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Report | September 2015

Rieter posts impressive 1st half results

Net profit of Rieter rose to 29.1 million CHF or 5.3% of sales as compared to 14.3 million CHF or 2.7% of sales in the first half of 2014.

Rieter achieved a significant increase in sales and profitability in the first half of 2015. Sales rose by 6 per cent to 553.9 million CHF. As a result, the EBITDA margin amounted to 11.9 per cent and the EBIT margin to 8.3 per cent of sales (compared to 9.3 per cent and 5.5 per cent, respectively, in the first half of 2014). Net profit rose to 29.1 million CHF or 5.3 per cent of sales (compared to 14.3 million CHF or 2.7 per cent of sales in the first half of 2014). Since January 1, 2015, Rieter has been conducting its operations in three business groups: Machines & Systems (machinery business), After Sales (spare parts and services) and Components (technology components). The company is thus also taking account in particular of the strategic importance of the after-sales business and improving transparency. With the figures for the first half of 2015, Rieter is reporting results on the basis of this new structure for the first time.

Rieter posted pleasing growth in sales on the back of its large order backlog at the start of the year. Compared to the same period of the previous year, sales rose by 6 per cent to 553.9 million CHF (522.1 million CHF in the first half of 2014).

The disproportionately high increase in profitability is especially pleasing: EBITDA rose by 36 per cent to 66.0 million CHF, corresponding to 11.9 per cent of sales (compared to 9.3 per cent in the first half of 2014). EBIT rose by 60 per cent to 46.1 million CHF; the EBIT margin increased from 5.5 per cent to 8.3 per cent of sales. This reflects the positive development in the three business groups and the effects of the cost reduction measures which Rieter laid down and implemented as a response to the scrapping of the minimum exchange rate of the euro in January 2015. The gain on the sale of a property amounting to 5.0 million CHF also contributed to the satisfying result.

There was an improvement in Rieter´s financial result (-4.7 million CHF compared to -7.3 million CHF in the first half of 2014); the tax ratio was 29.7 per cent (compared to 33.5 per cent in the first half of 2014). On account of the favorable trend of these two parameters along with the improvement in EBIT, the group´s net result rose significantly to 29.1 million CHF or 5.3 per cent of sales (compared to 14.3 million CHF or 2.7 per cent of sales in the first half of 2014). Rieter´s capital expenditure in the period under review totaled 7.3 million CHF, a good 40 per cent less than the corresponding figure in the first half of 2014. R&D spending increased slightly to 22.9 million CHF (compared to 21.5 million CHF in the first half of 2014).

Net working capital increased by 37.5 million CHF in the first half year of 2015, although inventories were reduced. This development is due to an increase in trade receivables and a reduction in trade payables as well as advance payments from customers. Free cash flow amounted to -5.1 million CHF (compared to -2.9 million CHF in the first half of 2014).

After payment of a dividend of 20.6 million CHF (4.50 CHF per share) out of the reserve from capital contributions and the repayment of a bond issue totaling 151.9 million CHF in April 2015, cash and cash equivalents at Rieter amounted to 257.6 million CHF and net liquidity to 139.0 million CHF as of June 30, 2015. Rieter is soundly financed and has an equity ratio of 42.7 per cent. The market situation forecast by Rieter at the results press conference held in March proved to be true for the first half of 2015. Spinning mills performed at a healthy level in many key markets and this had a positive effect on order intake and sales for the After Sales and Components business groups. For the Machines & Systems Business Group, subdued investment demand from customers was clearly apparent. This trend

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