Rieter held on October 27, 2017 its Investor Conference and published the results of the third quarter and thus nine months results
- Order intake up on previous year
- Increased order intake in all three business groups in the third quarter
- Details on outlook for 2017
The amount of orders received by the Rieter Group in the first nine months of 2017 was higher than for the same period of the previous year. Cumulative order intake amounted to CHF 765.0 million and was thus up by 6 % on the said prior year period. Order intake in the third quarter was CHF 269.7 million.
The market environment in the third quarter of 2017 was characterized by differing dynamics in the individual countries as well as with regard to the product categories. While Rieter achieved a high order intake in Asia (excluding China, India and Turkey), demand in China, and particularly India, was restrained. In Turkey, demand for new machines revived in the third quarter.
Rieter recorded cumulative order intake of CHF 765.0 million in the first nine months of 2017 (2016: CHF 718.4 million). All three business groups contributed to this positive growth compared to the previous year.
The Machines & Systems Business Group posted an order intake of CHF 490.1 million, a slight increase (+3 %) compared to the first nine months of the previous year (2016: CHF 477.6 million). Machines & Systems received orders worth CHF 164.9 million in the third quarter (Q3 2016: CHF 134.2 million). In Asia (excluding China, India and Turkey), order intake in the third quarter was significantly above the previous year’s level. In Uzbekistan, in particular, there was strong demand for classic ring spinning systems.
The After Sales Business Group increased order intake from CHF 103.3 million to CHF 115.8 million, an improvement of 12 % compared to the previous year. Order volumes in the third quarter, which totalled CHF 38.0 million, were higher than in the corresponding period of the prior year (Q3 2016: CHF 32.0 million). The rising demand for after-sales services in Asia, China and India contributed to the growth. The spare parts business continued to develop well. The increase in orders in the machines business resulted in higher demand for installation services in the After Sales Business Group.
In the Components Business Group, order intake of CHF 159.1 million was recorded, this being around 16 % above the corresponding period of the previous year (2016: CHF 137.5 million). In the third quarter, order intake amounted to CHF 66.8 million (Q3 2016: CHF 41.5 million). SSM Textile Machinery (SSM) contributed CHF 19.2 million to this significant increase of CHF 25.3 million, supported by generally improved growth in demand in the business group. In China and other Asian countries, order intake was higher overall. The integration of SSM is proceeding according to plan. Rieter focuses on the active use of synergy potential in the field of precision winding machines.
Renewal of bilateral committed credit lines
The Rieter Group has arranged early renewal of the unutilized bilateral committed credit lines prior to maturity in 2018. As a result, Rieter now disposes of bilateral committed credit lines of CHF 175 million until October 31, 2022. The Group therefore continues to enjoy long-term, flexible financing.
Details on the outlook for 2017
As communicated in July, in 2017 Rieter expects slightly higher sales than in the previous year and an EBIT slightly below the prior year level (before restructuring charges), due to the product and country mix. For the whole of 2017, Rieter anticipates sales in the region of CHF 980 million and operating profitability (EBIT margin) of 4.5 % to 5.5 % before restructuring charges. The restructuring charges amount to CHF 36 million. As a result, Rieter expects a net profit of around 1 % to 2 % of sales for the 2017 financial year.
Rieter anticipates that demand will continue at the good level of recent months.