WINTERTHUR, Switzerland— October 23, 2020 — The market recovery, which Rieter reported in June 2020, has continued. This is reflected in capacity utilization at spinning mills worldwide, which Rieter monitors. In April 2020, the proportion of producing spinning mills was around 40 percent while at the end of September 2020 this was around 90 percent. Against this backdrop, the Rieter Group increased order intake in the third quarter of 2020 to 174.4 million Swiss Francs ($192.4 million) (2nd quarter 2020: 45.7 million Swiss Francs ($50.4 million)). In the first nine months of 2020, the Rieter Group achieved a cumulative order intake of 425.1 million Swiss Francs ($468.9 million) (2019: 524.5 million Swiss Francs ($578.5 million). Compared to the previous year period, this represents a decline of 19 percent.
Order Intake by Business Group
Change CHF million in local currency (Year over Year, Jan. – Sept.)
- Rieter -18 percent;
- Machines & Systems -7 percent;
- Components -31 percent; and
- After Sales -20 percent.
Due to the positive development in the third quarter of 2020, order intake at the Business Group Machines & Systems reached a total of 234.5 million Swiss Francs ($258.7 million) in the first nine months. The reason for the relatively small decline of 8 percent compared to the previous year is that the new machinery business was already characterized by investment restraint in the first three quarters of the year 2019.
The Business Group Components recorded a reduction of 33 percent to 116.6 million Swiss Francs ($128.6 million) while the Business Group After Sales posted an order intake of 74.0 million Swiss Francs ($81.6 million), a decrease of 23 percent. This illustrates the effects of low capacity utilization at the spinning mills, especially in the second quarter of 2020 as a result of the COVID-19 pandemic.
The order backlog as of September 30, 2020, was around 515 million Swiss Francs ($568 million) (September 30, 2019: 285 million Swiss Francs ($314 million)). Cancellations were in the normal range of around 5 percent.
COVID Crisis Management in Place
Rieter has quickly implemented comprehensive COVID crisis management. Priority is being given to protecting employees, fulfilling customer commitments and ensuring liquidity. The necessary measures to protect employees have been implemented worldwide and the order backlog is being processed largely as planned.
Rieter has introduced 40 percent short-time working in Switzerland and Germany for the second half of 2020. Similar measures were implemented worldwide within the scope of the available legal options.
As of September 30, 2020, Rieter had liquid funds of 216.7 million Swiss Francs ($239 million) and unused credit lines in the mid three-digit million range in order to ensure liquidity. At the end of September 2020, net debt of 1.2 million Swiss Francs($1.3 million) was disclosed.
Continuous Implementation of the Strategy
In recent years, Rieter has consistently implemented the strategy with the focus on innovation leadership, strengthening the business on the installed base and optimization of the costs. The company intends to forge ahead with the strategy in the coming months in order to strengthen the market position for the time after the COVID-19 pandemic.
The Rieter CAMPUS is an important element of Rieter’s innovation strategy. Depending on the business situation, construction work is due to begin in the first half of 2021.
As already announced, in terms of sales and profitability Rieter expects a stronger second half of the year compared to the first half of 2020. Nevertheless, due to the deferral of deliveries by customers, Rieter will also conclude the second half of the year — and thus the full year 2020 — with a net loss.
Due to the existing uncertainties, it continues to be difficult to forecast sales and profitability for the second half of 2020. For this reason, Rieter refrains from providing more specific information for the full year 2020.
Posted October 23, 2020