In the second half of FY22, especially in the fourth quarter, the measures introduced to address material bottlenecks had a positive impact. Consequently, sales increased to CHF 890.3 million compared with the sales of CHF 620.6 million in the first six months of FY22, the company said in a press release.
Swiss firm Rieter, a leading supplier of systems for manufacturing yarn from staple fibres in spinning mills, has reported an increase of 56 per cent in sales to CHF 1,510.9 million (approximately $1,610.9 million) in FY22, compared with CHF 969.2 million in FY21. The company generated an EBIT margin of 2.1 per cent, compared to 4.9 per cent in FY21.
Rieter’s order intake was CHF 1,157.3 million in FY22 compared to CHF 2,225.7 million in FY21 and thus remained at a high level thanks to the company’s technological lead and broad international presence.
The company had an order backlog of around CHF 1,540 million at the end of FY22, which thus extends into FY23 and FY24.
The profit at the EBIT level in FY22 was CHF 32.2 million, compared to CHF 47.6 million in FY21. The result was strongly influenced by substantial cost increases.
Rieter closed FY22 with a positive result and achieved a net profit of CHF 12.1 million, equivalent to 0.8 per cent in relation to sales, following a net loss in the first half of FY22.
Free cash flow in FY22 was minus CHF 98.6 million, mainly a result of the build-up of inventories for deliveries in FY23. Accordingly, net debt was CHF 285.6 million, compared to CHF 161.9 million in FY21. As of December 31, 2022, Rieter had liquid funds of CHF 176.1 million, compared to CHF 249.4 million in FY21.
Rieter consolidated the acquired automatic winding machine business with effect from April 1, 2022. This acquisition completed Rieter’s system offering in the largest market segment of ring and compact spinning, thus significantly strengthening the company’s market position.
The company’s implementation of the action plan to increase profitability is ongoing. With regard to the margins for the order backlog, which remains high, the already implemented price increases in combination with a positive trend in costs, particularly in logistics, are having a favourable impact. In addition, progress was made in eliminating material bottlenecks and reducing expenses for the three acquired businesses.
In the context of India International Textile Machinery Exhibition (ITME) 2022 in Delhi (India), Rieter presented solutions for the economical production of yarns from recycled fibres, which met with great customer interest. As the technology leader, Rieter will present new, innovative products at ITMA 2023 in Milan (Italy).
For the coming months, Rieter expects below-average demand for new equipment at first, with a revival expected in the second half of 2023 after ITMA. The company also believes that demand for consumables, wear and tear, and spare parts will recover during 2023, the release added.
For FY23, due to the high order backlog, Rieter anticipates sales in the order of magnitude of the previous year. The realisation of sales from the order backlog continues to be associated with risks in connection with the ongoing geopolitical uncertainties, rising financing costs, continuing bottlenecks in the supply chains, and possible, currently unforeseeable consequences of the earthquake in Turkiye in February 2023.
Fibre2Fashion News Desk (DP)