Rieter has reported significant growth in order intake for the first half of 2024, signaling positive momentum amid challenging market conditions. With notable improvements in key markets like China and India, Rieter is optimistic about continued demand growth throughout the year. The company has also outlined its financial expectations for the full year 2024, projecting sales between CHF 900 million and CHF 1 billion and a positive EBIT margin of 2% to 4%.
Market Conditions and Future Outlook
Despite ongoing economic challenges, including high inflation rates and dampened consumer sentiment, Rieter is beginning to see signs of recovery in its key markets. The first half of 2024 showed a promising increase in order intake, particularly from China, India, and Türkiye. Rieter expects this upward trend to continue, anticipating increased demand in the coming months.
Cost Reduction and Performance Improvement
Rieter has been diligently implementing the measures outlined in its “Next Level” performance program, focusing on optimizing overhead structures and adjusting production capacities. This strict cost management has resulted in a positive EBIT margin of 2.1%, despite lower-than-forecast sales. The program’s success is reflected in a strengthened profitability, with an EBIT profit of CHF 8.9 million in the first half of 2024.
Operational Highlights
Order Intake: Rieter reported an order intake of CHF 403.4 million, a 24% increase compared to the first half of 2023. This growth was driven primarily by new machine demand in the Business Group Machines & Systems.
Sales Performance: Total sales for the first half of 2024 were CHF 421.0 million, down from CHF 758.2 million in the first half of 2023. Sales in the Business Group Machines & Systems and the Business Group Components decreased by 62% and 12% respectively, due to low order intake in 2023. Conversely, the Business Group After Sales saw a 4% increase in sales, driven by higher installation services and engineered solutions.
Order Backlog: As of June 30, 2024, Rieter had an order backlog of around CHF 640 million, comparable to the level at the end of 2023.
Strategic Focus
Rieter remains committed to pursuing growth in its after-sales and components business to achieve a more balanced mix among its business groups. The company is on track with its resource and responsibility transfer to India and China, aiming to respond more effectively to customer needs and market cycles.
Rieter’s performance in the first half of 2024 reflects its ability to navigate challenging market conditions while implementing strategic cost management and operational improvements. With a solid order intake and a clear focus on growth and efficiency, Rieter is well-positioned for continued success in the second half of the year. The company remains optimistic about the future, anticipating a positive impact from the global increase in spinning mill capacity and continued recovery in its key markets.
