Reversal of 10-year downtrend in spare parts business
The financial results for the first half of 2014 (H1 2014) of Itema, the leading global provider of advanced weaving solutions, best-in-class weaving machines, spare parts and integrated services, exceeding expectations by registering a further growth to the already spectacular results of 2013. Despite the severe decline in global weaving machine demand, the company sold in the first six months of this year 12 per cent more weaving machines compared to the same period last year, increasing the group turnover by 10 per cent y-o-y.
“The first half of this year produced some rather positive and encouraging results,” announced Carlo Rogora, CEO of Itema. “Our progress continues on from the boost in 2013 (+50 per cent vs. 2012). This result is, for us, even more remarkable considering that the global weaving machine market declined significantly since Q4 2013, a fact also confirmed by statements from other industry players.”
The highest improvement in performance comes from the Indian sub-continent, in particular from Itema India, after the major turnaround steps taken in Q1 2014. Less satisfactory results so far come from China and from the airjet weaving machine sales, both due mainly to a significant slowdown in the Chinese weaving machine market.
In March, Itema renewed the existing company’s presence and investment in China with the grand opening of Itema China new premises in Shanghai. Furthermore, Itema launched two new avant-garde airjet models (the A9500p and the A9500e) and two new rapier weaving machine models (R880DT and R9000) at ITMA Asia 2014 in Shanghai, thus confirming itself as a leading market innovator. All new market launches were hailed by customers.
The rapier R9500 model continues earning well-deserved accolades worldwide. Launched less than two years ago, the weaving machine reaches a new pinnacle of success achieving 50 per cent of all Itema weaving machines sales, as compared to 30 per cent in 2013, and establishing itself as the all-time best-seller.
An impressive comeback this year is by the spare parts business. “We are particularly pleased by the turnaround performance of our spare parts business unit, set up only an year ago, which managed, for the first time in 10 years, to reverse the declining trend in original manufacturer spare parts market,” said Rogora.
The company is back on track with the implementation of “Lean Manufacturing” across its manufacturing and assembly lines, with a major focus on the main manufacturing site in Italy, driving up productivity by an additional +15 per cent with only limited additional resources and investments.
The other improvements across the board, ceteris paribus, once again exceeded expectations – cash flows of EUR 14 million, EBITDA up 20 per cent y-o-y, and operating profit (EBIT) up 27 per cent y-o-y.
“Our markets and the decision of weavers worldwide whether to invest in capital expenditures, including new weaving machines, are heavily influenced by the reigning political instability in some of the countries we operate and by the ongoing global economic crisis. The future, even in the short term, is difficult to predict. Thus, we maintain a cautious outlook for the second semester of this year. Anyhow, our encouraging results so far, in marked counter-trend with the global market, renew our strong will and determination to do even better going forward. We push ahead with our strategy to increase our flexibility to respond quickly to market changes and to pursue with ever greater determination the excellence and innovation of our products and the continuing satisfaction of our customers,” Rogora added.