During the ‘investors’ day’ at ITMA in Milan, Rieter described the progress made in focusing on its strategic priorities. These are concerned with the enhancement of innovativeness, expansion of services and increase in the profitability of the group. For the purpose of achieving its mid-term targets, the STEP UP improvement program announced in October last year is being implemented.
Innovations
The Machines & Systems business group displayed the new E 36 / E 86 combing set, which offers a significant increase in productivity. The enlarged R 66 rotor spinning machine with improved S 66 spin box and the optimized air-jet spinning machine with the Polyester option P 26 was also presented. The extended SPIDERweb Mill Control System is another highlight. It represents the first step towards using the “Internet of Things” for optimizing the spinning mill. The business group Components presented components such as the EliteAdvanced compacting system, the new X-Comb and the LENA high speed spindle, which allows spinning mills to gain a technological advantage and as a result achieve higher profitability.
Services
For the first time the business group After Sales presented its own service and product range. The goal is to enable Rieter customers to make optimal use of the spinning mill over the entire lifecycle. The business development dynamics indicate market acceptance of this range. Consequently the business group is aiming to grow by more than 30% overall in the next three years, based on sales amounting to 127.5 million CHF in 2014.
Profitability
Rieter has been consistently implementing the STEP UP program (drawn up in October 2014) for the purpose of achieving its mid-term targets, i.e. an operative profitability (EBIT margin) of 10% in conjunction with a return on net assets (RONA) of 14%.
Details on outlook
While the order intake trend for both business groups Components and After Sales is pleasing, the market for new machinery at the business group Machines & Systems is at a low level. This trend is due to spinning mills’ low margins as well as uncertainty in the individual sales markets.
Owing to the positive dynamics in the business groups Components and After Sales and a scheduled order book delivery in the business group Machines & Systems, Rieter is expecting for the whole of 2015 sales of around 1 billion CHF, operative profitability (EBIT) around seven percent and a net profit of between four and five percent of sales.
