Rieter expects below-average demand for new equipment in the first half of current year, with a revival expected in the second half of 2023 after ITMA, the leading trade fair in Milan (Italy). Rieter also believes that demand for consumables, wear & tear and spare parts will recover during 2023.
For the 2023 financial year, due to the high order backlog, Rieter anticipates sales in the order of magnitude of the previous year. The realization of sales from the order backlog continues to be associated with risks in connection with the ongoing geopolitical uncertainties, rising financing costs, continuing bottlenecks in the supply chains, and possible, currently unforeseeable consequences of the earthquake in Türkiye in February 2023. Despite the price increases already implemented, further global cost increases continue to pose a risk to the growth of profitability.
2022 Performance
The 2022 financial year was characterized by record sales of CHF 1 510.9 million and enormous challenges in their realization. Geopolitical uncertainties, the rapid rise in inflation, and additional development expenditure to compensate for material bottlenecks, weighed heavily on earnings. Higher expenses were also incurred in connection with the acquired businesses. Despite the exceptionally challenging environment, Rieter generated an EBIT margin of 2.1%. Implementation of the measures already initiated to improve profitability is continuing.
Sales, Order Intake and Order Backlog
With record sales of CHF 1 510.9 million, Rieter achieved an increase of 56% compared with the previous year (2021: CHF 969.2 million). In the second half of 2022, especially in the fourth quarter, the measures introduced to address material bottlenecks had a positive impact. Consequently, sales increased to CHF 890.3 million compared with the first six months (first half-year 2022: CHF 620.6 million).
Order intake was CHF 1 157.3 million in 2022 (2021: CHF 2 225.7 million) and thus remained at a high level thanks to the company’s technological lead and broad international presence. The market situation, especially in the second half of 2022, was characterized by investment restraint and below-average capacity utilization at spinning mills due to geopolitical uncertainties, rising financing costs, and consumer reticence in important markets.
The company had an order backlog of around CHF 1 540 million at the end of 2022, which thus extends into 2023 and 2024.
Completion of the Acquisition
Rieter consolidated the acquired automatic winding machine business with effect from April 1, 2022. This acquisition completes Rieter’s system offering in the largest market segment of ring and compact spinning, thus significantly strengthening the company’s market position.
Implementation of the action plan to increase profitability is ongoing. With regard to the margins for the order backlog, which remains high, the already implemented price increases in combination with a positive trend in costs, particularly in logistics, are having a favorable impact. In addition, progress was made in eliminating material bottlenecks and reducing expenses for the three acquired businesses.
Innovation Program
In the context of ITME 2022 in Delhi (India), Rieter presented solutions for the economical production of yarns from recycled fibers, which met with great customer interest. As the technology leader, Rieter will present new, innovative products at ITMA 2023 in Milan (Italy).
The sales process for the remaining land at the Rieter site in Winterthur (Switzerland) is proceeding according to plan. In total, around 75 000 m2 of land will be sold. The Rieter CAMPUS is not part of this transaction.
Board of Directors and Annual General Meeting
At the 131st Annual General Meeting held on April 7, 2022, the shareholders approved all motions proposed by the Board of Directors. The Chairman of the Board, Bernhard Jucker, and the Directors, Hans-Peter Schwald, Peter Spuhler, Roger Baillod and Carl Illi, were confirmed for a further one-year term of office. Sarah Kreienbühl and Daniel Grieder were newly elected for a one-year term of office as members of the Board of Directors. The members of the Remuneration Committee who were standing for election – Hans-Peter Schwald and Bernhard Jucker – were also re-elected for a one-year term of office. Sarah Kreienbühl was newly elected for a one-year term of office as a member of the Remuneration Committee, and takes over the chair.