The regular reader of the Rupp Report knows about the positive comments of the major textile
machinery suppliers that exhibited at ITMA Barcelona. Over the last months since the end of ITMA
2011 last September, most of the machinery suppliers reported satisfactory results for 2011.
However, it was not that certain whether the good impression of ITMA 2011 would be evident in the
annual results. The first big player with final results now going public with its figures is the
Switzerland-based Rieter Group, which has reported a significant increase in sales.
Rieter’s Dec. 31, 2011, figures are the first it has reported for a full financial year under
the new structure that went into effect May 13, 2011, following the spinoff of Rieter’s automotive
business. Since then, Rieter Group has focused on being a supplier of machinery and components for
staple-fiber spinning mills. The company will publish its final results March 21, 2012.
Booming Demand And Mixed Emotions
Rieter reports: “The boom in demand on the world market for textile machinery and components
experienced in 2010 continued in the first quarter of 2011. The investment climate started to cool
off as of the second quarter. The high cost of cotton and declining yarn prices intensified
pressure on spinning mills’ margins and liquidity. The second half of the year was also dominated
by uncertainty due to the trend in raw material prices and prospects for the global economy. As of
the second quarter the market retreated to a lower level compared with the previous year. Demand
for yarns also declined in 2011. However, spinning mills were able to reduce yarn inventories to
some extent again in the second half of the year.
Market Disruption Affects Order Intake
“Orders totaling 958.3 million CHF [Swiss francs] received by Rieter in 2011 were 34% lower
than the very high figure recorded in the previous year (-31% in local currencies). The decline
occurred in particular as of the second quarter and affected both Business Groups. While orders
received by Spun Yarn Systems were 36% lower at 775.0 million CHF, at Premium Textile Components
they declined by 22% to 183.3 million CHF (-34% and -17% respectively in local currencies.”
Some orders were postponed or canceled as a consequence of the raw material and yarn market
disruptions, Rieter reports: “Most cancelations affected orders placed in the peak year of 2010.
Rieter therefore adjusted its order book by a total of 112.6 million CHF in the second half of
2011. Excluding cancelations, orders received in the second half of the year amounted to 399.6
million CHF. Orders in hand at year-end were slightly over 600 million CHF.
“China, Turkey and India were the sources of the largest volume of orders. Other important
markets were South Korea, Indonesia, the USA, Brazil, Pakistan and Bangladesh. All in all Reiter
further expanded its market position worldwide in the year under review and gained market share
with attractive products. In China and India Rieter strengthened its market position with a
specific offering for the local markets. …
“Due to the high level of orders in hand and increased output at Spun Yarn Systems, Rieter’s
sales rose overall by 22% compared with the previous year, to 1060.8 million CHF (+27 percent in
local currencies). The Spun Yarn Systems Business Group posted a 28% increase in sales to 861.7
million CHF. Sales at the Premium Textile Components Business Group increased by 4% to 199.1
million CHF. In local currencies Spun Yarn Systems grew by 32%, Premium Textile Components by 11%.”
Outlook For 2011
Rieter reports its profitability grew disproportionately in the overall 2011 financial year,
and it expects to post an operating margin in the double-digit range for the year.
February 7, 2012
