WINTERTHUR, Switzerland — January 25, 2023 — In a very challenging economic environment, Rieter succeeded in significantly increasing sales and expects a positive EBIT margin for the 2022 financial year.
For Rieter, in addition to the geopolitical uncertainties, the 2022 financial year was characterized by three main challenges:
Due to the rapid rise in inflation, the exceptionally high order backlog of around CHF 1 840 million at the beginning of 2022 was processed at significantly higher costs. It was only possible to offset these higher costs in part by means of price increases and other remedial measures.
In order to safeguard deliveries, it was necessary to compensate for serious material bottlenecks, particularly in electronic components, which resulted in considerable additional development expenditure.
Major expenses were also incurred in connection with the acquired businesses (Accotex, Temco and Winder).
The realization of sales from the exceptionally high order backlog developed better than expected. With sales of 1,510.9 million Swiss francs ($1,650 million), Rieter achieved an increase of 56 percent compared with the previous year (2021: 969.2 million Swiss francs ($1,058 million)). In the second half of 2022, especially in the fourth quarter, the measures introduced to address material bottlenecks had a positive impact. Consequently, sales increased to 890.3 million Swiss francs ($972 million) compared with the first six months (first half-year 2022: 620.6 million Swiss francs ($678 million).
The trend in the EBIT margin was strongly influenced by substantial cost increases, which could only be offset in part through price increases and other remedial measures. In addition, to compensate for material shortages, expenses were incurred in connection with the development of alternative solutions and the acquired businesses.
Rieter succeeded in improving profitability compared with the first half of 2022 due to the higher sales volume and offsetting measures to compensate for increased costs, and expects a positive EBIT margin of around 2 percent for the full year 2022 (2021: 4.9 percent).
In line with expectations, the order intake of 1,157.3 million Swiss francs ($1,263 million) in 2022 was below the record year of 2021 (2,225.7 million Swiss francs ($2,464 million). The market situation is characterized by investment restraint due to geopolitical uncertainties, higher financing costs and consumer reticence in important markets.
The company had an order backlog of around 1,540 million Swiss francs ($1,682 million) at the end of 2022, which thus extends well into 2023 and 2024. In 2022, Rieter recorded order cancellations of less than 10 percent of the order backlog of 1,840 million Swiss francs ($2,009 million) at the beginning of the year.
Preparations for ITMA 2023 on schedule
Rieter has continued to boost its innovative capability and, in order to further extend its technology leadership, will present new innovative solutions at ITMA 2023 in Milan.
Action plan to increase sales and profitability
Implementation of the action plan to increase sales and profitability is ongoing. With regard to the profitability of the order backlog, which remains high, the implemented price increases in combination with a favorable trend in costs, particularly in logistics, are having an impact. In addition, progress was made in eliminating material bottlenecks and reducing expenses for the three acquired businesses.
Rieter site sales process
The sales process for the remaining land at the Rieter site in Winterthur (Switzerland) is proceeding according to plan. In total, around 75,000 square meters of land will be sold. The Rieter CAMPUS is not part of this transaction.
Results press conference 2023
Rieter will provide further details on the 2022 financial year and an outlook for the 2023 financial year on March 9, 2023. In addition, the full 2022 Annual Report will be published, and a press conference will be held.
Annual General Meeting of April 20, 2023
The next Annual General Meeting of Rieter Holding AG will take place on Thursday, April 20, 2023. Proposals regarding the agenda must be submitted in writing, accompanied by information concerning the relevant motions and evidence of the necessary shareholdings (with a par value of 0.5 million Swiss francs ($0.55 million) as stipulated by Article 9 of the Articles of Association), by no later than February 17, 2023, to Rieter Holding Ltd., Office of the Company Secretary, Klosterstrasse 32, CH-8406 Winterthur, Switzerland.
Posted: January 26, 2023
Source: Rieter Holding Ltd.