Sales rose by 6% to 553.9 million CHF. As a result, the EBITDA margin amounted to 11.9% and the EBIT margin to 8.3% of sales, compared to 9.3% and 5.5%, respectively, in the first half of 2014. Net profit rose to 29.1 million CHF or 5.3% of sales, compared to 14.3 million CHF in the first half of 2014.

Since January 1, 2015, Rieter has been conducting its operations in three business groups: Machines & Systems (machinery business), After Sales (spare parts and services) and Components (technology components). The company is thus also taking account in particular of the strategic importance of the after-sales business and improving transparency. With the figures for the first half of 2015, Rieter is reporting results on the basis of this new structure for the first time.

Market situation

The market situation forecast by Rieter at the results press conference held in March proved to be true for the first half of 2015. Spinning mills performed at a healthy level in many key markets and this had a positive effect on order intake and sales for the After Sales and Components business groups.

For the Machines & Systems Business Group, subdued investment demand from customers was clearly apparent. This trend is due to spinning mills’ low margins on the one hand, and to global currency turbulence on the other. These developments, however, did not lead to an increase in order cancellations in the period under review.

Asian markets continued to develop at the good level of the previous year during the first half of 2015. Compared to the strong first half of 2014, a significant drop in orders was recorded above all in Turkey, while customers in India continued to invest at a solid level. In China, the market remained subdued. As expected, order intake (388.3 million CHF) was therefore lower than in the second half of 2014 (490.6 million CHF) and the first half of 2014 (655.5 million CHF).

Business groups

The trend in sales was positive in all three business groups. Machines & Systems was responsible for 71% of sales, and After Sales and Components for 13% and 16%, respectively.

Machines & Systems increased sales by 4% to 392.7 million CHF, and After Sales by 17% to 69.6 million CHF. At Components, sales to third parties grew by 6% to 91.6 million CHF. Segment sales, i.e. including deliveries to Machines & Systems, dropped by 4% to 125.4 million CHF, compared to 130.1 million CHF during the first half of 2014.

Priorities for 2015

The company worked intensively during the first half of 2015 on the implementation of the three strategic priorities, which it set out in fall last year. The implementation programme is known as STEP UP.

The increased expenditure on research and development during the period under review was mainly directed at the completion of important product development projects, which will be presented in November at the ITMA textile machinery trade fair in Milan. Rieter is also in the process of positioning its important, long-established service facilities on the market as an independent business. Rieter’s after-sales business focuses on the growing global spinning capacities of customers operating Rieter machines and systems.

The company has also initiated short, medium and long term measures to further reduce its exposure to the Swiss franc and generally to improve efficiency. A series of measures activated at short notice already had a cost-reducing effect in the first half of 2015, and was thus a contributory factor in increasing profitability.

Outlook

There was a healthy trend in demand for products and services provided by After Sales and Components in the first six months of the year. By contrast, Machines & Systems’ markets were characterized by spinning mills’ reluctance to invest. In Rieter’s view, the market situation will remain essentially unchanged in the short term.

The company expects sales for the whole of 2015 to be lower than in 2014. Consequently, EBIT and net profit are expected to be lower than in 2014.

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