The Rieter Group returned to profit at an operating level and achieved an operating result before interest and taxes of 14.6 million CHF in the first six months. Rieter will therefore reach the announced turnaround and expects to reaffirm the positive half-year operating result for the 2010 financial year as a whole.

Rieter’s markets improved significantly in the first half of 2010. As a leading supplier to the textile and automotive industries, Rieter exploited this recovery, which was especially strong in the textile machinery sector, to generate growth in all regions. The ongoing restructuring programs continued to be implemented in the first six months.

Rieter pressed on with important projects for the further expansion of capacity in Asia and the development of market-specific products manufactured locally. The sale of the nonwovens activities and the disposal of automotive design and engineering firm Idea Institute were completed.

Orders received at the Rieter Group rose by 92% to 1 615.3 million CHF (840.0 million CHF in 2009). This was mainly due to striking growth at Textile Systems, where orders increased four-fold. Adjusted for exchange rate fluctuations, the increase for the group amounted to 94%. Group sales rose by 34% to 1 201.3 million CHF (899.8 million CHF in 2009).

The operating result before interest and taxes (EBIT) amounted to 14.6 million CHF, an increase of 151.1 million CHF compared with the same period of the previous year. This striking improvement in the operating result is attributable to improved capacity utilization and a 301.5 million CHF increase in sales. This resulted in a consolidated pre-tax result of – 2.7 million CHF (– 149.8 million CHF in 2009) and a net result of – 15.3 million CHF (– 145.5 million CHF in 2009).

Even after two extremely difficult years in 2008 and 2009, Rieter still has a sound balance sheet. The equity ratio on June 30 was 33% and net liquidity amounted to – 18.0 million CHF (10.4 million CHF on December 31, 2009). Net cash from operating activities was 0.2 million CHF (– 13.5 million CHF in 2009), despite the volume-related increase in net working capital and restructuring expenditures. Capital expenditure in the first six months increased to 26.7 million CHF (22.8 million CHF in 2009). However, Rieter is planning to double capital expenditure in the second half of 2010 compared with the same period of 2009.

Rieter’s workforce is 12,490, with fewer employed in high-cost countries (62% to 60%) and more working in low-cost countries due to expansion in Asia.

Textile Systems: operating results creep up due to four-fold leap in orders
The investment climate in the textile industry improved significantly in the first half of 2010. The main reason is the favorable margin situation for spinning mills, as demand for yarn has grown and yarn prices have risen. At the same time raw material prices – especially for cotton – have not increased to the same extent. Added to this is a backlog of demand for investment in plant replacements and updates.

Orders received by Rieter Textile Systems in the first six months of 2010 increased by 290% to 738.6 million CHF (189.6 million CHF in 2009). The upswing was most pronounced for staple fiber machinery, but demand for technology components was also strong. The largest volume of orders came from Turkey, India and China. Other Asian markets such as Indonesia, South Korea, Bangladesh and Pakistan also recorded very strong growth.

The good order situation resulted in better capacity utilization in the first half of 2010, and delivery lead times lengthened. Short-time working was discontinued as of the end of June in all departments and at all sites of Textile Systems. Sales in the first six months did not yet rise as steeply as order intake; they increased by 30% to 324.6 million CHF (249.5 million CHF in 2009). The fastest growth was recorded in Asia, where sales increased by 65% compared with the same period in the previous year. Textile Systems posted a marginally positive operating result (EBIT) of 2.0 million CHF. Rieter Textile Systems continued the systematic implementation of restructuring and cost-cutting programs in the first six months of the year, which made a significant contribution.

Rieter also signed a contract with international technology group Andritz for the sale of Rieter’s nonwovens activities in France. Rieter Textile Systems, the leading systems supplier in the field of spinning machinery and installations for short staple fibers, continued to expand in India.