Rieter sales plunge 16% in 2012

The Rieter Group had to hold its own in a challenging market environment worldwide in the 2012 financial year. Orders received totaled 839.7 million CHF, corresponding to a reduction of 12% for the year as a whole, but order intake was higher in the second half of the year than in the first six months. As expected, sales were lower than in 2011, declining by 16% to 888.5 million CHF. Rieter had a backlog of orders in hand of some 550 million CHF at the end of 2012. Rieter will publish its annual financial statements and annual report on March 21, 2013.

Uncertainty was the characteristic feature of all major economic regions of the world in 2012. Suppliers of textile machinery and components faced additional industry- and country-specific challenges in their main markets of China and India. Spinning mills in India continued to struggle with the consequences of the distortions in raw material prices in the first half of the year, but a recovery in demand became apparent in the second half, especially in the north of the country.

In China, spinning mills suffered as a result of government-regulated raw material prices. Overall, Rieter’s spinning mill customers recorded a more stable trend of business in the second half of the year and operated profitably. However, the business environment in yarn customers’ markets remained volatile and banks’ attitude to financing projects remained cautious.

In this unfavorable environment it was clearly apparent in 2012 that Rieter is well positioned with its existing product range and that its innovation and expansion strategy with the focus on Asia is aiming in the right direction. The company is considerably better structured with market-specific products today than during the economic slump in 2008/09. Rieter reinforced its overall market position in 2012. Machinery and components offering higher productivity and quality with lower energy consumption, also with a higher degree of automation, are in greater demand than ever in the major markets of China and India.

Orders received

In the year under review the Rieter Group received orders amounting to 839.7 million CHF, equivalent to a decline of 12%. This figure includes cancelations of orders totaling some 60 million CHF. Order intake nevertheless increased by 8% to 435.6 million CHF in the second half of the year compared to the first six months. This positive trend was due mainly to the revival of the market in India and a slight increase in demand in Turkey and in countries in Southeast Asia as well as North and South America. In China, Rieter recorded a good level of order intake despite a more challenging environment.

A number of substantial orders for machines not due to be delivered until the 2013 financial year were also received during this period. Order intake was lower at both business groups, but the decline was less pronounced at Spun Yarn Systems (the new machinery business) than at Premium Textile Components (the components supply business).