Rieter Holding Investor presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 . . . . . . . . . . . . . . . . . . . . . . . . .
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 June 2013 2
2012: Key messages “Rieter has strengthened its market position in a challenging market environment and is on track with its investment program. Despite cyclically weaker sales and lower profitability , Rieter continues the policy of paying cash dividends – a dividend of 2.50 CHF per share has been paid out for 2012.” Erwin Stoller Executive Chairman Results 2012 June 2013 3
Rieter – Highlights 2012 Market position strengthened – investment program on track • Market environment improved slightly with stabilized positive spinning mills margins Market • Indian market improved in the north, Turkey and other large markets improved slightly, development China was still hesitant due to locked-in raw material prices • Financing for projects in China and India remained an issue • Market position strenghtened in a challenging market – product portfolio well positioned • Sales in China increased y-o-y by 27% to 192.5 million CHF Strategic / operational • Successful fairs in Turkey, China and India held • New Comber E 80 and component innovations presented • Program on track – half-way milestones passed • Expansion in Asia: Construction in Pune (IN) completed, Changzhou (CN) partly Investment operational program • Airjet introduction ongoing • Process improvements proceed along plan • Sales decreased by 16% to 888.5 million CHF. Order intake with 839.7 million CHF decreased by 12% but showed increase in second half-year Financial • Lower EBIT margin of 3.8% of sales due to volume, strategic projects and product mix • Net profit of 3.0% of sales leads to EPS of 6.40 CHF and a dividend of 2.50 CHF out of reserves from capital contributions has been paid out (dividend yield: 1.6%) Results 2012 June 2013 4
Agenda 1. Introduction and summary of 2012 2. Financial results 2012 3. Strategic focus 4. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results 2012 June 2013 5
Rieter – Financial key figures Book-to-bill ratio turned positive in second semester of 2012 FY 2012 HY2 2012 HY1 2012 FY 2011 CHF million Order Intake (1) 839.7 435.6 404.1 958.3 Sales 888.5 401.2 487.3 1060.8 EBITDA 66.8 18.7 48.1 146.5 EBIT (2) 33.6 1.6 32.0 112.6 EBIT margin (of sales) 3.8% 0.4% 6.6% 10.6% Net profit (3) 26.5 4.6 21.9 119.0 R&D expenditures 42.7 21.8 20.9 39.5 Capex (4) 81.6 57.3 24.3 57.3 (1) Including cancellations of 60 million CHF in 2012 (2011: 113 million CHF) (2) Including strategic project costs of 25.3 million CHF in 2012 (3) Including gain from sale of assets of 17.6 million CHF (2011: 47.3 million CHF) (4) Including investments for strategic projects of 51.6 million CHF Results 2012 June 2013 6
Orders by business group 12% lower orders received than 2011, but HY2 up 8% versus HY1 2012 • Orders received included cancelations CHF million of 60 million CHF • Decline in FY 2012 less pronounced at 700 671 Spun Yarn Systems 118 SYS: -10% (local currency -11%) 600 PTC: -21% (local currency -20%) +8% 500 • Decrease at PTC mainly due to weaker 436 404 demand from Chinese and Indian 400 71 machinery manufacturers 74 287 • Order backlog at around 550 million 300 553 65 CHF at year-end 200 365 330 222 100 553 222 0 HY1 2011 HY2 2011 HY1 2012 HY2 2012 Premium Textile Components Spun Yarn Systems Results 2012 June 2013 7
Sales by business group Sales declining by 16% to 888.5 million CHF with lower second half-year 2012 • Decline in both business groups: SYS: -16% (local currency -16%) CHF million -16% PTC: -19% (local currency -18%) 1.061 1.100 • Downturn more pronounced in the 1.000 second half of 2012 199 889 870 900 • Heterogeneous development across the 161 800 regions – business group Spun Yarn 191 700 Systems with substantial increase in sales in China compared to the previous 600 year 500 862 400 728 674 300 200 100 5 0 2010 2011 2012 Premium Textile Components Other Spun Yarn Systems Results 2012 June 2013 8
