#Spinning

2019-10-30

RIETER reports market situation remains challenging

The cumulative order intake recorded by Rieter Group in the first nine months of 2019 of CHF 524.5 million (2018: CHF 749.8 million) was down by 30% compared to the prior-year period. In the third quarter of 2019, order intake was CHF 146.2 million (Q3 2018: CHF 238.0 million).

Order intake of CHF 524.5 million after nine months

Order intake for a major project from Egypt booked in October 2019

Market situation remains challenging

Real estate sale in Ingolstadt successfully completed

Outlook 2019

Order Intake for a Major Project from Egypt Booked

On October 7, 2019, Rieter booked the order intake for the first six projects with Cotton & Textile Industries Holding Company, Cairo (Egypt) of around CHF 165 million. This amount is thus not included in the figures for the third quarter of 2019 and will positively affect the fourth quarter. The sales are anticipated to be realized in the 2020/2021 financial years. The order includes deliveries of compact and ring spinning systems and it is part of a comprehensive modernization program for the Egyptian textile industry.

Market Situation Remains Challenging

The demand for new machinery remained at a low level in the third quarter of 2019. The primary reasons are existing overcapacity in the spinning mills, the trade conflict between the USA and China, as well as political and economic uncertainties in other regions of importance to Rieter. Rieter's market share continues to be at the level of around 30%.

Real Estate Sale in Ingolstadt Successfully Completed

Rieter completed the real estate sale in Ingolstadt (Germany) to GERCHGROUP of Du?sseldorf (Germany) on September 13, 2019. Rieter expects a non-recurring profit contribution from this transaction on a net profit level of around EUR 60 million.

The drop in order intake in the Business Group Machines & Systems compared to the first nine months of the prior year by around 41% to CHF 255.8 million is affecting all regions, except for Pakistan and Latin America.

The Business Group Components recorded a drop in order intake of 16% to CHF 172.9 million compared to the prior-year period for all regions, except for Turkey. This primarily concerns the business activities of SSM and Suessen as a consequence of the above-mentioned market situation. The wear and tear parts business continues at a normal level.

The Business Group After Sales recorded with CHF 95.8 million a decline in order intake by 14% compared to the first nine months of the previous year. This affects all regions except for Turkey, North and South America. Primary reason is the lower volume in the machinery business (lower demand for installation services).

Outlook 2019

Rieter estimates significantly lower sales for the year 2019 as a whole compared to 2018, and expects a significant drop in the result from the ongoing business. EBIT and net profit are anticipated to be significantly above the levels of the previous year due to the non-recurring profit contribution from the sale of real estate in Ingolstadt (Germany). The cost-cutting measures introduced have been implemented to a great extent.

Rieter advances strategic repositioning amid market volatility

Rieter successfully completed the acquisition of Barmag on February 2, 2026, and reached an important milestone in the company’s repositioning. Barmag will be integrated into the Rieter Group as the “Man-Made Fiber” Division. With this strategically transformative acquisition, Rieter is expanding its core business beyond the short-staple fiber business in a targeted way. This positions Rieter as the global market leader along the entire value chain for natural and man-made fibers. In addition, as a complete systems supplier, Rieter is further strengthening its technological leadership in the areas of automation and digitization.

Rieter responds to higher raw material prices

Global political and economic developments have been leading to rising raw material and energy costs for some time. The textile machinery industry is also affected by this trend. Rieter machines and components consist to a large extent of steel, copper, aluminum and electronics. These materials in particular have seen higher demand and higher prices in recent months.

Rieter adjusts group structure in preparation for Barmag integration

The planned acquisition of the “Barmag” Division of OC Oerlikon will create the leading system provider worldwide for natural and man-made fibers. Rieter is confident it will receive all regulatory approvals to complete the acquisition in the fourth quarter of 2025. The Rieter Group is therefore adjusting its Group structure as of January 1, 2026, to take this acquisition into account and to be able to provide an even more agile response to market challenges.

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