Rieter, a leading supplier of systems for short-staple fibre spinning, is setting new priorities in the implementation of its strategy.

The priorities for the next three years will be the further reinforcement of its innovative capabilities and the expansion of its product and service offering, especially in parts and components.

Additional resources for research and development are being budgeted for this purpose. The company will also take action to optimise the utilisation of existing capacity, improve product margins and reduce structural costs.

Medium-term financial targets

Rieter will create shareholder value with its medium-term profitability target of an EBIT margin of about 10% of sales and a RONA (Return On Net Assets) of about 14%.

With ongoing annual growth in fibre consumption of 2-3%, the present currency environment, current raw material prices, and its existing product and service portfolio, Rieter believes it can achieve its profitability target in the medium term with sales of some 1.3 billion CHF.

Market environment

Spinning mills’ narrowing margins due to declining raw material and yarn prices in the third quarter have resulted in a slowdown in market momentum, especially in Turkey, the Asian countries (without China and India) and Latin America.

The slightly positive momentum in India was maintained in the third quarter, while the restraint in China continued. The lower overall utilisation of spinning mill capacity has also resulted in reduced demand for spare and wear and tear parts.

In this more challenging market environment Rieter recorded accumulated order intake of slightly over 900 million CHF up to the end of the third quarter.

Outlook

For the second half of 2014 Rieter expects a market demand on lower levels than in the strong first semester.

Based on the current order backlog, full year sales for 2014 are expected to show at least high single digit growth compared to 2013. Operational profitability (EBIT) in 2014 will be positively impacted by volume growth.

All in all, Rieter expects for the year 2014 a higher operating result (EBIT) than in 2013.

Rieter

Rieter is the leading supplier of systems for short-staple fibre spinning. Based in Winterthur, Switzerland, the company develops and manufactures machinery, systems and components used to convert natural and manmade fibres and their blends into yarns.

Rieter covers spinning preparation processes as well as all four final spinning processes currently established on the market. With 18 manufacturing locations in ten countries, the company employs a global workforce of some 4 800.

www.rieter.com