Big spurt both in order intake and sales
Rieter recorded a pleasing trend in business in 2013. The improvement in its market position enabled the company to post significant
growth in both order intake and sales. Order intake of 1,259.4 million CHF was 50 per cent higher. Sales totalled 1,035.3 million CHF, representing an increase of 17 per cent.
Rieter had a backlog of orders in hand of some 765 million CHF at the end of 2013. This will ensure a high capacity utilization until well into 2014.
After a subdued start to the year, the market for short-staple fiber machinery and components gained momentum in the course of 2013. Spinning mills’ margins continued to develop favorably, and this stimulated customers’ willingness to invest. This positive trend was broad-based in regional terms and apparent in a large number of national markets. Following a strong initial six months, demand stabilized in the second half of the year, but remained at a pleasingly high level.
The positive trend in order intake and sales in 2013 underlines that Rieter is on the right track with the innovation and expansion strategy it has been implementing since 2012.
Demand for Rieter’s offering, expanded by major product launches, has been very good in both the traditional and new markets. Rieter has further developed its already strong market position with the implementation of the large-scale investment program in 2012-2013 aimed at further growth and focusing on expansion in Asia, innovation and process improvements. With its product range centering on specific markets and its new plants, the company is ideally positioned with a worldwide operating network.
Spinning mills in all major markets are increasingly placing their confidence in machinery and components which enable a high degree of automation to be achieved in conjunction with higher productivity and yarn quality with lower energy consumption. As the sole global supplier of integrated systems for all four spinning processes, Rieter can optimize the entire spinning operation in line with customers’ specific needs. This is a crucial and lasting competitive advantage.
In the year under review, new orders received by Rieter increased by 50 per cent to 1,259.4 million CHF. After developing especially 
vigorously in the first half of 2013, order intake slowed slightly in the second six months, but still remained above the long-term average.
This trend was especially true in Turkey where demand had been particularly strong with the support of Government development schemes. Rieter booked new big orders in China, especially in the first six months, thanks to the further expansion of its local presence. However, investments by Chinese spinning mills waned towards the year-end due to large raw material inventories and growing difficulties with financing investment projects.
Healthy demand for Rieter products nevertheless continued throughout the year in a number of Asian countries, such as Pakistan, Uzbekistan, South Korea, Bangladesh, Indonesia and Vietnam. Spinning mills in the US are renewing capacity as the industry benefits from a competitive cost structure. Business here developed briskly in the second half in particular, and Rieter secured substantial orders for rotor spinning machines.
Orders received in India rose in the second half, albeit still at a modest level. Rieter posted an increase in order intake at both Business Groups, with the striking momentum in the first six months being attributable especially to orders for complete installations from Spun Yarn Systems. Compared to 2012, Spun Yarn Systems (the machinery business) posted a 56 per cent increase in new orders to 1,084.3 million CHF. At Premium Textile Components (the components business), order intake increased by 21 per cent in 2013 to 175.1 million CHF.
Rieter had a backlog of orders in hand of some 765 million CHF at the end of 2013, which will ensure high utilization until well into 2014 compared to some 550 million CHF on December 31, 2012.
Encouraging sales trend
The sales trend at Rieter in 2013 was also very good. The figure of 1,035.3 million CHF was 17 per cent higher than a year earlier. All regions recorded increases, with only Europe posting slightly lower sales. Expanded and modernized manufacturing capacity enabled Rieter to process orders promptly and post a 17 per cent increase in sales in the second half of the year compared with the first six months.
Spun Yarn Systems reported sales of 857.8 million CHF in 2013, equivalent to an increase of 18 per cent compared with the previous year. Premium Textile Components posted a 10 per cent increase in sales to third parties to a figure of 177.5 million CHF.
The margins earned in the machinery business in the second half of the year were better than expected and above the average of the existing orders in hand. With this improvement in operating profitability and volume growth, Rieter foresees net profit of around 3.5 per cent of sales for the 2013 financial year.