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Rieter Textile Systems posts positive operating result

22 Mar '11

5 min read

Coping with the steep increase in order volumes in the 2010 financial year was a particular challenge for Rieter's personnel, managers and suppliers. Action taken in the personnel sector was a decisive factor in mastering the prolonged demand crisis and also the subsequent upswing. In 2008 and 2009 Rieter had utilized flexible working-time models, introduced short-time working at numerous locations in Europe and reduced the number of permanent employees. In the year under review Rieter initially coped with higher volumes by discontinuing short-time working and later by engaging temporary personnel.

At the end of 2010 the Rieter Group employed a workforce of 12 804. In the year under review the ongoing headcount reductions in certain countries were partially offset by the establishment of facilities in new markets and increases in capacity at Automotive Systems in North America.

In Europe the increase in capacity was achieved primarily by employing temporary personnel. In China and India new plants started production.

Rieter continued to invest in innovation and access to new markets in the crisis years in order to be prepared for the upswing with attractive products and an enhanced presence in growth regions. The good trend of business in the year under review confirms that the right investment decisions had been taken.

Rieter Textile Systems:
almost three-fold increase in orders received, clearly positive operating result Two years of conspicuously weak demand on the world market for spinning machinery were followed by a strong recovery with a broad regional base in the year under review. The upswing was driven by investment demand for replacements and expansion as well as strong growth in textile consumption in the major Asian markets in addition to improved sentiment in the European and US textile markets. Rieter Textile Systems successfully exploited the positive trend due to its strong market position and with machinery and technology components which are also adapted to local needs in emerging markets.

Orders received by Rieter Textile Systems rose from 510.8 million CHF in the previous year to 1 454.6 million CHF, corresponding to an almost three-fold increase. The trend in order intake was uniformly positive throughout the financial year. Sales growth was especially strong in the second half, and in the year as a whole revenue rose by 64% to 870.4 million CHF (532.0 million CHF in 2009).

In local currency terms, orders received and sales increased by 188% and 67%, respectively. Rieter Textile Systems posted a positive operating result due to high capacity utilization, especially in the second half of the year, and attractive products yielding good margins, as well as through a lean organization, low fixed costs and a lowering of the breakeven point.

The operating result amounted to 77.9 million CHF or 9.2% of corporate output. In the previous year the divisionhad posted an operating loss due to a massive drop in volumes.

In the course of focusing on its core business, in 2009 Rieter agreed to sell its nonwovens activities to the Andritz Group, which operates internationally. This transaction was completed on March 9, 2010.

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