- Weak market environment leads to decline in order intake of 17%
- Sales increase by 11% to CHF 1 075 million
- Order backlog on December 31, 2018, of CHF 325 million
- EBIT margin of around 4% and net profit of around 3% of sales expected
- Net liquidity increases to CHF 150 million
- Kurt Ledermann new Chief Financial Officer of Rieter Group
The Rieter Group achieved an order intake of CHF 868.8 million in the 2018 financial year, 17% down on the previous year period (2017: CHF 1 051.5 million). At CHF 1 075.2 million, total sales were 11% higher than the previous year (2017: CHF 965.6 million). Net liquidity increased to CHF 150.3 million (December 31, 2017: CHF 130.5 million). The full annual financial statements and the 2018 Annual Report will be published by Rieter on March 13, 2019.
Order Intake by Business Group
The Business Group Machines & Systems posted an order intake of CHF 468.3 million, a reduction of 30% compared to the previous year. Demand in the new machinery business was characterised by uncertainties in Asia and Turkey as well as the tense financing situation for emerging market customers. Both factors had a negative impact on the investment sentiment 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.
In the Business Group Components, order intake was CHF 260.1 million, around 14% above the previous year (excluding acquisition -6%). Due to weaker macroeconomic conditions, order intake in the fourth quarter of 2018 amounted to CHF 55.0 million which was lower than in the previous quarters. This decline can be attributed to a low propensity for investments by customers.
With an order intake of CHF 140.4 million, the Business Group After Sales recorded a year-on-year decline of 9%. Order intake of CHF 29.1 million in the fourth quarter of 2018 was lower than in the previous quarters. This is due in particular to the lower order intake for installation services for new Rieter machines.
Sales by Business Group
Group sales in 2018 amounted to CHF 1 075.2 million (2017: CHF 965.6 million), an increase of 11% over the previous year. Rieter achieved increased sales thanks to organic growth in the Business Group Machines & Systems. In addition, 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 the previous year’s levels of sales despite weaker market dynamics during the second semester of 2018.
In the Asian countries (excluding China, India and Turkey), Rieter increased sales in the reporting year by 36% to CHF 433.9 million, of which Uzbekistan contributed CHF 144.1 million. In 2018, sales in China fell by 19% to CHF 148.6 million. With the phasing out of the subsidy programme in the western province of Xinjiang, the demand for machinery declined. Sales in India fell by 16% to CHF 146.2 million. In Turkey, Rieter achieved sales of CHF 154.8 million (+55%) in a difficult market environment, thanks to the introduction of the new ring and compact spinning machines.
Sales in North and South America amounted to CHF 108.6 million (-5%). In the Europe region, Rieter increased sales by 3% to CHF 47.3 million. Sales in the Africa region amounted to CHF 35.8 million (+29%).
At the end of 2018, Rieter’s order backlog amounted to about CHF 325 million (December 31, 2017: about CHF 540 million). Due to the development of the business as described above, Rieter is planning capacity adjustment and cost reduction measures.
Kurt Ledermann new Chief Financial Officer of Rieter Group
The Board of Directors of Rieter Holding Ltd. has appointed Kurt Ledermann to the Group Executive Committee of Rieter Group as Chief Financial Officer, effective June 1, 2019.
Kurt Ledermann started his career with SIKA AG in the area of finances after having graduated from ETH Zurich with a degree in electrical engineering and from St. Gallen University with a degree in business administration. He has been working at Schaffner Holding AG in Luterbach (Switzerland) as Chief Financial Officer since 2008. Kurt Ledermann was born in 1968 and is a Swiss citi