Global economic crisis hurts Rieter Textile Systems biz
Between 2007 and the business year 2009 the Rieter Group had to absorb a drastic slump in sales amounting to 1 973.8 million CHF,
equivalent to a decline of some 50%, as a result of the global economic crisis. However, the group successfully defended its strong market position in the textile machinery and automotive supply businesses. A slight recovery on the markets was apparent for the first time in the second half of 2009, enabling Rieter to record increases of 30% in orders received and 17% in sales during this period compared with the first half of the year.
Orders received and Sales 2009
The Rieter Group was severely affected by the impact of the economic and financial crisis in the 2009 financial year. The unfavorable market conditions adversely influenced the trend of business at both divisions. The slump in demand that had already severely impacted 2008 continued until the spring of 2009; a slight recovery in the markets became apparent in the second half
of the year. Rieter believes that activity in both sectors in which the group operates bottomed out before mid-2009.
Orders received by the Rieter Group in the 2009 financial year declined by 24% (21% in local currencies) to 1935.1 million CHF. Order intake in the second half of 2009 was 9% higher than in the
same period of the previous year and 30% higher than in the first
half of 2009. This positive trend was attributable to a significant increase in orders received by both divisions. Over the year as a whole group sales declined more steeply than orders
received, to 1 956.3 million CHF, a reduction of 38% (35% in local currencies). In the second half of 2009 this figure was 21%
lower than in the same period of the previous year and 17% higher than in the first half of 2009.
Textile Systems: 69% increase in orders received in the second half of the year
The world market for textile machinery, which had already been weakening since the fourth quarter of 2007, suffered a massive slump as of March 2008, and this bottomed out in the first quarter of 2009. There were structural and cyclical reasons for this downturn. On the one hand it marked the end of an investment
boom to expand spinning capacity that had been fueled additionally in many markets by government stimulus programs. On the other hand the consequences of the economic and financial crisis had further reinforced the downswing.These resulted in a decline in textile consumption in the US and Europe and high yarn inventories in spinning mills worldwide. The rather better performance of the domestic markets in China and India was insufficient to offset this trend.
In 2009 as a whole, orders received by Rieter Textile Systems totaled 510.8 million CHF, equivalent to a decline of 5% (3% in local currencies) compared with the previous year (539.5 million CHF in 2008). The trend of business diverged in the two halves of
2009. While order intake in the first six months continued to decline compared with the same – already weak – period in the previous year, it was some 69% higher in the second half of 2009 than in the first half. Rieter already recorded a significant increase in demand for spare parts and components in the second quarter of 2009.