% |
| Operating result before interest, taxes, and restructuring (EBIT before restructuring) | 16.0 | 5.1 | -68% |
| – in % of segment sales | 7.6% | 3.4% | |
| Operating result before interest and taxes (EBIT) | 16.0 | 5.1 | -68% |
| – in % of segment sales | 7.6% | 3.4% | |
| Business Group After Sales | |||
| Order intake | 82.6 | 74.3 | -10% |
| Sales | 92.4 | 95.8 | 4% |
| Operating result before interest, taxes, and restructuring (EBIT before restructuring) | 16.0 | 20.9 | 31% |
| – in % of sales | 17.3% | 21.8% | |
| Operating result before interest and taxes (EBIT) | 16.0 | 20.9 | 31% |
| – in % of sales | 17.3% | 21.8% |
Posted: July 18, 2024
Source: Rieter