Sales development by region Sales increase in China helped to mitigate cyclical decline in sales • Substantial increase in sales to China -13% -19% -45% -27% -28% +27% +31% • Share of sales to China increased to CHF million 21.7% (2011: 14.2%) 300 • Lower sales to main markets India and 256 Turkey 250 224 • Share of sales to India decreased to 209 10.8% (2011: 16.5%) 193 200 175 168 • Continued increase of share of sales to 151 Asia to 76.6% (2011: 74.6%) 150 124 124 • Overall, Rieter reinforced its market 96 91 89 100 position in 2012 50 29 22 0 Other China Turkey India Ameri- Europe Africa Asian cas countries 2011 2012 Results 2012 June 2013 9
Operating result (EBIT) EBIT margin decreased to 3.8% In % of • EBIT decreased by 70% to 33.6 million CHF in 10.6% 3.8% sales 2012 (incl. Strategic projects cost: - 56%) CHF million • Profitability mainly impacted by -56% 135 140 • Continued volume decrease in the profitable components business (PTC) as well as in the 22 120 machine business (SYS) • Margin decrease in the machine business due 100 to less demand for products with higher profitability and continued pricing pressure due 80 to cycle and exchange rate (Swiss franc 59 denominated sales) 60 113 • Continuation of investment program despite volume 25 40 down-turn led to strategic project cost of 25.3 million CHF 20 34 • Disposal gain of 6.0 million CHF from sale of two Czech production sites 0 2011 2012 Strategic project cost EBIT Results 2012 June 2013 10
Net profit (continued operations) and RONA Net profit margin at 3.0% despite strong EBIT decrease In % of • Sale of LMW and LRT shares contributed 17.6 11.2% 3.0% sales million CHF (2011: 47.3 million CHF) to net profit CHF million from continued operations • Financial result mainly impacted by interest cost on 140 -78% 2015 bond 119 120 • Tax rate at 24.5% • Earnings per share from continued operations 100 decreased to 6.40 CHF 80 • Board of Directors proposes a dividend of 2.50 CHF per share out of the reserve from capital 60 contributions (dividend yield of 1.6%) 40 27 20 0 2011 2012 25.86 6.40 EPS in CHF 19.8% 6.7% RONA in % Results 2012 June 2013 11
Balance sheet Net liquidity decrease to 95.6 million CHF and equity ratio stable at 35% • Net liquidity of 95.6 million CHF mainly 31.12. 30.06. 31.12. impacted by negative free cash flow of CHF million 2012 2012 2011 -32.3 million CHF and dividend of -27.7 million CHF paid out in April 2012 Total assets 1070.1 1061.7 1111.4 • Shareholders‘ equity ratio at stable 35% Non-current assets 356.3 325.5 322.0 • Bond of 250.0 million CHF (2010 – 2015, 4.5%) secures financing of Net working capital 62.0 85.2 53.3 business development • Authorized capital of 500,000 shares Liquid funds 351.9 362.3 415.6 approved in AGM 2012 allowing timely execution of corporate development Net liquidity 95.6 107.4 159.0 Short-term financial debt 6.7 6.7 3.1 Long-term financial debt 249.6 248.2 253.5 Shareholders’ equity 376.8 373.8 387.7 in % of total assets 35% 35% 35% Results 2012 June 2013 12
Free cash flow (continuing operations) Free cash flow of -32.3 million CHF as a result of high investments • Negative free cash flow of -32.3 million 2012 2011 CHF million CHF (2011: 79.5 million CHF) Net profit 26.5 119.0 • Further sale of LMW and LRT shares and divestment of Czech production Interest and tax expense (net) 22.2 29.2 facilities contributed further 35.0 million CHF to free cash flow Depreciation and amortization 33.2 33.9 • Main impact on free cash flow from high +/- Reversal of disposal gains -39.2 -53.5 investments due to investment program 2012 / 2013 +/- Change in net working capital -5.8 -17.5 +/- Interest paid / received (net) -9.9 -7.3 +/- Taxes paid -17.7 -23.4 +/- Capital expenditure, net -75.9 -53.6 +/- Change in other financial assets -0.7 0.5 +/- Sale LMW shares / divestments 35.0 52.2 Free cash flow -32.3 79.5 Results 2012 June 2013 13
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